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China's domination in the production of rare earths – materials essential for manufacturing and technologies in a number of sectors – is leaving countries vulnerable to the availability of supplies, according to new research.
A new report from IHS Chemical argues that growing global dependence on diverse technologies such as computers, smartphones, defense systems, offshore wind turbines and hybrid automobiles "has left manufacturers and countries vulnerable to the availability and uninterrupted supply (largely from China) of some key elements used to produce these technologies."
China accounted for more than 85 percent of world rare earth production in 2012, while the country also consumed 70 percent of world production in the same year.
Supply disruptions were a major concern, said author of the IHS report, Samantha Wietlisbach.
"Such disruptions over the last few years interrupted Japanese automotive and electronics industry production and sent shock waves through the global manufacturing industries that rely on rare earths," Wietlisbach said.
"Other governments have realized their national security interests and industrial sectors were vulnerable, since China dominates the market in terms of both supply and demand," she said. "The supply shortages also resulted in unprecedented price spikes, impacting global consumers of these materials.
"It was a wake-up call to address diversity of supply and to explore possible substitutions. This, in turn, has led to many new mining projects being announced globally, with rare earth ore as the main product."