The reason is rare earths. They are needed for manufacture of everything from compact florescent bulbs to the generators on wind turbines. The Chines have the market cornered and
they know it.
By closing or nationalizing dozens of the producers of rare earth metals — which are used in energy-efficient bulbs and many other green-energy products — China is temporarily shutting down most of the industry and crimping the global supply of the vital resources.
China produces nearly 95 percent of the world’s rare earth materials, and it is taking the steps to improve pollution controls in a notoriously toxic mining and processing industry. But the moves also have potential international trade implications and have started yet another round of price increases for rare earths, which are vital for green-energy products including giant wind turbines, hybrid gasoline-electric cars and compact fluorescent bulbs.
General Electric, facing complaints in the United States about rising prices for its compact fluorescent bulbs, recently noted in a statement that if the rate of inflation over the last 12 months on the rare earth element europium oxide had been applied to a $2 cup of coffee, that coffee would now cost $24.55.
It's not like the U.S. doesn't have it's own sources. We just can't mine it because of the
high environmental regulation cost.
But in 2006, nearly all of the world’s roughly 137,000-ton supply of rare-earth oxides came from China. And over the past few years, China has cut exports to nurture its own permanent-magnet industry, sending the price of neodymium oxide to a high of $60 a kilo in 2007. This worries analysts like Irving Mintzer, a senior adviser to the Potomac Energy Fund who sees shortages stifling clean-tech industry, and worse. “If we don’t think this through, we could be trading a troubling dependence on Middle Eastern oil for a troubling dependence on Chinese neodymium.”
Rare earths are actually fairly common. What’s rare is finding deposits that can be mined profitably, in part because most contain radioactive thorium. Relatively speaking, Mountain Pass—whose rare-earth deposits were discovered in 1949—is not too radioactive, and through the 1950s the ore was mostly used to make flints for lighters. In the 1960s, the pit grew deeper as demand increased for the rare-earth element europium, which was used to create the red tones in color TVs. In fact, until 1989, the expanding pit at Mountain Pass supplied most of the world’s rare earths...
Mountain Pass was forced to
shut down.
Mountain Pass couldn’t compete on price alone—especially given the mine’s growing ecological costs.
They are trying to reopen it, but the environmental monitoring cost will be
$2.4 million a year alone. Basically, instead of being at the mercy of OPEC for oil, we are now at the mercy of China for rare earths. This is why most "green jobs" are actually created in China. They can make cost effective wind turbines and solar panels because they have access to cheaper materials. This isn't an accident.
(Really Herman?)
(Just likes Mel in a kilt)
