One of my favorite books is Daniel Yergin’s riveting tale of the major role oil played in the 20th century: The Prize: The Epic Quest for Oil, Money & Power.  It traces the growing reliance on oil for both global commerce and war. Oil not only powered the 20th century economy, it also played a pivotal role in the century’s world events, from Winston Churchill’s decision to shift the Royal Navy from coal to oil in 1911 to the Gulf War.

But the following sentence in the book’s prologue really caught my eye.

“As we look toward the 21st century, it is clear that mastery will certainly come as much from a computer chip as from a barrel of oil.”

But what’s behind the computer chip and technology that forms the backbone for so much that we take for granted in modern life? The answer is rare strategic metals. These natural resources are critical to economic growth and advancement of technology and everyday items like clothes and chemicals. They are also invisibly intertwined with national strategies, geopolitics, wealth and power.

That is why National Geographic titled an article on these metals, “The Secret Ingredients to Everything.”

What exactly are rare strategic metals? Well, they’re not precious metals like gold or platinum nor common metals like copper or lead. Rather, they are obscure rare industrial metals like gallium, hafnium, indium and rhenium that are in all sorts of products, from cell phones to advanced weapons systems, aircraft engines, robots and hybrid batteries. Rare strategic metals are very difficult and time-consuming to extract from common ores. 

The real value of these metals is their unique electrical and magnetic properties, for which there are no substitutes. This allows for miniaturization and much lighter and efficient components.

Over the past few years, China has been the Saudi Arabia of rare earth metals, as the country’s low-cost labor and lax environmental standards allowed it to produce 90 percent of world production of many of these metals. This near monopoly and China’s clumsy embargo on rare earth exports to Japan in 2010 sent rare strategic metal prices up over 70 percent and spurred other countries into action.

The canvas of the rare earth game is global:

• Russia recently announced a joint venture to stockpile $1 billion of rare earths by 2018.

• China is building stockpiles and making investments in private companies in Brazil, Australia and South Africa.

• Japan is investing in India and Mongolia rare metal projects and companies.

• South Korean government has taken a position in Canada’s Frontier Rare Earths Limited.

• The U.S. is increasing its defense stockpiles of these critical materials while Germany is targeting Mongolia and developing a strategic partnership with Kazakhstan.