Friday, September 16, 2011
A bit of a storm has been brewing over the past few years. "Rare earths" are elements used in a variety of products and though deposits can be found all over the world, recently it's been cheapest for China to mine and process them, so the world has become dependent on their production to such an extent that it could take years to develop new sources, even though they have been produced domestically before. Now it seems as though China intends to use that dominance to start squeezing consumers of rare earths. They making excuses about the environment but the bottom line is that they are restricting the supply just like any monopolist would. This is making people nervous, since products from mobile phones to wind technology rely on the materials. Lots of prices are rising and more will soon as China shows pretty good familiarity with capitalism after all.