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Wire & Cable ASIA – March/April 2011
42
From the
americas
Energy
Dependence on sole-supplier China for
rare earths is seen as threatening to
America’s nascent ‘green energy’ industry
“The United States is too reliant on China for minerals crucial
to new clean energy technologies, making the American
economy vulnerable to shortages of materials needed for
a range of green products – from compact fluorescent light
bulbs to electric cars to giant wind turbines.”
Writing from Hong Kong in the
International Herald Tribune
,
Keith Bradsher summarised the warnings contained in the US
Department of Energy Critical Materials Strategy, a detailed
report issued in mid-December. Estimating that it could
take 15 years to break American dependence on Chinese
supplies, the report reflects an emerging view within the
American government that domestic sources of rare earths
– as well as a variety of suppliers – are needed to ensure
the viability of clean energy manufacturing in the United
States. (“US Called Vulnerable to Rare Earth Shortages,”
15
th
December). That said, the report presents what Mr
Bradsher termed “a fairly gloomy assessment” of the ability
of the US to wean itself from Chinese imports of rare earths.
And, over the 15-year emancipation period, supplies of at
least five vital minerals that come almost exclusively from
China will remain vulnerable to interruption.
The fiveminerals aremediumandheavy rare-earth elements of
which China mines an estimated 96% to 99.8% of the world’s
supply: dysprosium, terbium, neodymium, europiumand
yttrium. Beijing has exercised various export controls to
limit and disrupt the minerals’ supply to other countries
while favouring its own manufacturers. Mr Bradsher noted
that China increasingly dominates the manufacture of clean
energy technologies that require such minerals, including the
production of million-dollar wind turbines. David Sandalow,
the assistant secretary of energy for policy and international
affairs who oversaw the Energy Department report, said in a
telephone interview with the
Herald Tribune
that wind turbine
manufacturers are capable of building very large turbines
without rare earths. But, he said, using rare earths could
reduce the per-megaWatt cost of wind energy and improve
its competitiveness through savings on other materials, such
as steel and copper.
Mr Sandalow observed that the United States has been
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❖
putting far fewer resources than China into exploring ways
to use the powerful magnetic and other properties of rare
earths. “There are thousands of rare earth researchers
in China and dozens in the United States,” he told
Mr Bradsher of the
Herald Tribune
. “And that underscores
both the challenge and the opportunity. Their expertise in
this area is significant.”
Elsewhere in energy . . .
Three big utility companies have petitioned the state of
❖
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Idaho, in the Pacific Northwest, to tighten regulations
they claim allow alternative energy producers – especially
wind farms – to circumvent the rules in order to command
higher electricity prices. Idaho Power Co, Avista and
PacifiCorp want the Idaho Public Utilities Commission to
examine the results of permitting big energy developers
to break up their wind projects of 100 megaWatts or more
into separate but closely connected 10mWsites, to qualify
for attractive rates offered to smaller “qualifying facilities”.
A 32-year-old federal law aimed at promoting alternative
energy requires utilities to buy power generated by small-
power producers at a rate set by state regulators. But
the three utilities contend that a proliferation of such
projects by sophisticated companies – some larger than
the utilities themselves – is straining their transmission
systems. A hearing in the matter was set for 27
th
January
to consider the 7
th
December request by the utilities for
a temporary drop in the cap to 100 kiloWatts, down from
10mW, for eligibility for special rates. That would likely
retard development of wind projects while the regulators
review the existing rules. Opponents have expressed
concern that such a slowdown would discourage
investment in renewable energy projects in Idaho.
Telecom
The Apple iPhone makes substantial
inroads into the South Korean
smartphone market
“Samsung and LG, the world’s largest handset makers after
Nokia Oyj, can no longer count on home-field advantage as
they play catch-up in the fastest growing segment of the
$163 billion global industry.” The reference, by Bloomberg
News reporters Jun Yang and Seonjin Cha, was to the
penetration of the
iPhone from Apple Inc, of the US, into
the smartphone market in South Korea in the year since its
introduction there. LG was found to be “reeling” from record
phone losses; while Samsung, to win back customers, has
launched the Nexus S phone equipped with the latest Android
operating system from Google Inc, another California-based
company. (“Apple Displaces Samsung on Home Turf,”
9
th
December). Tracking what one Seoul-based consultant
termed a “very concerning” trend, especially in the case of
LG, Bloomberg noted that Samsung and LG shares both
underperformed the benchmark Kospi Index last year. As
compared with an 18% gain for the index, Samsung gained
15% and LG declined 5.8% in 2010. Over the same period,
Apple shares surged 52%, helping the firm to overtake
Microsoft Corp, also of the US, as the world’s most valuable
technology company.
Samsung and LG phones are sold by all three of South
Korea’s wireless carriers. KT Corp, the nation’s sole
distributor of the iPhone, said that about 1.6 million units
were sold since it became available in Korea in November
2009. According to Nomura Holdings Inc analyst Stanley
Yang, as of September, the device commanded 25% of
the South Korean smartphone market. A November report
from Digieco, a research division of KT, observed that the
iPhone created a “mobile big bang” by changing the way
that Koreans live and work. “The iPhone and smartphones in
general are mostly about software content — it’s more of a
cultural product,” Bloomberg was told by Peter Yu, a Seoul-
based analyst at BNP Paribas SA. “When the iPhone was
introduced, the Korean companies were in a state of denial.
They underestimated the potential.”
Dorothy Fabian – Features Editor