Friday, September 4, 2009

Strategic minerals

The Archdruid has just put up a post entitled "The Dawn of Scarcity Industrialism" about the Chinese government's moves to stop exports of certain rare earth minerals. A quote…
Those of my readers who don’t track the latest fads in technology may not know that these have become crucial to many cutting edge technologies. Lanthanum, for example, is used in high-tech batteries, and neodymium goes into the permanent magnets used in electric motors and wind turbines. The innards of the Prius and other hybrids, to say nothing of the as-yet-imaginary electric cars being hyped by what’s left of the American auto industry, depend on rare earth elements, and China currently produces well over 90% of the world’s supply of most of them. The report thus sparked claims of an imminent shortage in these minerals and, predictably, a flurry of speculative interest in (and hype-ridden articles about) mines outside of China that can produce the same minerals.
An article from the Sydney Morning Herald (via Gippsland friends of Future Generations) gives more background on Australia's situation in regard to the production of rare earth minerals. Another quote…
A decision is looming in Canberra that could block plans by China to tighten its grip on the market for some of the world's most obscure but valuable minerals. China accounts for 93% of the production of so-called "rare earth" elements - and more than 99% of the output for two of them that are vital for a wide range of green energy technologies and military applications like missiles.
Over the next decade or so we will almost certainly see a rush to secure what are seen as vital raw materials by the dominant powers in the world. How this will play out for Australia is uncertain. While we are the source of many important supplies our capacity to control or defend that capability will be a major political test. The Sydney Morning Herald article refers to moves by Chinese miners to buy up rare earth miners in Australia. If China corners the market in these materials world-wide and then plays big power politics with them, we will find ourselves in a situation not unlike that leading up to World War 2, where the economic autarky of the 1930's, brought on by the Great Depression, saw the Axis power attempt to seize by force the economic resources they could not obtain by trade.

Will China attempt to make Australia into a vassal state? How will the USA react to all this? We live in interesting times.

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