If you cannot, then China has truly f***ed you and you did not notice.
First, some facts.
Rare earths are 17 elements, found together in rocks. The two of them more important for electric vehicles are lanthanum and neodymium.
Ovonics, an american firm, invented the Nickel Metal Hydrid (NiMH) battery in 1980. It doesn't work without lanthanum.
Prius battery, a typical NiMH battery (altough the one in this picture has been hacked). You need 2 kg of Neodymium to manufacture it
Anyway, Ovonics started a joint venture with General Motors. 60% of the new venture went to GM.
Meanwhile, in 1982, GM invented the Neodymium-Iron-Boron magnet (NdFeB). Of course, it works with Neodymium. It allows you to create cheap, permanent magnets.
NdFeB magnet: you've probably seen some of them, with its "black pearl" shine. You need one tonne of those magnets to build a wind turbine
So, everything went dandy: you need batteries and magnets to create electric vehicles (and almost anything that uses a computer), but the mighty GM had its corporate hands on both of them. Of course, almost everybody has heard how GM managed to shut down the technology: all EV-1 vehicles were destroyed in the desert and the Hummer came along.
I believe (deep in my latino heart) that it was a calculated move, specially after I saw this and, of course, because we knew what would happen to oil prices two years before the Iraq war (search for our posts on the subject):
[youtube]http://www.youtube.com/watch?v=nsJAlrYjGz8[/youtube]
Hey, don't worry, dudes. I'm an old hippie but I am not as boring as that. This post is not about another US conspiracy, it's about a China conspiracy, remember?
So, what has happened since then?
First, Deng Xiaoping was a clever guy, and not only because he avoided to be head of state or head of government or secretary of the Communist Party: he, instead, recevied the title of "dǎng hé guójiā zuìgāo lǐngdǎorén" or "Paramount Leader" (or, in F1Tech terms, forum moderator
).Why would I have given him this egregious title? Hear this:
Famous words (at least in my house) by Xiaoping: "Arabia has oil, China has rare earth"
Allow me to reinforce Deng's words with these:
"We are addicted to rare earths as much as we are addicted to oil... none of these elements are famous like gold or silver. None gets shipped in giant ore freighters like iron, aluminum or copper. Without these elements, much of the modern economy will just plain shut down" -- Byron King, editor of Energy & Scarcity Investors --
Now, the politics.
Where can you find rare earths? Well, check this (in this site your computer was born):
Banyan Obo mine: here you'll find 70% of rare earth deposits on this planet.
Of course, there are other sites: Brazil, Canada, Vietnam (owned by Toyota in its entirety) and Colombia (yeah, the happiest country in the world will escape again the scarcity: we are no fools, a friend bought a Mercedes recently because of rare earths, that's why I'm writing this
).Now, what has China said recently?
"Either by stupidity or design the Chinese flooded the market in the mid 1990s and collapsed the price. Almost everybody else went out of business". -- Anonymous source, BBC --
However, that's not a problem: if they want to sell the stuff cheap, it's ok, isn't it? Well, perhaps not. Arabia sold oil very cheap until they got us by our bollocks...
The end result is that the Californian and Canadian mines went out of bussiness. California hasn't produced the rare earths since 1998. The Canadian site should start to produce in 2011 but lost financing. Australia says it will produce it in 2011. Together they could produce 30% of what China produces. We have another oil monopoly in the making, this time with electric cars!
When will the price structure collapse?
Hear this: in 2006 China consumed 60% of the stuff.
Now, the punch line: China has put a ban on rare earth exports. It has put a cap on the current level of exports (35.000 tonnes). Of course, contraband is rampant (20.000 tonnes per year are smuggled somehow out of China, on top of the 35.000 legal tonnes).
Finally, the cherry on the cake: in the end, after all the moves and countermoves, 97% of all elements vital for green technology are produced in China.
You know what? China's demand is predicted to equal the entire Chinese supply by 2012.
Expect mainstream news to go frenzy about this subject in two years or so.
Any ideas? (or counterarguments?)
