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Rare earths row hurts Taiwan firms in China

The China Post news staff -- With Mainland China said to be banning exports of rare earth metals, Taiwan businesses based in Guangdong and Fujian Provinces are already feeling the impact, reported the local Economic Daily yesterday.

The paper cited one Guangdong-based electronics manufacturer, which supplies peripheral products for the iPad and iPod, as an example how certain businesses are hurting from a components shortage.

The unnamed company received orders from European department stores in the lead-up to the Christmas shopping season. The firm however was unable to get parts and components from Japan, which is engaged in a rare earth metal row with China, the paper reported.

When the parts and components finally arrived, the company cobbled up the products and shipped them to Europe by air, to meet the order deadline. In the process, the company had to spend over NT$10 million on the logistics, the paper reported.

"As contract manufacturers, our profit margin is already small," the company said. "When we can finally make some money from Europe due to the economic recovery, our profit got eaten away by increased logistics cost."

The company said its peers in Guangdong and Fujian Provinces, home to many Taiwan-based processors and exporters, are also suffering from a shortage in parts and components, many of which are made with rare earth elements.

Rare earth metals, the 15 lanthanide elements on the Periodic Table as well as scandium and yttrium, are found in many electronic products such as the iPad, iPod, handsets, plasma TVs and navigation devices.

About 97 percent of rare earth metal supplies come from China, which owns half of the 92.61 million tons of the planet's known rare earth metal ores.

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