[Marxism] A Different Environmental Threat: Peak Rare Minerals, China, and Green Technology

michael perelman michael at ecst.csuchico.edu
Sat Sep 5 20:54:23 MDT 2009

One of the keys to Green Technology may be buried in China. It has only 
recently begun to appear in the media, but for very different reasons. 
A couple of years ago, the New Scientist published a piece about the 
risks of the scarcity of rare minerals.

Cohen, David. 2007. "Earth's Natural Wealth: An Audit." New Scientist 
Issue 2605 (23 May): pp. 35-41.

Three facts are bringing this looming shortage to the attention of 
mainstream media.  First, the US is dependent on exports of these 
minerals, while China is the main exporter.  Second, these minerals are 
crucial for high technology, including both military and so-called Green 

My next encounter with the rare earth problem came in David Cay 
Johnston's wonderful book.  Here are my notes:

Johnston, David Cay. 2007. Free Lunch: How The Wealthiest Americans 
Enrich Themselves at Government Expense (And Stick You With The Bill) 
(New York: Portfolio).

37: "In 1982, competing groups of scientists around the world found a 
way to combine iron and boron with a somewhat rare earth called 
neodymium to make extremely powerful and lightweight magnets. These 
magnets quickly found a market in computer hard drives, high-quality 
microphones and speakers, automobile starter motors, and the guidance 
systems of smart bombs."

38: "General Motors created a division to manufacture these magnets, 
calling it Magnequench ....  Then in 1995 the automaker decided to sell 
the division. Because the deal was for only $70 million it attracted 
little attention. The buyer was a consortium of three firms .... but the 
real parties behind the purchase were a pair of Chinese companies -- San 
Huan New Material High-Tech Inc. and China National Nonferrous Metals. 
Both firms were partly owned by the Chinese government.  The heads of 
these two Chinese companies are the husbands of the first and second 
daughters of Deng Xiaoping, then the paramount leader."

38: At the time, GM was trying to get a toehold in China.  One of the 
Goddard's was at the time vice minister of the Chinese State Science and 
Technology Commission, which had the responsibility for acquiring 
military technology by any means.

39: The Clinton administration agreed the sale under the condition that 
the new owners keep the production and technology in the United States. 
  The new owners began to buy factories in the United States including 
GA Powders, an Idaho firm that used government money to develop a 
monopoly on the production powerful methods.  Then the Chinese company 
shut down American production and moved everything to China.

The reference to Deng is interesting, as you will see in a moment.

More at:


Michael Perelman
Economics Department
California State University
Chico, CA

530 898 5321
fax 530 898 5901

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