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I have written extensively about technology transfer and I’m going to discuss it again – it’s that important. When it comes to the need to reduce global carbon emissions, we are in danger of assuming that technology transfer will always be one-way-traffic; from the developed nations to the developing. Our region is at the forefront of technological development in many low carbon areas, but we would be wise to examine the source of our vital raw materials. If we’re not careful, there is a real danger our technological advantage will be eroded in the future by an unhealthy dependence on critical imports, ironically from some of our key technology export markets. Hybrid and electric vehicles, as well as some wind turbine technologies, are a case in point. Each Toyota Prius contains around 2kg of magnet, mostly in the drive motor and some wind turbines contain around half a tonne of magnet per MW. The magnets in question are permanent or hard magnets, particularly useful on wind turbines because of their reliability - maintenance of offshore wind turbines can be an expensive business. The Magnetic Materials Group at University of Birmingham represents one of this country’s few remaining centres of expertise in this technology. Powerful permanent magnets are now made using rare-earth metals, mostly mined in China, which unsurprisingly is now the world’s leading manufacturer. It is therefore alarming to hear rumours of a planned crackdown by China of its export quotas for certain of these metals, apparently as part of a strategic move to exert greater control over its natural resources. We should take these rumours seriously. We’ve already seen Russia take a similar approach with its own energy resources, with the emergence of Gazprom as a key player on the European energy stage. Russia has shown itself willing to play the energy card in its dealings with its neighbours and we’re seeing the response to that across Europe as the issue of security of energy supply creeps slowly up the agenda. Why should we believe that China will behave any differently? Indeed, we might expect a consolidation of mining companies across China, with the emergence on the world stage of a new ‘national champion’. Concerns of this kind might lead our clean technology businesses to explore new supply chains for these essential raw materials and uneconomic mines elsewhere in the world may re-open for business. There must be a risk however, that the imposition by China of export restrictions will eventually force our manufacturers to relocate to China. This is bad news for UK jobs and our economic prosperity, turning on its head the notion that our manufacturing future is inevitably a high technology one. For further information please contact: Andrew Whitehead, Partner
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