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Anorak | The Great Chinese Rare Earths Panic Is Over

The Great Chinese Rare Earths Panic Is Over

by | 18th, December 2013

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YOU might recall back a couple of years there was a great panic as China decided to limit the export of the rare earths. These are the weird metals that are essential to much of modern technology, making the magnets for hard drives, earphones and windmills, batteries for electric cars and those new fangled light bulbs that flicker in the dark.

The situation was that China produced 95% of all the world’s production of these metals. Not for any particular reason other than that they were willing to make them cheap and put up with the pollution from doing so. Then they decided, well, we’ve got a bit of a monopoly going here lads. Let’s raise the prices and make huge profits! Hurrah!

What happened next was always obviously going to happen but when you’ve been raised in a communist economy you might not have been able to see it :

A jump in prices for rare earth elements in 2011, 95pc of which came from China, led to Pentagon concerns that the supply of rare earths for defense manufacturing might dry up.

But an annual report sent to Congress stated: “Global market forces are leading to positive change in rare earth supply chains, and a sufficient supply of most of these materials likely will be available to the defense industrial base.”

The report, dated October 2013 but not yet released publicly, said there was a “significant reversal” in the situation with rare earth elements between 2011 and 2012, with one expert projecting a 20pc drop in global demand.

The decline in demand, in part due

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Posted: 18th, December 2013 | In: Money Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink

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