China's control of rare metals threatens jobs, tech
One metal, neodymium, critical to disk drives, only available in China
Computerworld - WASHINGTON -- China is facing increasing criticism for holding down the value of its currency to gain export advantage, and for its cyber-attacks against Google. But another growing concern is its control of rare earth metals critical to high-tech manufacturing.
China's pricing of these metals is so low that it has become unprofitable for mining companies in U.S. and other Western countries to mine and process them.
The U.S. is almost completely dependent on China for these metals. One metal, neodymium, is used in hard-disk drive magnets, and nearly 100% of its production today is in China.
"China appears to view rare earths as one of the incentives they can offer a technology firm scouting for a new plant location," said U.S. Rep. Brad Miller (D-N.C.) of the U.S. House Committee on Science and Technology, in a statement on Tuesday.
"How do we compete in attracting and retaining manufacturing firms that need access to rare earth elements in light of China's current near monopoly, and their willingness to use their monopoly power to our disadvantage?"
Jack Lifton, a Detroit-based independent consultant on rare earth metals, said that the Chinese have managed to keep the price of neodymium very low. "It's not about making a profit," he said, in an interview.
The U.S. has sufficient natural supply of rare earth elements but the cost of mining them is too great because of the price set by China have given it, in effect, a monopoly. "They have priced the stuff so low that they have made it impossible to mine it here," Lifton said.
If the price of rare earth metals was competitive, Lifton said he believes the U.S. could revive some manufacturing industries.
The major source of rare earth deposits in the U.S. was at Mountain Pass, Calif., but mining operations ceased 2002. The new mine owner, Molycorp Minerals LLC, sells existing deposits, but it is working on a plan to resume mining.
But mining is only part of the process. The U.S. has lost its capacity to manufacture rare earth metals, and those capabilities will have to be reintroduced into the U.S.
One of the last U.S. companies manufacturing rare earth magnets was Valparaiso Ind.-based Magnequench Inc., which was acquired by a Chinese company and eventually moved to China about five years ago.
"This deal and subsequent deals around the globe have allowed China to come closer to cornering the market in rare earth minerals," wrote the U.S. China Economic and Security Review Commission in a 2005 report.
"Of equal concern is the transfer of technology, including patents, allowing China to control development of next-generation products using rare earth minerals," the report said.
Mark Smith, CEO of Molycorp Minerals, told the congressional committee this week that "while the U.S. still possesses the technical expertise, we have lost the necessary infrastructure to manufacture the rare earth metals and magnets that fuel next generation technologies."
Along with high-tech uses, rare metals are heavily used by defense and, increasingly, for clean energy.
China has acquired 100% of the associated rare earth metal production. This is causing much concern because, Smith said, "China's national consumption of rare earth resources is growing at an intense pace, consistent with their meteoric GDP growth, and it is leaving the rest of the world with less of these critical materials just as the clean energy economy is beginning to gain momentum."
Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed . His e-mail address is email@example.com.
Read more about Hardware in Computerworld's Hardware Topic Center.
- 15 Non-Certified IT Skills Growing in Demand
- How 19 Tech Titans Target Healthcare
- Twitter Suffering From Growing Pains (and Facebook Comparisons)
- Agile Comes to Data Integration
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- 4 Customers who never have to refresh their PCs again This paper illustrates a common theme: the combination of desktop virtualization and thin client computing helps organizations deliver an up-to-date user experience more...
- Mobile Devices: The New Thin Clients Get essential guidance for understanding the role thin clients plus virtual desktops play in the enterprise today.
- Taking Windows Mobile on Any Device Taking Windows applications mobile has many advantages, but the process of identifying a solution is complex. Learn how to solve this complex problem...
- PaaS - Powering a New Era of Business IT Why PaaS has suddenly become relevant and irresistible to many organizations. Dive into the opportunities and considerations associated with using PaaS from an...
- Redefine Your IT Operations: Remote Office IT Has Never Been Simpler Join us to see why PC Pro named Dell PowerEdge VRTX the "2013 Server of the Year." PowerEdge VRTX may be just what...
- The New Way to Work Knowledge Vault This Knowledge Vault focuses on how, in today's increasingly virtual world, it's more important than ever to engage deeply with employees, suppliers, partners,... All Hardware White Papers | Webcasts