The U.S. Military Depends on China for the Metals Required to Build Smart Bombs

September 30th, 2010

Via: Bloomberg:

A senior manager at a company that churns out metals routinely used in U.S. smart bombs pauses in mid-sentence when his phone rings: a Wall Street stockbroker looking for information. He makes a note to have an assistant call back — someone who is fluent in English, not just Chinese.

“It’s a seller’s market now,” says Bai Baosheng, 43, puffing a cigarette in his office in Baotou, China, where his company sells bags of powder containing a metallic element known as neodymium, vital in tiny magnets that direct the fins of bombs dropped by U.S. Air Force jets in Afghanistan.

A generation after Chinese leader Deng Xiaoping made mastering neodymium and 16 other elements known as rare earths a priority, China dominates the market, with far-reaching effects ranging from global trade friction to U.S. job losses and threats to national security.

The U.S. handed its main economic rival power to dictate access to these building blocks of modern weapons by ceding control of prices and supply, according to dozens of interviews with industry executives, congressional leaders and policy experts. China in July reduced rare-earth export quotas for the rest of the year by 72 percent, sending prices up more than sixfold for some elements.

Military officials are only now conducting an inventory of where and how U.S. suppliers use the obscure but essential substances — including those that silence the whoosh of Boeing Co. helicopter blades, direct Raytheon Co. missiles and target guns in General Dynamics Corp. tanks.

“The Pentagon has been incredibly negligent,” said Peter Leitner, who was a senior strategic trade adviser at the Defense Department from 1986 to 2007. “There are plenty of early warning signs that China will use its leverage over these materials as a weapon.”

Posted in Economy, War | Top Of Page

2 Responses to “The U.S. Military Depends on China for the Metals Required to Build Smart Bombs”

  1. dt Says:

    This story verges on the incredible. Based on the description of the War and Peace Studies project in Shoup and Minter’s Imperial Brain Trust, I understood that the whole point of the American Empire, such as it is, was to create a ‘Grand Area’, a large area of the globe which was to be economically self-sufficient and, critically, would not be held to ransom over any specific commodity. America’s World War II experience saw it critically short of the rubber and tin of South East Asia. The whole point, I thought, of U.S. post-war policy was to make sure this could never happen again.

    As always, I take any such story with a small pinch of salt. But I can’t see the angle here on making it up.

    If it is true, it suggests the American foreign policy establishment *really has* lost the plot.

    The sole justification for the global power of the U.S. has been that it created a relatively stable and self-sufficient trading zone for those under its umbrella. If it has failed to do *that*, basically through negligence, it has failed. Utterly.

  2. dt Says:

    Having said all of the above, it occurs to me that the shortage of neodymium can not be that great, as significant quantities of the stuff are required for the huge wind-farm expansion. If the West really faced a strategically critical shortage I don’t see why this would continue, or why, at a pinch, the turbines couldn’t be ‘mined’ for their metals.

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