Chinese Control of Rare Earths Sparks Resource Race

Niobium, a rare earth metal

With exotic-sounding names such as terbium, europium, dysprosium and lutetium, rare earth metals have become invaluable because of their application in modern electronics. Some estimates show that global demand for the minerals may more than double by 2020 from 125,000 metric tons last year. But furthering the scramble to locate and mine rare earth metals is the virtual monopoly China currently has over global supply. Its recent export curbs have raised fears that rare earth will become the world’s new oil — an essential resource whose price is determined by politics as much as demand.

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Rio Tinto CEO Talks Business Strategy

Rio Tinto CEO Tom Albanese

Rising demand for commodities and resource scarcity are increasingly at the center of geopolitical tensions. According to Tom Albanese, CEO of mining giant Rio Tinto, a long-term market perspective and ongoing engagement with stakeholders are critical to business success in this environment. In the first half of a two-part interview with Arabic Knowledge@Wharton, Albanese discusses why Rio Tinto does not take political sides in a country or indulge in bribery for access. Rio Tinto’s business strategy, he explains, is to invest in large, long-life, low-cost operations that are profitable through all economic cycles and provide consistent returns to shareholders.

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