Scandium Middleman Is A Rare Guy Selling A Rare Element
RENEE MONTAGNE, HOST:
From time to time, our Planet Money Podcast profiles people with unusual jobs. David Kestenbaum has this story about a man who realized he was the only person in the world with his job. It was a job selling something almost no one wanted.
DAVID KESTENBAUM, BYLINE: In the 1990s, Tim Worstall found himself in Moscow. It was just after the fall of the Soviet Union, a time when things that had been hidden were now out in the open.
TIM WORSTALL: Just, you know, one of the flood of people who went over there just to see if there was any way to make money out of the entire collapse of a civilization.
KESTENBAUM: Maybe video games, he thought. Tetris had been written by a Russian programmer. But then he came across something much more elemental.
WORSTALL: I just bumped into somebody at a party.
KESTENBAUM: The guy said this. I'm having trouble selling my scandium. What's scandium, Tim asked. They drank some vodka, and the guy explained. Scandium was a metal with remarkable properties, one of the so-called rare earths. You can find it on the periodic table, the little box with an SC on it and the number 21.
WORSTALL: It's usually classed as one of the lanthanides, that funny strip of rare earths along the bottom of the periodic table that we all forgot in high school chemistry class. [POST-BROADCAST CORRECTION: In this report, scandium is referred to "as one of the lanthanides." In fact, it is not a lanthanide. But scandium is often grouped with the lanthanides as one of the rare earth elements.]
KESTENBAUM: Add a dash of scandium to other metals; you get something very strong and very light. The guy explained that the Soviet military used to love it. But now no one seemed to want it. So Tim did some research. He tried to. There was almost nothing written about scandium. Eventually, he called the U.S. government, the U.S. Geological Survey.
WORSTALL: And I said, hello, I want to know about scandium. And the man at the other end of the phone line said, well, that's good because I am our scandium expert.
KESTENBAUM: Finally, someone else on the planet who knew about scandium. The man told Tim there were some people who might need scandium. It was used in small amounts in certain high-intensity light bulbs, metal halide bulbs, the kind used to light sports stadiums. Scandium was added to the gas inside the bulb to give the light a nice daylight color. So Tim tracked down a manufacturer in the U.S. and picked up the phone again. You called up, and you said, hey, I have - I'm in Russia, and I have scandium? And...
KESTENBAUM: (Laughter). What did they say?
WORSTALL: Well, that's great. We buy scandium from Russia. What's your price?
KESTENBAUM: Oh, did you have a price?
WORSTALL: Yes, which was significantly lower than what they were already paying for it - and so there we go.
KESTENBAUM: He had it sent over through the regular mail in a powdered form called scandium oxide. Tim was, as far as he could tell, the only person on the planet with this job, a scandium middleman, a rare guy selling a rare element. How was it being a monopolist?
WORSTALL: Not as profitable as people think running a global monopoly will be.
KESTENBAUM: Tim is trained as an economist. And this, he explains, is a classic example of what's called a contestable monopoly, meaning it's easy for someone else to get into the business. So even though you don't have any competitors, the simple fact that it would be easy for someone else to get into the game forces you to keep your fees low.
WORSTALL: I don't live in a mansion. I'm not a multimillionaire. But I've had a lot of fun, done a lot of traveling and made a good living.
KESTENBAUM: Five or six years after his first deal, other scandium middlemen started popping up, people arranging deals for anyone who wanted to buy some. Scandium is now used in some lightweight baseball bats and bicycle frames. Airlines are experimenting with it. But it's expensive, something like $2,000 a pound. The total amount bought and sold in a single year could fit on the back of a truck. David Kestenbaum, NPR News.
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Correction Jan. 21, 2015
In this report, scandium is referred to "as one of the lanthanides." In fact, it is not a lanthanide. But scandium is often grouped with the lanthanides as one of the rare earth elements.