Remember the Oil Crisis? Get Ready for the Chinese Dysprosium Crisis

Bertel Schmitt
by Bertel Schmitt

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.”

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Wsn Wsn on Sep 04, 2009

    Well, to know whether (population) growth can last forever, we must first know if the total mass of the accessible universe is growing or not. This, so far, has been in the realm of theories only. But I am willing to bet the growth cannot last forever. If the universe is not growing, of course the population cannot grow forever. If the universe is indeed growing, then we may have a theoretical chance, but still may not have the time to migrate to other planets or galaxies before ours is doomed.

  • Shaker Shaker on Sep 05, 2009

    Humans (not to trivialize, really), are an equivalent to a 'cancer' on the earth - once the cancer gets too big, the host dies. Sorry for the downer.

  • MaintenanceCosts "But your author does wonder what the maintenance routine is going to be like on an Italian-German supercar that plays host to a high-revving engine, battery pack, and several electric motors."Probably not much different from the maintenance routine of any other Italian-German supercar with a high-revving engine.
  • 28-Cars-Later "The unions" need to not be the UAW and maybe there's a shot. Maybe.
  • 2manyvettes I had a Cougar of similar vintage that I bought from my late mother in law. It did not suffer the issues mentioned in this article, but being a Minnesota car it did have some weird issues, like a rusted brake line.(!) I do not remember the mileage of the vehicle, but it left my driveway when the transmission started making unwelcome noises. I traded it for a much newer Ford Fusion that served my daughter well until she finished college.
  • TheEndlessEnigma Couple of questions: 1) who will be the service partner for these when Rivian goes Tits Up? 2) What happens with software/operating system support when Rivia goes Tits Up? 3) What happens to the lease when Rivian goes Tits up?
  • Richard I loved these cars, I was blessed to own three. My first a red beauty 86. My second was an 87, 2+2, with digital everything. My third an 87, it had been ridden pretty hard when I got it but it served me well for several years. The first two I loved so much. Unfortunately they had fuel injection issue causing them to basically burst into flames. My son was with me at 10 years old when first one went up. I'm holding no grudges. Nissan gave me 1600$ for first one after jumping thru hoops for 3 years. I didn't bother trying with the second. Just wondering if anyone else had similar experience. I still love those cars.