Rare earths keep technology moving in Europe | Business| Economy and finance news from a German perspective | DW | 30.08.2010
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Rare earths keep technology moving in Europe

As the world becomes more dependent on technology, it also becomes more reliant upon rare metals and minerals. The EU is preparing a strategy paper to secure a long-term supply of the increasingly necessary materials.

A handful of metal

Rare earths are essential ingredients for technological advances

It's a little known fact that in order to stay in the technology manufacturing game, Europe has to import some 40 rare metals and minerals. It's also a worrying fact because many of the materials used in the production of objects like cell phones and energy efficient lamps are either in limited supply or kept at artificially low levels by China.

According to the EU Commission, 14 of these rare earths, as they are called, are particularly scarce and are either only available in China or are mined for unrealistic prices elsewhere.

While China is key to these materials finding their way to the world market, Gwenole Cozigou, the commission's director for chemical, metals, forest-based and textile industries, is worried about the length of Beijing's arm.

He said although negotiations with the Chinese government over commodity trade are ongoing, foreign buyers are being forced to process rare earths into half-finished products on Chinese soil.

"China wants to build an industry and that is a perfectly acceptable goal, but if it violates trade regulations we will take action," Cozigou said. In this case, that means teaming up with the United States and Mexico to contact a World Trade Organization arbitration tribunal.

Taking on China

Hubertus Bardt, raw materials expert from the Institute for Economic Research in Cologne, told Deutsche Welle it's up to the EU to make sure China does not exploit its monopoly.

Pieces of tantal

Tantal is used in micro-processors

"One could threaten to impose import restrictions on Chinese products, but nobody wants that and ultimately it would harm us, too," he said. "But there are always new trade talks and political discussions, and it's important to use them to prioritize this problem."

It's a problem which he said he believes will only get worse as fast-growing, emerging nations become ever more dependent upon technology.

"There are a number of indications to suggest an increase in demand for these raw materials," he said. "Firstly there is growth in China, then growth in India and Brazil and then technical developments such as electromobility, solar panels and energy efficient lamps."

The role of developing countries

Besides entering into trade talks and exerting political pressure to secure itself a supply of rare earths, the EU is also keen to work in close cooperation with other developing countries known to have reserves of the raw materials.

Mountain region

The Democratic Republic of Congo has deposits of coltan

The bloc has already begun negotiations with the African Union, but is not, Cozigou stressed, offering development aid in return for rare earths.

"African countries have to realize that the extraction of raw materials at a fair price is advantageous for their own advancement," he said, adding that it was the only way to attract potential European investors.

But Bardt said there is a place for development aid if it helps countries with reserves to establish the kind of market systems and institutions which would ultimately be of benefit to Europe.

Time to recycle

According to the EU's observations, Beijing secures entry to the coveted raw materials through the aggressive acquisition of foreign mining companies and land and by making donations to the relevant regimes. Experts say it is a problem, not least because there are very few rare earth mining companies left around the world.

A hand holding mobile devices

Old phones should be recycled to recover reusable materials - not binned

That being the case, the European Union is supporting scientists looking for rare earths and is pushing for more recycling of raw materials from old mobile phones, televisions and cars.

"We have our own mines in our cities across Europe," Cozigou said, adding that the EU is currently working towards tightening regulations governing the export of electronic scrap and car wrecks. "The EU wants what has previously been considered electronic garbage to be deemed valuable raw materials."

Autor: Bernd Riegert/tkw

Editor: Sean Sinico

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