China Restricts Export of Rare Earth Minerals. Companies Figure Out Other Places to Get Them. Surprise!
Remember a couple of years ago when China started restricting exports of rare earth minerals?
Small amounts of minerals like Europium are vitally important to making gadgets like night vision goggles, smartphones, and the batteries in hybrid cars. It's hard to find big, mineable deposits of some of the substances, so when China ramped up extraction dramatically over the last few years prices fell. Some companies moved their factories to be closer to the source of these important minerals and competing operations elsewhere closed up shop.
Then China clamped down and EVERYBODY PANICKED!
Governments whined to the World Trade Organization:
The United States, the European Union and Japan filed a World Trade Organization complaint alleging that China was using its monopoly over the minerals as a political and economic weapon—for instance, to punish Japan over its claims to contested islands in the South China Sea and to entice companies to relocate factories inside China by offering a cheaper supply of rare earth materials.
But meanwhile:
Colorado-based Molycorp…reopened a rare earth mine in Mountain Pass, Calif., that had been shuttered a decade ago because the supply of the minerals coming from China was so cheap….
[Plus,] the company recently acquired China-based Neo Materials and with it the technology needed to provide the more purely refined rare earth oxides used in computer, defense and telecommunications equipment.
Similar developments have occurred in North Carolina and elsewhere. Turns out that when the price of something goes up or access to it becomes uncertain (or both) people figure out other ways to get that thing, and more people try to figure out way to supply that thing. Neat!
Koshi Okamoto, executive director of New York-based Hitachi Metals America, explained what happened in a very no-nonsense way: "Reliable sources of supply are clearly one of the top priorities."
