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China’s Rare Earth Metals

China’s Rare Earth Metals. Anthony Cosimano. What are Rare Earth Metals?. Elements on the lower periodic table found in the earth’s crust A few of these elements are used heavily in the production of technologically advanced goods Such as... Smart phones

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China’s Rare Earth Metals

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  1. China’s Rare Earth Metals Anthony Cosimano

  2. What are Rare Earth Metals? • Elements on the lower periodic table found in the earth’s crust • A few of these elements are used heavily in the production of technologically advanced goods • Such as... • Smart phones • Electric and/or energy efficient car batteries • Wind turbines • Military defense systems

  3. China’s Market Dominance • China controlled between 95-97% of the global market of Rare Earth Metals in 2010 • Because of WTO sanctions, their market share is approaching 80% this year • Despite high demand, China can dictate global supply for such valuable resources • Over 90% of China’s exported rare earth metals are received by the United States

  4. WTO’s Recent Decision • Yesterday, the WTO ruled that China’s withholding of rare earth metals from the global market was illegal • Controlling supply was artificially increasing both demand for the product and prices of the good • Prices of the metals increased three-fold after China decreased exportation by 30,000 tons last year • “No one country can hoard its raw materials from the global market place at the expense of its other WTO partners.” – Karel De Gucht(EU Trade Commission)

  5. The Conflict • US companies were paying three to four times as much as their Chinese counterparts for the same supplies to produce finished goods • This makes products from Chinese companies more competitive than those of American and European companies on the global playing field • Perpetuates international belief that China takes part in unfair global economic practices • i.e. Artificially deflating currency, hoarding foreign currency, unreasonably high tariffs on certain companies/goods, etc.

  6. Does the WTO have the right to step in? • Do foreign investors have ground to stand on when telling China they have to sell their own resources? • China’s decrease in exportation of rare earth metals was quoted as “an effort to stop over-mining and to preserve the environment from the harmful effects of mining for rare earth metals.” • China’s resources vs. Global Use

  7. Filling the Possible Void • In response to China’s economic practices, Canada has set a goal to meet over 20% of the global demand for rare earth metals by 2018 • In anticipation of this, the United States has gotten on board, and capital construction costs for the joint project are estimated at around 2.6 billion dollars • Both countries share the common goal of minimizing dependency on China for these products, as well as promoting environmental preservation throughout the process

  8. Questions?

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