EDITOR: | March 31st, 2013

China’s Rare Earths hegemony deeply rooted in bovine flatulence, oil, and Cold War concerns.

| March 31, 2013 | No Comments
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china-power-positionHow could a single country manage to control 95% of the global trade of rare earths, a group of strategic elements that is so significant that it makes the policy advisors of the other 195 countries look like dunces?

Some of the smartest people on the planet toil as policy analysts, prognosticating the future.   How is it possible that our best minds would ignore an entire section of the periodic table in their analyses?

According to traditional wisdom, China’s lax environmental laws facilitated the commercial exploitation of rare earths in a state-sanctioned wildcat approach.  Thus supported by indirect subsidies, the Chinese industry flourished until it turned into a capricious dragon that threatens the global village with export restrictions. But this explanation is naïve at best.  On the one hand, western economies are deeply rooted in the Judeo-Christian philosophy of natural resources exploitation, a God-given license directly from the Book of Genesis.  Therefore, if the West had understood the strategic importance of rare earths, environmental issues or not, it would have promoted their development in earnest.

The alleged lack of environmental policies in China cannot solely explain the rise of the Chinese rare earths industry.  History shows a deep awareness of strategic resources, starting from square timber, beaver pelts, coffee beans, and oil as examples.  The history of the West is replete with conflicts over strategic resources.  In our article of March 16, 2013 (click here) we conducted an analysis of the subsidy costs of wage the war in Iraq, ostensibly to protect a crude oil output of 4 million barrels a day.

Was the West policy-blind, policy-drunk or both?

We need to understand the contemporaneous policies that prevailed in the West when China began its push into rare earths development in the early 1990s.

In the pre-Kyoto era of the early 1990s climate change was derided as a far-fetched tree-hugging notion that emphasized blindness.  Ronald Reagan set the stage in the eighties for policy blindness when he purported that methane emissions from cows and trees were the main source of greenhouse gases, hence global warming.   He painted a policy landscape that bluntly excluded rare earths: if cows and trees are the main cause of climate change, then there is no need to worry about rare earth elements to support wind power, electric cars.

At the same time the preoccupations of the early nineties were heavily coloured with oil-centric and Soviet-phobic fears.  The Berlin wall was destroyed in 1990.  In January 1991, a coalition of 35 countries took on Saddam Hussein in the First Gulf War, to protect oil interests.  On December 25, 1991 the Soviet Federal Government was dissolved, leading to the independence of the USSR’s republic.  Undoubtedly the price of oil, as manipulated by Saudi Arabia in the 1980s, played a role on the disintegration of the Soviet regime.

There is nothing wrong with protecting oil supplies, but it created a philosophical contradiction with electric cars, solar power and wind towers in the broader climate change paradigm.  Mind you, President George W. Bush instituted renewable energy policies, but more to support energy security through biodiesel and ethanol than to address climate change.

And so, the West found itself playing catch up, looking for a way out of a strategic blooper.  Even now the Russian government is allegedly stockpiling rare earths while we’re debating.


Dr. Luc Duchesne

Editor:

Dr. Luc C. Duchesne is a Speaker and Author with a PhD in Biochemistry. With three decades of scientific and business experience, he has published ... <Read more about Dr. Luc Duchesne>


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