Stringer Shanghai/Reuters -
A man w
Two years after
China limited its exports of “rare earth minerals,” unnerving developed
countries that depended on them for industrial uses, production is
expanding at sites outside China.
And as new sources of rare earth minerals have appeared, that
has meant new jobs — including in the tiny town of China Grove, N.C.,
where Japan’s Hitachi Metals is planning to produce high-tech magnets
from rare earth minerals.
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The Hitachi plant and its 70 new manufacturing jobs are a small
example of how market forces can sometimes undercut China’s trade
clout.
In recent years, China has dominated the production of
these magnets, in part because the country has had a virtual monopoly on
the mining and refining of the rare earth elements used in their
production.
There are 14 rare earth minerals commonly used in
industrial applications. The elements are difficult to find in
concentrations that can be commercially exploited. They provide, for
example, the illumination in night-vision goggles. A fraction of a gram
of elements such as dysprosium or Europium provide the colors that light
up the screen of a smartphone. A hybrid car might contain 40 pounds or
more of rare earth magnets — lighter and more powerful than traditional
iron-based magnets — in the battery-based power chain or small motors
that run power windows, seats and other accessories.
Hitachi Metals produces magnets that it hopes to sell to the makers of hybrid and electric cars.
“Just
like any other supplier, we are trying not to be dependent on Chinese
sources,” said Koshi Okamoto, executive director of New York-based
Hitachi Metals America. “Reliable sources of supply are clearly one of
the top priorities.”
North Carolina Secretary of Commerce J. Keith
Crisco said that when the state was in talks with Hitachi about
expanding, company officials said their other option was to make the
magnets in China.
“We need to be good partners [with the Chinese]. Not pansies; good partners,” Crisco said. “They are a major economic force.”
Alarmed over Chinese restrictions on rare earth exports,
the United States, the European Union and Japan filed a World Trade
Organization complaint alleging that China was using its monopoly over
the minerals as a political and economic weapon — for instance, to
punish Japan over its claims to contested islands in the South China Sea
and to entice companies to relocate factories inside China by offering a
cheaper supply of rare earth materials.
Even as the United States
was pursuing its WTO claim, Colorado-based Molycorp, along with firms
in Australia and elsewhere, were reshaping the landscape. Molycorp
reopened a rare earth mine in Mountain Pass, Calif., that had been
shuttered a decade ago because the supply of the minerals coming from
China was so cheap.
Molycorp President Mark A. Smith said the
company, which has scaled up employment at the mine from 55 to 420 in
recent years, aims to produce as much as 40,000 metric tons a year by
2013, accounting for about 30 percent of projected world supply.
As
important, he said, the company recently acquired China-based Neo
Materials and with it the technology needed to provide the more purely
refined rare earth oxides used in computer, defense and
telecommunications equipment.
At the peak of China’s influence on
the market, he said, companies could get rare earth materials about
40 percent cheaper there than elsewhere. China used that advantage to
recruit firms to the industrial regions near the source of the
materials. Smith said the Chinese price and the world price have now
nearly converged, and he predicted more announcements like Hitachi’s.
“As you see that diversity of supply, you’ll see R&D come back, and you’ll see manufacturing come back,” Smith said.
