Now we know why China is at the forefront of alternative energy propulsion:
For oil, China is at the mercy of unstable places and easily disruptable shipping routes. The Middle Kingdom is the second-largest oil consumer in the world (behind the United States). China imports about half of its oil, making it the third-largest net oil importer in the world behind the United States and Japan.
When it comes to dysprosium and terbium, China is in a much better position, called a quasi-monopoly.
China controls more than 90 percent of the global output of the stuff. And what’s so special about dysprosium and terbium? You need it to make the permanent magnets used in electric motors or generators. Without dysprosium, the Prius is dead, and the Volt is deader than dead. The missile gap of the 60’s is nothing compared to the looming dysprosium gap.
China is getting quite possessive with the stuff. “China said supplies of dysprosium and terbium, minerals needed to make hybrid cars,” writes Bloomberg, “may be inadequate for its own needs, adding to concerns that the largest producer of rare earths may further cut exports.”
Dysprosium and terbium are rare earths. Rare earths are called rare earths because they are, well, rare on the earth. “The rest of the world has become a little concerned” about possible export bans from China, said Judith Chegwidden, managing director at London-based Roskill Information Services Ltd, an industry research group. “Dysprosium is increasingly used in hybrid cars like Prius or wind turbines. Demand is growing fast.”
China’s government started to curb output and exports in 2006. China may stockpile the rare dirt in a strategic reserve. Chinese exports of rare earths fell 35 percent in 2008 from 53,300 tons in 2006, all the while demand grows in areas of military defense, missiles, electronic information and green energy. China needs 70,000 tons of rare earths a year. They already cut 2009 output quotas of rare earths by 8.1 percent. They also encourage their industrialists to export processed products rather than just shipping the rare dirt abroad. Liang Shuhe, deputy head of foreign trade at the Ministry of Commerce said his government would “encourage exports of high value-adding, high-end products instead of the raw materials.”