While smelting companies in the West are reluctant to make substantial investments needed to obtain important minerals, which use processes that are labor and energy intensive, China, with a cheap labor force and lax environmental laws, can extract the materials at a cost that Western nations cannot meet.

Western Nations at China's Mercy

An example of what Western nations are facing, Speigel Online describes the situation faced by Ulrich Grillo in Germany. His company runs a zinc and sulfur processing company in the western city of Duisburg. He is also the head of the commodities policy committee of the Federation of German Industries (BDI). According to Grillo, German companies are becoming increasingly dependent upon Chinese sources of raw materials and his put them at the mercy of the Chinese.

What happens if China decides to block access to those metals? There are signs that this may already taking place as China is no longer willing to sell is rare commodities at rock-bottom prices. Already their government planners have begun to impose restrictions on this type of export. It could include not only some rare earth metals, but also important industrial metals such as: