Rare-earth minerals are a particular
type of commodity that, because of their atomic number (their place in the
Periodic Table of the Elements) have characteristics that make them the
essential ingredients for the production of such things as lightweight, very
long life batteries, lightweight magnets, catalytic converters, flat screen
TVs, lightweight but strong metal components, mobile phones and a host of other
devices and materials that are needed for modern living.
Because they are not as concentrated
in ore deposits as are the more traditional hard commodities, such as copper
and iron, they are difficult and expensive to mine.
As can be seen from the chart above,
in 2011 traders in rare-earth minerals, mainly on the futures markets, got
quite excited about the perceived potential of such desirable commodities.
Since then the price has come back to more realistic levels. The general
collapse of commodity prices in recent times has helped this tendency.
Rare-earths
and China
Up to recently, China exported
over 90% of the world’s requirements of rare-earth minerals. This has dropped
since a dispute with the World Trade Organisation (WTO) over pricing, and the
finding by buyers of alternative sources of supply. Chinese exports are now
around 86% of global requirements, which is still high.
The Chinese idea was to move its
utilisation of rare-earths further up the supply chain. Instead of exporting
the raw commodities, it sought to incorporate them in their own hi-tech
manufacture and export the value-added finished products instead. It is hard to
blame them for that.
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