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Rare earth shortage poses strategic threat to UK IT

By Stewart Mitchell

Posted on 19 Jan 2011 at 11:58

The UK Government has warned that a global shortage of rare earth materials could hit the UK's tech business.

Rare earth materials feature widely in technology – particularly storage components - and such a shortage is likely to drive up prices.

According to a report by the Parliamentary Office of Science and Technology (POST), China currently produces 95-97% of the world’s rare earth metals, and prices continue to soar as the rising technology powerhouse cuts supply.

“A consistent supply is of future strategic as well as economic importance to the UK,” POST said in its report. “The average price of the rare earths for a non-Chinese purchaser has risen from 2009 to 2010, with some showing up to a ten-fold increase.”

A consistent supply is of future strategic as well as economic importance to the UK

According to the report, China cut exports of rare earth materials by 40% last year, and the Chinese Commerce Ministry predicts further supply cuts of 35% this year.

POST also said Chinese customs officials were delaying shipments at the ports and that China may have "a range of motivations for the export controls".

According to experts, China’s hard line on exports could encourage foreign companies to move production facilities to the country, with big US and Japanese storage manufacturers possibly affected.

“In the short term, this is a real issue,” said Paul Strange, professor of physics at the University of Kent. “There are sources of rare earth all over the world, but it takes a long time to set up facilities to extract and process them – it would take up to 10 years for other countries to get their supplies up and running.”

“In the meantime China might use it as a political bargaining chip.”

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User comments

Anyone know why the major industrial nations were happy with China's having a near monopoly on rare-earth materials? Could no-one foresee a problem with that?

By The_Scrote on 19 Jan 2011

StugOfTheDimp

Well, it's a hugely polluting operation, so we just let China do it. Why ruin our green and pleasant land, eh? Can you imagine Jim and Mary's outcry to the Guardian when uranium slurry trickles past their B&B?

Tad unfair, though, to turn around and demand that China sterilises more of its land (at a cost agreeable to us) to fulfil our requirements.

By solheng on 19 Jan 2011

Hopefully it will lead to more recycling.

By john_coller on 19 Jan 2011

@solheng Whereas Telegraph readers would be more than happy...?

By The_Scrote on 19 Jan 2011

It never used to be this way.

Rare earths aren't actually rare. And there used to be other producers...the US for one. But then the Chinesse entered the market under cutting the rest.

As the prices rise, these other sources become either viable and/or necessary.

By fingerbob69 on 19 Jan 2011

Chickens Coming Home to Roost

We've had at least a century of Western Industrialised nations exploiting other parts of the world to obtain cheap food, goods and services.

Now those countries are now becoming more economically active, the true cost of what we have been using as a society is becoming more apparent.

This is Capitalism and the Free Market working as exactly as intended. We're just so used to being King of the Hill, we'd forgotten that until now.

Still, I'm sure there's a few dodgy regimes in Africa or Latin America that will be helpful. Unless the Chinese sign them up first...

By Penfolduk01 on 20 Jan 2011

With the apparent millions of tech products being junked each year as product life-cycles shrink, surely there are tonnes and tonnes of these rare earths sitting in UK landfills or backs of drawers somewhere.

By Phoomeister on 20 Jan 2011

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