Thursday, September 23, 2010

China Blocking Exports as a weapon

For years I have told anyone who will listen that sending all the jobs, technology, and know how to China is a really bad idea. But nobody listened (or cared) and here we are. Totally dependent on China who on a whim can decide to muck things up. Which they are now currently doing.

http://www.nytimes.com/2010/09/24/business/global/24rare.html?pagewanted=2&_r=1&partner=rss&emc=rss&adxnnlx=1285246802-UMAVhLifMlYLOcFkzY4P7w

"Chinese government has blocked exports to Japan of a crucial category of minerals used in products like hybrid cars, wind turbines and guided missiles."

"China mines 93 percent of the world’s rare earth minerals, and more than 99 percent of the world’s supply of some of the most prized rare earths, which sell for several hundred dollars a pound."

"Japan has been the main buyer of Chinese rare earths for many years, using them for a wide range of industrial purposes, like making glass for solar panels. They are also used in small steering control motors in conventional gasoline-powered cars as well as in motors that help propel hybrid cars like the Toyota Prius."

"The Chinese halt to exports is likely to have immediate repercussions in Washington."

"The main American rare earth mine, in Mountain Pass, Calif., closed in 2002"

"The Defense Department has a separate review under way on whether the United States should develop its own sources of supply for rare earths, (you think?) which are used in equipment including range finders on the army’s tanks, sonar systems aboard navy vessels and the control vanes on the air force’s smart bombs."

“We are going to be 100 percent reliant on the Chinese to make the components for the defense supply chain,” Mr. Green said.

Rare earth elements are already in short supply, and prices are soaring, after the Chinese government announced in July that it was cutting export quotas by 72 percent.

"China has refrained until now from using its near monopoly on rare earth elements as a form of leverage on other governments."

And it is just the beginning.

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