Smartphone fear as China holds precious metals key

Tom Bawden
Monday 09 January 2012 01:00 GMT
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The biggest threat to businesses isn't the eurozone crisis or the onset of a new credit crunch – it's the short supply of the precious metals needed to make everything from smartphones to plasma TVs to wind turbines.

The demand for key industrial ingredients is rising so rapidly, as emerging markets prosper and the number of electronic consumer goods available mushrooms, that two-thirds of senior executives at UK manufacturers say securing areliable supply of raw materials is their number one concern.

Tungsten, platinum and cobalt are among the "rare earth" metals in short supply. China has a stranglehold on the 17 such metals, producing about 95 per cent of global supply. In recent months, it has reduced exports of the metals to safeguard them for itself, helping to send prices soaring.

"It came as a surprise to us that concern about raw materials is as high as it is, but in the context of the spiralling costs and tightening supplies fromChina on certain products it does make sense, said Susanne Baker, senior climate and environment policy adviser at the manufacturers' organisation EEF.

"We believe that the Government should introduce a resource strategy to see how best those materials in scarce supply can be re-used," Ms Baker added.

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