myBlessedHope

Something to think about, not only are we tied to China through debt and durable goods, but also the specialized metals that make up a lot of the durable goods we buy and depend on daily…

_________________________________________________________________

China Hold on Metals Worries Washington

WASHINGTON—China’s control of a key minerals market has U.S. military thinkers and policy makers alike worried about access to materials that are essential for 21st-century technology like smartphones—and smart bombs.

The concern over supplies of so-called rare-earth elements was highlighted this week by a report that Chinese customs officials had blocked exports of the materials to Japan. On Thursday, Beijing denied those reports. “China doesn’t block rare-earth exports to Japan,” said Chen Rongkai, a spokesman for China’s Ministry of Commerce.

Laborers at a rare-earth mine in August in Jiangxi province. China holds the majority of rare-earth materials.

At issue is a group of 17 metallic elements with magnetic properties suited for high-tech applications such as computer hard drives and digital cameras. Rare-earth elements are also key to “green” technology: Energy-efficient light bulbs use europium and yttrium, while hybrid car batteries and wind-power turbines use neodymium.

While rare-earth ore deposits are found around the globe, China’s dominance in mining and processing the elements has raised alarms in Washington. According to an April 2010 Government Accountability Office report, China now produces approximately 97% of the world’s rare-earth oxides, the raw materials that can be further refined into metals and blended into alloys that can be made into finished components.

Over the past year, China has imposed global export quotas on the elements. Its Commerce Ministry has said total exports for the year would be capped at just under 30,300 metric tons, down 40% from last year. Only 7,976 tons of that were allocated for the second half of this year. Experts say much of that has already been shipped.

That has spurred anxiety among government officials and industry executives. Delegations from the U.S., Germany, and Japan have implored Beijing to recognize how critical they consider sustained supply.

Premier Wen Jiabao pledged last month to a visiting Japanese delegation that China wouldn’t halt exports. Chinese officials have said the tighter export limits this year are motivated by environmental concerns. During the meeting with the Japanese, Chinese Commerce Minister Chen Deming said Beijing had tightened controls over production and trade because “mass-extraction of rare earth will cause great damage to the environment.”

Earlier this week, London-based Industrial Metals magazine and the New York Times reported that China had blocked a shipment of the metals, in retaliation for Japan’s detention of a Chinese fishing boat captain on Sept. 7 amid a territorial dispute. Officials in Japan’s foreign and trade ministries said they weren’t aware of such an embargo. Any ban on shipments to Japan would mark a startling escalation of the dispute, one that would risk aligning Japan, the U.S. and others against China for using its global commercial clout in a bilateral political dispute.

Rare-earth metals have important military applications because of their magnetic strength, which allows for extraordinary miniaturization of components. The fins that steer precision bombs, for instance, have samarium-cobalt permanent magnet motors. The motors that run the rudder and tail fins on a high-performance fighter aircraft like the Air Force F-22 Raptor are built with lightweight, rare-earth magnets. Neodymium is found in the solid-state lasers used to designate targets.

In the newest issue of Joint Force Quarterly, a professional military journal published by National Defense University, Navy Reserve Lt. Cdr. Cindy Hurst, a research analyst in the Foreign Military Studies Office at Fort Leavenworth, Kan., wrote that “China appears to be holding an unlikely trump card” through its dominance in the rare-earth element industry.

“The country’s grasp on the rare-earth element industry could one day give China a strong technological advantage and increase its military superiority,” she wrote.

The Department of Defense is completing a study to identify the potential national security risks of rare-earth material dependency. Pentagon spokeswoman Cheryl Irwin said a full report drawing on input from a number of government agencies will be released next month.

“It is a highly charged topic,” she said, adding the Pentagon is seeking to separate “fact from fiction to ensure we continue to protect the interests of both the warfighter and the taxpayer.”

In parallel, U.S. lawmakers have begun probing the national-security implications of rare-earth supplies. The House Committee on Science and Technology’s investigations panel held a hearing this year on the issue, and on Thursday, the committee began marking up a bill that would encourage the U.S. government to hedge against rare-earth shortages by collecting more data on potential supply and identifying alternative materials.

Rep. Bart Gordon (D., Tenn.), chairman of the committee, said he was concerned about the United States being “held hostage” when it came to access to raw materials for new technology.

Molycorp, Inc., the owner of a mine in Mountain Pass, Calif., that holds the largest, richest rare-earth deposit outside China, is currently looking to restart and expand production. Jim Sims, a spokesman for Molycorp, said the company was planning by mid-2012 to create a complete U.S.-based supply chain for some kinds of rare-earth magnets.

Company representatives have also discussed the ongoing Department of Defense study with Pentagon officials.

Mr. Sims said the study was a “pretty significant undertaking” that involved going many steps down the defense industry supply chain to understand how rare earths contribute to a weapons system.

“It’s a difficult supply chain to ferret out,” he said, because “in some cases, the rare earths are used in such small amounts.”

_________________________________________________________________

Click on the article title for a link to full original referenced article.