BEIJING – China's biggest producer of rare earths is suspending production for one month in hopes of boosting slumping prices of the exotic minerals used in mobile phones and other high-tech products.
This week's move by Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech might fuel tensions with the United States and Europe. They have questioned Beijing's decision announced earlier to limit exports while it tries to develop its own manufacturers of magnets and other products made of rare earths.
In a statement through the Shanghai Stock Exchange, Baotou Steel said it wants to "balance supply and demand" after prices for rare earths fell amid uncertainty about the U.S. and European economic outlooks.
Rare earths are a group of 17 minerals used in manufacturing flat-screen TVs, mobile phones, batteries for electric cars, wind turbines and weaponry.
It's also good to know that "China has about 30 percent of global rare earth deposits but accounts for 97 percent of production." Why did other countries, having about 70 percent of global rare earths deposits, stopped mining them? The short answer to this is that "there's no such thing as pollution in China" (a non-physics statement, to be more precise). The long answer is that China lowered production costs, hence market prices, to such a level that it was more profitable to import rare earths from there than to mine for them at home. But things, it seems, start to gradually change.
Companies are restarting production in Canada, California, Russia and elsewhere but it will be some time until those supplies make it to market.
New rare earths deposits are discovered, for instance in Queensland, Australia, and added to the "some 70 percent" of global resources ( http://crude-oil-prices.net/oil/oil-and-energy-policies-facts-and-lies/139-scandium-deposits-in-the-company-of-thorium ).
Let's have a look at the crude oil global deposits and markets. Unlike in the political lies, Arabian deserts are not richer than Dakota, Alaska, Texas or South Russian oil fields. There's crude to be drilled in the South Cina Sea, in the sands of Canada and even Estonia, in the North Sea, the Baltic (yes, Germany), South America and Siberia, at the North Pole, maybe the the South Pole as well. For goodness sake, oil is about everywhere in the crust of this planet.
Oil production is largely determined by the amount of regulation imposed by different governments, or inter government cartels such as OPEC. New drilling technologies, such as horizontal drilling, already allow Northern nations, including the USA, to produce the crude at more competitive prices. The free market, when and if it will be indeed free, or at least freer than today, will project a less tensioned energy future. Abundant domestic oil supplies will drive the markets towards lower oil prices. Fuel independent economies will get stronger thus pushing unemployment rates to the basement. Overall, the living standard will rise again in the West and people won't bother pay more for electronics (remember the rare earths and the China price play?) as far as abnormal gas prices at the pump, and energy costs entirely, will return to lower acceptable levels.
It makes sense. Only if you're not a politician with an agenda of seeding rage and reaping storms. The wind of change, will it rewind next year with a frigid spell?
Read this commented article by Thomas Sowell to find out more:
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