China Tightens Grip on Rare Minerals

While one might not have heard of dysprosium and terbium – these elements are rare – they are critical ingredients in green technology and military hardware, and China, the country with some of the largest deposits, wants to limit their export. Though not as precious as gold or platinum, rare earth elements can fetch hefty prices. Some of their primary uses include components for the electric motor that powers Toyota’s hybrid car the Prius and magnets used in wind turbines and unspecified “military applications.” As one of the few resources in which it enjoys a relative advantage and given its commitment to green technology, it is no wonder, then, that China is lowering export quotas on rare earth elements. The country is also restricting environmentally damaging mining of such elements – there are many unlicensed mines in southern China. However, it may be too soon to claim that China has cornered the market given recent discoveries in Australia. But there are more twists. Some Chinese companies have already made a bid to buy large stakes in the cash-strapped Australian companies. And though final approvals are still forthcoming, if the dramatics surrounding Chinalco’s bid for Rio Tinto are any guide, there are sure to be 11th hour surprises in these proposed purchases as well. What this story highlights is that renewable energy may not be the simple alternative many suppose. Indeed, promoting green technology could exchange the depletion of one scarce resource for another, with the attendant political chess games thrown in to control or gain access to such supply. – YaleGlobal