Geoffrey Lean
The Daily Telegraph
Few people have heard of “rare earths,” says Geoffrey Lean, yet modern life would be impossible without this obscure group of metals, including neodymium and dysprosium. Mobile phones, computers, fiber optics, solar panels—rare earths are a vital component in them all. That’s great news for China, which processes 97 percent of the world’s supply.
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China’s bounty isn’t due to any natural monopoly—it has only a third of world reserves—but to the fact that it underpriced the competition to gain control of the market. The U.S. has the second-largest volume of known rare-earth deposits, but it abandoned its own industry because it’s cheaper to import from China. The Indiana factory that once produced rare-earth magnets for U.S. smart bombs “now houses Coco’s Canine Cabana, a day-care center for dogs.”
The danger of relying on China is all too evident: China will soon need its entire supply of rare earths to satisfy domestic demand, and it won’t shrink from using its “near monopoly” to advance its agenda. Last week Beijing briefly suspended rare-earth exports to Japan during a diplomatic row. That should serve as a wake-up call to the rest of the world.