Rare earths are vital, and China owns them all

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This is something that hardly registers in the media, but it soon will as China corners the market and may refuse to export them in future.


By Myra P. Saefong (mpicache@marketwatch.com), MarketWatch

TOKYO (MarketWatch) -- Rare earths may not be on most investors' radars, but they are certainly in almost any high-tech item they use -- and in the world of rare earths, China is king.

The U.S. Geological Survey recognizes 17 different rare earths, materials with science-fictionesque names like lanthanum and gadolinium. They are used in everything: glass polishing and ceramics, automotive catalytic converters, computer monitors, lighting, televisions and pharmaceuticals.

'China is the Saudi Arabia of rare elements ... [and] like oil, rare elements will flow to the highest bidder.'

Mark Williams, Boston University
"We are addicted to rare earths as much as we are addicted to oil," said Byron King, editor of Energy & Scarcity Investors, published by Agora Financial LLC. Yet "none of these elements are famous like gold or silver. None gets shipped in giant ore freighters like iron, aluminum or copper."
"Without these elements, much of the modern economy will just plain shut down," he said.

And yet, King said, "the only people who really study these elements are master's- and PhD-level chemists and solid-state physicists ... and national leaders in places like China."

In fact, China has all but cornered the market. The rare-earths space is like a Monopoly game, in which Beijing owns Boardwalk, Park Place, and well, pretty much all the properties, while the West owns St. James Place.

"China is the Saudi Arabia of rare elements," said Mark Williams, a risk management expert and finance professor at Boston University. And "like oil, rare elements will flow to the highest bidder."

China accounts for about 97% of global rare-earth production -- 139,000 metric tons of material in 2008 -- and it also consumes about 60% of the world's rare earths, according to Sean Brodrick, a natural-resources analyst at UncommonWisdomDaily.com.

Meanwhile, the U.S., which is also a major buyer of rare earths, mined no rare-earth elements last year, USGS said.

"China is consuming more of its own rare earths all the time, so it's exporting less," Brodrick said. That fact could pose a significant problem for the world market, given that rare earths are used in so many products and gadgets.

Without these elements, "you can say goodbye to much of modernity," said King. "There will be no more television screens, computer hard drives, fiber-optic cables, digital cameras and most medical imaging devices. You can say farewell to space launches and the satellites ... and the world's system for refining petroleum will break down too."

Rare earths are also critical in the cutting-edge technologies promised to create a new green economy and save the planet from a climate-change apocalypse.

"Really, if there are limited rare-earth supplies in world markets, then there will be a very limited 'green' future," King said. "There will be a limited future, period." The market-leading Prius hybrid, for example, requires 10 to 15 kilograms of lanthanum for the battery, according to William Gamble, president of Emerging Market Strategies in Rhode Island.
The Prius' battery also uses 1 kilogram of neodymium, the key component in the alloy for permanent magnets, he said.

[Minister of Truth]

Invade China?

[Cancel 2018. 3]

Invade China?

i was wondering who was going to say this....i didn't think it would be you though...i was expecting watertroll

[FUCK THE POLICE]

Invade China?

My thoughts exactly.

[Mott the Hoople]

Yumping Yttrium!

[Cancel 2018. 3]

My thoughts exactly.

to late, you were out trolled tonight....

better luck next time!

[Cancel 2018. 3]

Yumping Yttrium!

Lord Yurt will suffice

[Minister of Truth]

i was wondering who was going to say this....i didn't think it would be you though...i was expecting watertroll

Bwahahahaha!!



*Bow*

[Blackwater Lunchbreak]

Wow. I guess that makes china powerful. SHould we cower in fear now?

[Blackwater Lunchbreak]

Chicoms are malicious and spiteful. They are not good global partners. They're too yellow, and mean, and they eat dogs and enslave the innocent.

[evince]

Hmmm maybe recycling these elements may be in order?

[evince]

Green is the future folks

[SmarterthanYou]

invade? impossible. political and national suicide to even consider it.

[Blackwater Lunchbreak]

Green is the future folks

You mean only companies propagating the green lie will get bailouts? And that white nations will be economically devastated by cap and trade while the other nations "catch up"?

You couldn't be more wrong.

All this shit will fail.

[evince]

Recycling those elements will take all the power from China.

Recycling is the answer to keeping ourselves free of other countries lockup on any needed resources.

Funny how some just hate the word.

[Blackwater Lunchbreak]

Recycling those elements will take all the power from China.

Recycling is the answer to keeping ourselves free of other countries lockup on any needed resources.

Funny how some just hate the word.

It's not enough, pie-eyed fool.

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Recycling those elements will take all the power from China.

Recycling is the answer to keeping ourselves free of other countries lockup on any needed resources.

Funny how some just hate the word.


The amount of any rare earth used is too small to make recycling practicable. They tend to be used as doping agents say in fibre optics or for superconductors and super magnets.

[Mott the Hoople]

Hmmm maybe recycling these elements may be in order?
Not really. There called rare earth for a reason. Besides most material applications are semi-conductors, superconductors and exotic ceramic and glass-ceramic applications. Kinda hard to recycle those.

[cancel2 2022]

It's not enough, pie-eyed fool.

Why are so rude all the time? I challenge you to say something nice you might get to like it.

[Minister of Truth]

Just so everyone is made aware, I was JOKING, and I'm sure Tom was waiting for someone to recommend invading China ever since he decided to post this thread.

Desh, on the other hand, was not joking in her posts.

Now you can laugh. :lolup:

[Blackwater Lunchbreak]

Why are so rude all the time? I challenge you to say something nice you might get to like it.

Your mom has a great rack.

Wow. that was nice.

[Minister of Truth]

Your mom has a great rack.

Wow. that was nice.

:yay:

[cancel2 2022]

Just so everyone is made aware, I was JOKING, and I'm sure Tom was waiting for someone to recommend invading China ever since he decided to post this thread.

Desh, on the other hand, was not joking in her posts.

Now you can laugh. :lolup:

I suggest you practice first by invading Chinatown.

[/MSG/]

Hmmm maybe recycling these elements may be in order?

Recycling may not be possible.

[Lowaicue]

I suggest you practice first by invading Chinatown.

Judging by America's recent 'successes' the China cupboard might be too much of a challenge.

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Judging by America's recent 'successes' the China cupboard might be too much of a challenge.

It is not a good situation for the West to be in as China is rapidly getting to the position where they can hold them to ransom. A few sites are under development outside of China, the most significant of which are the Nolans Project in Central Australia, the remote Hoidas Lake (http://en.wikipedia.org/wiki/Hoidas_Lake) project in northern Canada and the Mt. Weld project in Australia.[/URL][URL="http://en.wikipedia.org/wiki/Rare_earth_element#cite_note-15"] (http://en.wikipedia.org/wiki/Rare_earth_element#cite_note-14)

[Minister of Truth]

I suggest you practice first by invading Chinatown.

Yeah, I'll go pay off a few Korean gangs.

[cancel2 2022]

Yeah, I'll go pay off a few Korean gangs.

As long as you don't try to make a Korea out of it.

[cancel2 2022]

Judging by America's recent 'successes' the China cupboard might be too much of a challenge.

You must know that it is not a good situation, the West needs to wake up and source alternative supplies.

[/MSG/]

You must know that it is not a good situation, the West needs to wake up and source alternative supplies.

I'm sure we've been hard at work on it for at least 20 years. And I'm sure once the supply gets low enough, some one will just magically appear with whatever it is we're looking for.

[cancel2 2022]

I'm sure we've been hard at work on it for at least 20 years. And I'm sure once the supply gets low enough, some one will just magically appear with whatever it is we're looking for.

You need to read this article about the coming emergency.

China's stranglehold on rare metals

By Senior Writer Eoin Gleeson (http://www.moneyweek.com/about-us/the-moneyweek-team/eoin-gleeson.aspx) Apr 03, 2009
http://www.moneyweek.com/%7E/media/MoneyWeek/staffpics/Eoin-Gleeson3.ashx?w=80&h=95&bc=white

(http://www.moneyweek.com/investment-advice/chinas-stranglehold-on-rare-metals-42908.aspx#)
China's proposals for a new world currency to replace the dollar have drawn a lot of attention in recent weeks. But the Americans should be more concerned about another development that's largely been ignored. It seems that after 15 years of fighting tooth and claw, China is now the world's dominant supplier of an obscure group of minerals called rare earth metals.

Why should that worry America? Because these metals are vital to US industry. You'll find them in almost every consumer technology staple – from iPods to BlackBerrys and flat-screen televisions. You'll also find them in wind turbines, solar panels and the super-magnets that kickstart car engines. With 90% of the world's rare earth metals now under China's control, it could soon be impossible to produce a wind turbine or electric vehicle without Beijing's blessing. "The world has to wake up and start thinking of this group of elements as the 'technology metals', without which there will be no technology," says metals analyst Jack Lifton.

The Americans will be kicking themselves for letting this happen. Until the mid- 1980s, the US was a major producer of rare earth metals, mining a huge deposit in the Mojave Desert. In fact, about 42% of worldwide reserves of rare earth ores still lie outside China. But with cheap labour and huge funding from Beijing, the Chinese were able to invest heavily in new mines and processing plants during the 1980s, building a formidable network of rare earth metals research and development laboratories that worked to undercut China's rivals.

A devastating price war followed. Soon, producers from America to South Africa found it was no longer economic to keep mining. By the early 2000s, most rare earth producers outside China had gone out of business. Yet China continues to cut off exports, leading to a dramatic shift in the last three years from oversupply to demand shortages. With no significant mining capacity left outside China, some experts fear the country will engineer a supply crunch to suit its own industries. That's sending a wave of panic through industries that rely on these metals. With global demand for rare earths growing at 10% a year, there is an urgent need to find deposits outside China, says Hard Asset Investors' Tom Vulcan. Toyota, which needs lanthanum to produce metal hydride batteries for its hybrid cars, has rushed to secure supplies in Vietnam and Malaysia. Car makers are scouring Europe for scrap. A number of mines in Canada and Australia that were forced out of business during the price wars have reopened (see below).
Few in the industry expect a significant new supply to make it to market. There's hope the Hoidas Lake project in north Canada can supply about 10% of the $1bn in rare earths consumed by the US each year. But any serious threat and China will slash prices and put everyone out of business again, says Leo Lewis in The Times. As China cuts its exports to divert reserves to build domestic solar panels and modernise its army, the price of these non-exchange-traded metals will escalate. China has only allocated 38,000 tons of rare earths for export this year, yet demand from Japan alone is expected to be 40,000 tons this year. It looks as though rare earth metals could join oil as an emerging-market economic weapon.
Rare earth metals: a risky play on the trend

Of all the rare earth metals miners operating outside China, Lynas Corp (ASX:LYC (http://www.google.co.uk/finance?q=ASX%3ALYC)) is closest to production. Mining the Mount Weld project inWestern Australia, the group plans to double production as it moves into the second phase of mining. Lynas is also constructing a plant to process the ore in Malaysia. MountWeld has the world's richest rare earth deposit, with substantial deposits of lanthanum, cerium and neodymium (all crucial to the electronics, green energy and auto industries), which will produce some 1.1 million tonnes of rare earth oxides. That's enough to supply up to 20% of the global market for 30 years, reckons Lynas.The rare earths basket price slid from US$14.12 a kilogram in September to about $10.25 in February. But with Lynas's operating costs at around $5.75 a kilogram, the mine "remains a robust proposition," says the Sydney Morning Herald (http://business.smh.com.au/business/hedge-funds-undermine-lynas-hopes-20090210-83hq.html).

You should be clear that this is a small, risky mining play, so don't invest your pension fund in it.The path to digging up these rare metals has not been smooth – after a disagreement involving a $95m issue of convertible bonds, the group had to stall its $214m mining project in MountWeld.The shares fell from $1.40 to $0.10. But having agreed terms with bondholders this week, they have soared and Lynas is now free to complete its project. As John Kingsdale of Energy Investment Strategies noted before the impasse: "If the situation works out, Lynas shares could be worth many multiples of the current price by year end."

[/MSG/]

You need to read this article about the coming emergency.

China's stranglehold on rare metals

By Senior Writer Eoin Gleeson (http://www.moneyweek.com/about-us/the-moneyweek-team/eoin-gleeson.aspx) Apr 03, 2009
http://www.moneyweek.com/%7E/media/MoneyWeek/staffpics/Eoin-Gleeson3.ashx?w=80&h=95&bc=white

(http://www.moneyweek.com/investment-advice/chinas-stranglehold-on-rare-metals-42908.aspx#)
China's proposals for a new world currency to replace the dollar have drawn a lot of attention in recent weeks. But the Americans should be more concerned about another development that's largely been ignored. It seems that after 15 years of fighting tooth and claw, China is now the world's dominant supplier of an obscure group of minerals called rare earth metals.

Why should that worry America? Because these metals are vital to US industry. You'll find them in almost every consumer technology staple – from iPods to BlackBerrys and flat-screen televisions. You'll also find them in wind turbines, solar panels and the super-magnets that kickstart car engines. With 90% of the world's rare earth metals now under China's control, it could soon be impossible to produce a wind turbine or electric vehicle without Beijing's blessing. "The world has to wake up and start thinking of this group of elements as the 'technology metals', without which there will be no technology," says metals analyst Jack Lifton.

The Americans will be kicking themselves for letting this happen. Until the mid- 1980s, the US was a major producer of rare earth metals, mining a huge deposit in the Mojave Desert. In fact, about 42% of worldwide reserves of rare earth ores still lie outside China. But with cheap labour and huge funding from Beijing, the Chinese were able to invest heavily in new mines and processing plants during the 1980s, building a formidable network of rare earth metals research and development laboratories that worked to undercut China's rivals.

A devastating price war followed. Soon, producers from America to South Africa found it was no longer economic to keep mining. By the early 2000s, most rare earth producers outside China had gone out of business. Yet China continues to cut off exports, leading to a dramatic shift in the last three years from oversupply to demand shortages. With no significant mining capacity left outside China, some experts fear the country will engineer a supply crunch to suit its own industries. That's sending a wave of panic through industries that rely on these metals. With global demand for rare earths growing at 10% a year, there is an urgent need to find deposits outside China, says Hard Asset Investors' Tom Vulcan. Toyota, which needs lanthanum to produce metal hydride batteries for its hybrid cars, has rushed to secure supplies in Vietnam and Malaysia. Car makers are scouring Europe for scrap. A number of mines in Canada and Australia that were forced out of business during the price wars have reopened (see below).
Few in the industry expect a significant new supply to make it to market. There's hope the Hoidas Lake project in north Canada can supply about 10% of the $1bn in rare earths consumed by the US each year. But any serious threat and China will slash prices and put everyone out of business again, says Leo Lewis in The Times. As China cuts its exports to divert reserves to build domestic solar panels and modernise its army, the price of these non-exchange-traded metals will escalate. China has only allocated 38,000 tons of rare earths for export this year, yet demand from Japan alone is expected to be 40,000 tons this year. It looks as though rare earth metals could join oil as an emerging-market economic weapon.
Rare earth metals: a risky play on the trend

Of all the rare earth metals miners operating outside China, Lynas Corp (ASX:LYC (http://www.google.co.uk/finance?q=ASX%3ALYC)) is closest to production. Mining the Mount Weld project inWestern Australia, the group plans to double production as it moves into the second phase of mining. Lynas is also constructing a plant to process the ore in Malaysia. MountWeld has the world's richest rare earth deposit, with substantial deposits of lanthanum, cerium and neodymium (all crucial to the electronics, green energy and auto industries), which will produce some 1.1 million tonnes of rare earth oxides. That's enough to supply up to 20% of the global market for 30 years, reckons Lynas.The rare earths basket price slid from US$14.12 a kilogram in September to about $10.25 in February. But with Lynas's operating costs at around $5.75 a kilogram, the mine "remains a robust proposition," says the Sydney Morning Herald (http://business.smh.com.au/business/hedge-funds-undermine-lynas-hopes-20090210-83hq.html).

You should be clear that this is a small, risky mining play, so don't invest your pension fund in it.The path to digging up these rare metals has not been smooth – after a disagreement involving a $95m issue of convertible bonds, the group had to stall its $214m mining project in MountWeld.The shares fell from $1.40 to $0.10. But having agreed terms with bondholders this week, they have soared and Lynas is now free to complete its project. As John Kingsdale of Energy Investment Strategies noted before the impasse: "If the situation works out, Lynas shares could be worth many multiples of the current price by year end."

Perhaps I have explained myself poorly. By no means do I suggest that we have some well known and publicized effort towards rare earth independence. I only suggest that, like the current oil crisis, our government has (at least at some level) a solution. A good solution? Probably not. But I don't know.

[FUCK THE POLICE]

If they try to hold us ransom we can just make them into a piece of US territory, then we'll get all the rare earth we want.

[Mott the Hoople]

Much ado about nothing. If the Chinese try to strangle the market then they lose their competitive advantage. Then other regions would find it econoically viable to mine and process rare earth metals for profit. So why would the Chinese be stupid enough to undermine (no pun intended) their own position?

[FUCK THE POLICE]

OPEC often strangles the market successfully. And they own a far smaller percentage than 97% of the oil in the world.

[Good Luck]

Perhaps I have explained myself poorly. By no means do I suggest that we have some well known and publicized effort towards rare earth independence. I only suggest that, like the current oil crisis, our government has (at least at some level) a solution. A good solution? Probably not. But I don't know.
OUR government is sitting on a solution? Are you joking, or just really, really high? Try looking back on the "solutions" they came up with the last oil crisis, and the one before that in the 70s. "Government" and "solution to crisis" are mutually exclusive terms.

As was pointed out in the article, however, is the fact that the U.S. does have significant REM mines. It just happens to be cheaper to buy from China than mine it ourselves at current prices. But like oil, there will probably come a time when the price of buying from foreign sources gets high enough it is cheaper to use our own resources, at which time the mines will reopen.

Meanwhile, as long as it is cheaper to buy them from China, keep doing so. For one thing, the metals are used in high tech manufactured goods, and we gave up on manufacturing in the interests of international free trade. (ie: China makes all our stuff anyway.) If/when their mines start running dry, we'll still have ours. All they'll have is a bunch of I.O.U.s that they'll never be able to cash in because they cannot risk crippling the economy of their biggest customer.

[Minister of Truth]

OPEC often strangles the market successfully. And they own a far smaller percentage than 97% of the oil in the world.

Mott PWNED

:1up:

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Mott PWNED

:1up:


China has a virtual monopoly and it will take a decade at least before the West is able to break that, it may well need subsidies to the mining operators in Canada, the US and Australia to achieve it.

[Mott the Hoople]

Mott PWNED

:1up:Really? And when was the last time you were not able to go buy gas at the pumps cause OPEC was strangling the market?

Besides, your comparing apples to oranges. We have the rare earth reserves, we lack processing facilities. If China squeezes to hard, then the profit incentive would be there to create our own processing facilities. China might be able to significantly influence the market but there's a limit which they cross they would undermine their own position. Why would they do that? Again, much ado about nothing.

[evince]

Not really. There called rare earth for a reason. Besides most material applications are semi-conductors, superconductors and exotic ceramic and glass-ceramic applications. Kinda hard to recycle those.

That is the reason you look into how to recycle different elements.

There are many things that were Impossible in the past that we are now capable of doing.

In the search for answers there is always a benifit and it is often not exactly what you expected to find.

[Mott the Hoople]

That is the reason you look into how to recycle different elements.

There are many things that were Impossible in the past that we are now capable of doing.

In the search for answers there is always a benifit and it is often not exactly what you expected to find.
Yes but as is always the case with recycling, it must be cost affective. That's not always the case.

[evince]

how do you make it cost effective without investing time in reseach?

[Don Quixote]

Recycling those elements will take all the power from China.

Recycling is the answer to keeping ourselves free of other countries lockup on any needed resources.

Funny how some just hate the word.

the prius battery needs replacing at approximately 120,000 miles...just out of warranty

[Mott the Hoople]

how do you make it cost effective without investing time in reseach?
That's driven by economic demand. The cost benefit for recycling has to be there or there's no incentive to do such research and even if the economic incentive is there, that's no gaurentee that a viable recycling process can be developed. Look at the problem with recycling tires for example.

[evince]

Which is why corporate investesting often fails us in long term planning and supporting science driven investigations needs to be a priority of any society.

[Minister of Truth]

Really? And when was the last time you were not able to go buy gas at the pumps cause OPEC was strangling the market?

Besides, your comparing apples to oranges. We have the rare earth reserves, we lack processing facilities. If China squeezes to hard, then the profit incentive would be there to create our own processing facilities. China might be able to significantly influence the market but there's a limit which they cross they would undermine their own position. Why would they do that? Again, much ado about nothing.

I'm not comparing apples to oranges, Watermark is. And you're still pwned. OPEC has been able to cause gas lines, and could go further than that.

[Good Luck]

It's a boogie. In order for China to strangle the supply of REMs, they'd have to stop exporting manufactured goods using REMs. There is no way they're going to shut down that sector of their own economy to gain a slight - and temporary - advantage in one type of natural resource.