China rare earth exports policy and new plant location

A New York Times article (August 24, 2011) describes the impact of China’s policy to limit exports of rare earth metals on new plant location decisions by Showa Denko of Japan and Intematix of the United States. Showa produces alloys made with rare earth metals for hybrid cars. Intematix uses rare earth phospers to made light emiiting diodes.  Both these companies located their end product manufacturing in China to have cheap and reliable access to rare earths – which would cost a lot more if used outside China due to export taxes imposed by China.  Is China’s policy to control exports as a way to force assemblers to locate in China a sustainable supply chain approach ? Will the expected increase in rare earth supplies, as new mines start producing, cause manufacturers to move out of China as soon as supplies ease ? Given worries about intellectual property in China, will manufacturers be better off focusing on decreasing the use of rare earths and recycling ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues, Sustainability and tagged , , , , , , . Bookmark the permalink.

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