Impact: Rare metals

There seems to be a new entry in the catalogue of war for resources. After oil, gold, uranium and water, the latest additions are the Rare Earth Elements (REEs). REEs are a collection of seventeen chemical elements like scandium, yttrium and the fifteen lanthanides. Interestingly, the nations involved in exploration and hunting of these elements are the traditional adversaries: Oriental China and the US-led West!

China has, over time, gained monopoly as mines of REEs across the world were closed down and low cost exports of the same made by China. China today controls 36 million tons of the world's 88 million ton rare earth element deposits, more than the combined deposits of the US and Russia. It also supplies over 90 per cent of REEs to the world. For the uninitiated, the global trade in rare earths is estimated to reach about $ 3 billion by 2014.

Since rare-earth mining produces radioactive waste and discharge of such waste calls for strict guidelines in developed countries, China seems to be the best option. The country has allotted billions into basic and applied research on rare earth elements. China also has two state laboratories exclusively for Research and Development on rare-earth elements and own two journals dedicated to extensively publicise rare earth metals.

What is worse is that mines across the world would take a minimum of 10 to 15 years before they become operational. But then, the next door neighbour North Korea, is gradually emerging as a strong contender. Both China and North Korea are trying to make their presence strong in the REE market as these so-called ‘vitamins of high-tech industries’ are imperative for any electronic manufacturing. Koreans, unlike the Chinese, are exploiting their REE reserves to facilitate their power ambitions. Extensive usage of these elements (they can be used from producing smart phones to missiles) are encouraging more and more nations to experiment and use the elements. Not only are they quite keen on using it to develop electronic products (consumer durables) like LCD and phones but are also finding ways of using the same for their nuclear and defence programs.

With China putting a cap on REE mining and export, the international marketing price of the same is soaring at rocket-speed. However, in this race of resources, Korea is still way behind China with just 20 million REE deposits compared to China’s 60 million REE deposits. Korea also still lacks technology and scientific know-how for economically exploring the deposits while China has dedicated institutes that study various elements and possibilities of their usage.

The world is not blind to the Chinese monopoly and export caps, which resulted in a number complaints filed with the World Trade Organisations against them as it is impacting the global price and production of consumer electronics. Recent scientific findings have revealed many more interesting usages of these elements. REEs can be critical components in defence businesses too. The major defence companies of developed countries are crossing swords with China in this hugely profitable business. Now since the defence trade is very sensitive in nature, the defence production (especially precision weapons) are under threat of nose-diving because of a dearth of REEs and overwhelming Chinese control over it. This is becoming a reason for developed nations to discover new sources of REE production in any part of the world not only to secure its defence industry but also to stop China from controlling such an emerging and crucial industry.