Got this little tidbit off of Jim Sinclair's site. Shows you what some companies are willing to do to secure access to the rare earths and where we may be headed accessing scrap to get more.
It seems that this sector, as small as it is, could make a run that puts the internet stocks of the late '90's to shame!
Jim,
I listened to a gentleman yesterday at an informal meeting of local semiconductor and EDA executives who asked us if we knew what Ruthenium was. I spoke up that it was rare earth element. He said, "yes" and asked, "What is it used in?" Nobody answered and he said, "disk drives." It plays a critical role in the platter coating and in the read/write head.
I asked if that was a problem for Seagate because of China’s recently announced desire to restrict export of rare earths to foreign companies. He said no and added, "Seagate is effectively a Chinese company now so they will have access to what they need." Apparently in 2007 the price of Ruthenium spiked, causing heart attacks in a business where component price increases of 1/100 of a cent are scrutinized and a price increase of a penny requires board approval to proceed. I suspect that Seagate must have climbed into bed with the Chinese government to gain a more secure supply of the critical element.
He said Seagate built the most efficient drive manufacturing plant in the world there which can completely assemble a drive without a single person touching any component. That in combination with nearly universal control over critical elements means they will be the technology manufacturing hub whether we like it or not. If we want high tech gizmos it will come from China no matter what. (Will we have to pay in Yuan for them?)
In the future, American supply may not come from the ground but it will come in a box that says, "USED: 25 GB disk drive". I predict the next big government program will be one that "mines" American basements for old computers to gather their precious metals (and rare earth elements in their disk drive platters and armature magnets) via the "CRAP" program – Cash Recovery for Ancient Products!
CIGA Tim D.
