Why China Will Rule the Electronics World
With China providing over 95% of the earth’s supply of “rare earth” minerals to the rest of the world, they’re in a very good supply-control position. They effectively control the flow of resources needed to create conductors, magnets, capacitors, and other crucial electronics components.
Most kinds of rare earth materials are—despite the name—not very rare. China however can mine them relatively freely, with environmental regulations making the process very expensive for other industrial bases in the US and Europe. Right now the Chinese are happy to maximize this advantage, effectively selling rare earth for use by other countries and foreign-based companies at a profit.
Unfortunately, as the Chinese economy grows and local demand for electronics grows, you can bet China will start using more of its rare earth supply for local development, and divert less for export.
As recently as 2004, China used less than half of the rare earth metals it produced. But according to an estimate by the Industrial Minerals Co. of Australia, in Mount Claremont, China’s domestic demand will overtake its production in less than 10 years. Now Beijing is considering banning exports of some rare earth elements and limiting shipments of others to 35 000 metric tons a year, which would immediately threaten not just electronics manufacturing across the globe but also hybrid vehicles. A Toyota Prius, for example, requires about a kilogram of neodymium for its electric motor and as much as 15 kg of lanthanum for its battery pack.
The country will definitely increase production to keep up with demand, but it’s also reasonable to assume that they will realize their key position in the global supply market. How will this affect manufacturing and electronics industries around the world? While only time will tell, other countries—especially those where electronics are high in demand—should definitely try looking for other sources.
Post from: The Gadget Blog
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