Future of Work

Geopolitics of Technology: Blood Gadgets

Introduction

Rare earth elements (hereinafter, “REE”) are special minerals and are a crucial ingredient in many of our electronic products. They contain unique properties which include high heat resistance, strong magnetism, high lustre, and high electrical conductivity. These properties make them suitable to be used in a variety of tech products such as smartphones, tablets, laptops, and even in the technologies used for military or medical profession. Examples of consumer and industrial technologies involving the use of rare piles of earth include iPhones, Blackberries, fibre optics, computer disk drives and memory chips, Liquid Crystal Displays, superconductors, X-ray tubes, lasers, petroleum refining, and magnets. These products are an essential part of our daily functioning and our need for their supply will keep growing with every new technological innovation.

Since it is expected that the demand for rare piles of the earth will increase over the next several years, the question arises, as to whether the supply of rare earth metals will keep up with innovations in technology and a rise in the demand for tech products. The aforesaid considerations stem from the fact, that there is only a limited supply of these natural resources, as well as a limited base of suppliers, resulting in the increasing cost of these elements for the tech manufacturers.

REEs are not rare, they are found all over the world. However, their production is both expensive and potentially damaging to the environment, which makes them scarce. For many years, the United States was self-reliant; it was the world’s primary producer of REEs into the 1980s. But that changed completely by the late 1990s. China’s lower labor costs, willingness to use cheaper, environmentally damaging production methods and wilful efforts to price others out of the market have led to a Chinese near-monopoly of REEs.[1]

Geo-Political Issues

There are approximately 17 rare earth metals, which are difficult to find and currently, China holds a monopoly over most of them. These rare earth metals are of a huge importance as they are used in a large number of things and the process of mining has a great environmental cost. Due to the growing tussle between China and the USA, China imposed restrictions on the export of these rare metals, resulting in an unprecedented increase, in the price of these scarce resources[2]. This manoeuvre by China was a move to retaliate, in response to the current trade dispute going on between US and China, two of the world’s most significant superpowers.

This diplomatic standoff between China and the US added to the already complex situation of export. In 2019, the US government increased tariffs imposed on Chinese goods from 10% to 25%, in retaliation to which China also imposed tariffs on imports from the US[3]. The increase in tariff by the US government was done in accordance with Section 301[4] of the Trade Act, 1974. Since China imported far fewer goods from the US than the US does, the only way to counter the US government’s move was by imposing sanctions on the export of rare earth to the US. Considering the dependency of the USA on rare earth imports from China, things escalated and a situation of trade war arose between the two countries. The discrepancy in prices inside and outside China gave an unfair advantage to the Chinese firms. China also banned the export of these metals to Japan after the Senkaku boat collision incident[5].

Since Japan and the USA were China’s top export markets with Japan importing 54% and the USA importing 14% of the total, a trade war began. To curb the dependence on China’s supply of rare earth minerals, the USA, Japan, Australia and India have agreed to join hands. This allegiance known as the Quad Nations has agreed to outplay China in the supply of rare earth minerals and set up a supply chain to decrease the dependence of China[6]. Apart from REEs, Quad Nations also aimed at supplying COVID-19 vaccines to other countries[7].

Zero-Day Vulnerability

A zero-day vulnerability is an unintended flaw in the software which is known by the vendor but doesn’t have a patch for fixing[8]. This flaw has the potential of being exploited by cybercriminals. Due to the ongoing trade war and the history of Chinese tech giants helping the Chinese government in espionage[9], it is time for the US government to reconsider the import of “Advanced Technology Products” (ATP) from China. During the early 1980s and 1990’s the only imports from China were the labour-intensive products like toys but in recent years the US has started importing more ATP’s from China. US imports of ATP’s from China amounted to $ 171.1 Billion in 2017.

These figures show the USA’s heavy reliance on ATP’s on China. Considering Chinese governments espionage activities, a case for zero-day vulnerability in ATPs can easily be made. China could supply faulty products and later use them to collect sensitive information.

The need for clean tech

Intense REE mining and production activities have led to significant environmental and health impacts in countries such as China, US, India, Malaysia and Brazil. Mining activities such as cutting, drilling, blasting, transportation, stockpiling, and processing can release dust containing REE, other toxic metals and chemicals into the air and surrounding water bodies which can impact local soil, wildlife and vegetation in addition to humans. Elements like REEs which were not commonly used in the past are increasingly being used now in modern industries for the production of numerous new materials, finished products and for several technological applications. The dumping of huge amounts of e-waste is facilitating the release of significant quantities of these elements along with several other toxic elements into the subsoils and groundwater.[10] This contamination from dumping huge amounts of e-waste releasing REE in large quantities into the subsoils and groundwater is emerging very fast.[11] These problems are due to insufficient environmental regulations and controls in the mining and processing areas. This calls for the need for clean technology and forming a better supply chain.

The boost towards clean technologies has strengthened recently not only due to the perceived benefits of a reduced carbon footprint but also due to the desire to reduce dependency on other nations for resources. Recycling can be said to be a good way forward, to help overcome the problem of overusing and dumping these elements. Although the rate of recycling is very low, due to the fact that the quantities of REEs found in electronics is normally very low. In some materials like touch screens, these metals are evenly distributed making them much more difficult to extract. Regardless of the end-use, REEs are not recycled in large quantities mainly because of low yield and cost, but recycling could be feasible if it becomes a mandate or the prices of REEs become extraordinarily high.

Conclusion

Given the rise in environmental, cost and supply problems, there is a need to either reduce the amount of REE usage in pertinent industries or to find alternates and less harmful substitutes for different REEs.  Several countries have already started working towards finding substitutes for REE devices. Hitachi Metals is working on a magnet that minimizes the use of REE by employing copper alloys. Some groups are trying to develop a “super magnet” by layering iron and nickel which is designed to be a synthetic form of tetrataenite, a rare magnetic extra-terrestrial iron-nickel alloy found only in meteorites. Lots of other leading multinational electronic firms such as Samsung are vigorously working on replacing REE in their applications.[12] In order to eliminate the problem of zero-day vulnerability and ensure that the technology that reaches our hands is clean and sustainable, some strong measures are required by the Quad Nations. To decrease the reliance on China for the import of REEs, new avenues for Rare Earth mining have to be discovered.

This article can be cited as:

Shambhavi Sinha, Geopolitics of Technology: Blood Gadgets, Metacept- Communicating the Law, accessible at https://metacept.com/geopolitics-of-technology:-blood-gadgets/

Resources:


[1] Mazza, M., Blumenthal, D., Schmitt, G. (2013). Ensuring Japan’s Critical Resource Security: Case Studies in REE and Natural Gas Supplies. American Enterprise Institute., <https://www.aei.org/wp-content/uploads/2013/07/-ensuring-japans-critical-resource-security-case-studies-in-rare-earth-element-and-natural-gas-supplies_180131600240.pdf?x91208>

[2] (2021, March 13). Rare earths, their strategic significance, China’s monopoly & why it matters to the Quad. ThePrint.

<https://theprint.in/opinion/rare-earths-their-strategic-significance-chinas-monopoly-why-it-matters-to-the-quad/621142/>

[3] Schmid, M. (2019). Rare Earths in the Trade Dispute Between the US and China: A Deja Vu. Intereconomics. <https://www.intereconomics.eu/contents/year/2019/number/6/article/rare-earths-in-the-trade-dispute-between-the-us-and-china-a-deja-vu.html>

[4] Trade Act, s 301 (1974).

[5] McCurry, J. (2010, September 9). Japan-China row escalates over fishing boat collision. The Guardian. <https://www.theguardian.com/world/2010/sep/09/japan-china-fishing-boat-collision>.

[6] Quad may pose some challenge to China-produced rare earths, but too costly and unsustainable: analysts. (2021, March 12). Global Times.

<https://www.globaltimes.cn/page/202103/1218209.shtml#:~:text=Among%20the%20four%20nations%2C%20Australia,consumer%20electronics%20to%20military%20equipment.>

[7] Roche, E. (2021, March 12). Quad nations tie up to boost production of covid vaccines. Mint. <https://www.livemint.com/news/world/quad-countries-to-launch-joint-venture-to-boost-covid-vaccine-production-11615567574874.html>

[8] Chivers, K. (2019, August 28). Zero-day vulnerability: What it is, and how it works. Norton. <https://us.norton.com/internetsecurity-emerging-threats-how-do-zero-day-vulnerabilities-work-30sectech.html>

[9] Dorfman, Z. (2021, January 10). Tech giants are giving China a vital edge in espionage.Australian Financial Review. <https://www.afr.com/technology/tech-giants-are-giving-china-a-vital-edge-in-espionage-20210107-p56sbr>

[10] Balaram, V. (2019). REEs: A review of applications, occurrence, exploration, analysis, recycling, and environmental impact. Geoscience Frontiers, 10(4), 1285–1303. https://doi.org/10.1016/j.gsf.2018.12.005

[11] Haxel, G.B., Hedrick, J.B., Orris, G.J., (2005). REEs – Critical Resources for High Technology | USGS Fact Sheet 087–02. USGS. <https://pubs.usgs.gov/fs/2002/fs087-02/#:%7E:text=The%20more%20abundant%20REE%20are,times%20more%20common%20than%20gold.>

[12] Supra, no. 10.

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