As 2010 closed, news came that China has once more cut its exports of rare earths (vital in electronics manufacturing). The cuts, for 2011, are another 11 percent, following a whopping cut of 40 percent for the year 2010. According to this source, which cites the International Business Section of the Economic Times, China now controls more than 90 per cent of all rare earth supplies, of which lithium is one of the most prominent.
I pointed out the problems of the “market based” policies of the United States as far back as the summer of 2009 here. Herewith I update the chart I published then, based on U.S. Geological Survey data obtainable here. I’ve added data for 2008—and then for good measure I’ve charted (indexed to the right margin) the actual value of rare earths in dollars per metric ton. Here is the chart.
The interesting facts here are that U.S. reliance on its baseless faith in markets—in a world where some people just “don’t believe,” is that we’ve stopped producing rare earths back in 2001 already. We’re still exporting some of our remaining stocks—and importing a whole lot more. The other stunning fact is what has happened to the price of rare earth. These prices have risen from a recent low of $3,890 per ton in 2006 to $12,100 in 2008.
When others follow an “economic policy,” so-called, and we do not (looking blindly up into heaven as we wring our pious hands), what happens is, well—what happens. In the grip of a political ideology which believes that government must shrink—but which never ever specifies what “government” actually means—we’re in the hands of fools riding an imaginary wingless monster as it takes off over the abyss.
In 1984, the United States still represented 61 percent of world production of rare earths. What has happened in the meanwhile is that investments in their exploitation took place elsewhere, especially in China—and undoubtedly with state funds—while we have stopped investing in the exploitation of our reserves. In 2008, our reserves represented 14.8 of world reserves, China’s 30.7 percent. We’ve neglected ours, they’ve invested in theirs. Our approach to resources does not permit us to be adaptive to demand.
Filed under: China, Imports-Exports, International Trade, Technology Tagged: | Economic Policy, Free Market Economics, Lithium, Rare Earths
