For Manufacturing, Worrying about a Rare Earth Shortage

By January 5, 2011Trade

In Washington, D.C., the local Fox News affiliate reports on the impact of a potential shortage in rare earths on consumer electronics, “China Mineral Shortage Could Affect Consumer Electronics”>China Mineral Shortage Could Affect Consumer Electronics.” The NAM devote a lot of energy to this issue.

[Manufacturers] of everything from automobiles to MRI machines are nervous about a potential shortage.

“And they have reason to be,” says Patricia Mears, director of International Commercial Affairs for the National Association of Manufacturers. “There are probably going to be short term difficulties with this.”…

Rare earths are essential in industry and defense. They’re used to refine petroleum, create green energy technologies like hybrid batteries, wind turbines, and compact fluorescent bulbs. They also help operate radar and missile guidance systems, which is why the United States is “very concerned” about China’s actions.

NAM hopes a solution can be negotiated. “The best outcome, really, is to sit down with China, talk to them, and achieve a realistic settlement with them in the short term.”

China says it is cutting back for environmental reasons – which Mears explains, it has a right to do.
But others believe the real reason is to give Chinese companies preferential treatment and a competitive advantage. That, says Mears, would be illegal under World Trade Organization rules.

We’ll be looking for comments on the issue from speakers at the International Consumer Electronic Show, which gets under way in Las Vegas on Thursday.

The NAM joined other international business groups last year in highlighting the importance of access to rare earths in a letter to the G20 nations.

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