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Rare Earth Elements: The World Is Rapidly Running Out And China Has Most Of The Remaining Supply

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Most people have no idea what rare earth elements are, but a wide array of the technologies that we use every single day are dependent on them.  Without rare earth elements, we would have no hybrid car batteries, flat screen televisions, cell phones or iPods.  Without rare earth elements, the entire “green economy” would not be able to function, because almost all emerging green technologies use them.  Not only that, but rare earth elements are used by the U.S. military in radar systems, missile-guidance systems, satellites and aircraft electronics.  Without rare earth elements, the U.S. military (and militaries all over the globe) would not be able to function.  There are 17 key rare earth elements that we rely on every day.  But there is a huge problem.  China owns more than 85 percent of the known global reserves of rare earth elements.  Right now, the rest of the world is absolutely dependent on China’s exports of these metals.  Without these Chinese exports, the western world would quickly run out of these precious resources.  But in just a few years, the rapidly expanding Chinese economy will gobble up the entire domestic production of Chinese rare earth elements.  So what will the rest of the world do at that point?

This is a major problem that you aren’t hearing a lot about in the mainstream news.

But analysts are now predicting that by 2012 this could be a tremendous crisis.

So exactly what are rare earth elements?

Well, rare earth elements are a group of 17 relatively rare chemical elements that you can find on the periodic table.  These rare metals have names you may not be familiar with such as lanthanum, cerium, tantalum, neodymium and europium.  As mentioned above, they are used in products that we use every day such as laptop computers, iPhones, magnets, catalytic converters, night vision goggles and wind turbines.  These metals are not well known, but they are absolutely crucial to our way of life.

So what is going to happen when we start running out of them?

According to The Independent, the move towards “green technology” will cause a dramatic increase in demand for rare earth metals in the years ahead.  In fact, it is being projected that the world will need 200,000 tons of rare earth elements by the year 2014.

But analysts fear that China may drop exports of rare earth elements to exactly zero tons by 2012.

Can anyone else see a problem forming?

Last summer, one leaked report indicated that Chinese authorities were already considering a complete export ban of the most critical of the rare earth elements.

But while we may speculate when the complete ban is coming, the truth is that China has already moved to dramatically cut back exports of the metals.

China recently announced that they have cut export quotas for rare earth elements by 72 percent for the second half of 2010.  The U.S. government reacted quite angrily to this news and warned that this could potentially cause a trade war. 

TechNewsDaily recently quoted W. David Menzie, chief of the international minerals section at the U.S. Geological Survey, regarding the coming shortage of rare earth elements….

“Countries and companies that have or plan to develop industries that need rare earth minerals to make products are concerned about China’s growing consumption, which they fear will eliminate China’s exports of rare earths.”

So what needs to be done?

Well, nations and corporations that use rare earth elements need to start weaning themselves off the supply coming from China.

But there is a huge problem.

That cannot be done overnight.

According to a recent report by the U.S. Government Accountability Office, building an independent U.S. supply chain for rare earth elements could take up to 15 years.

So what in the world will we do until then?

That is a very good question.

The truth is that those running the U.S. government are just not very good at thinking strategically.

The U.S. Government Accountability Office report mentioned above lists Mountain Pass, California as perhaps the largest non-Chinese rare earth deposit in the world. 

But it almost fell into Chinese hands unnoticed.

You see, the mine in Mountain Pass is owned by Unocal, and in 2005 a Chinese bid for Unocal almost succeeded.

Yes, the Chinese were trying to strengthen their monopoly on rare earth elements and it almost worked.

Not that they don’t have the rest of the world in a very difficult situation already.

The truth is that if China cut off the export of all rare earth elements to the rest of the world tomorrow, it would throw the global economy into absolute chaos.

That is a lot of power for China to have.

Let’s just hope they don’t use it any time soon.

  • Joe in JT

    Just recycle the stupid crap, what’s the problem.
    Throwing out an old (1year) flat screen TV? Recycle it. Need the paladium from a catalytic converter? There’s a thousand of them in the local junk yard.
    Need the rare elements in the Army’s old radar? Recycle it.

    Whoever wrote this article probably throws out his new car when the ashtray gets full.

  • Concerned Reader

    The rate at which the Chineses economy is grwoing and the consumption rates along with it, they are going to need every type of resource imaginable to keep their economy afloat. Everything from rare earth elements, petroleum, fertile soil, drinking water, timber, gold, silver and alltypes of metals, etc. The problem with all of this is that with one billion plus people it is going to suck the planet dry as far as resources go. As their domestic supplies run dry, they will begin to look abroad(and they already are) for resources.

    This is why the Chinese are buying up everything in sight because they know that it will be needed soon. But keep in mind that once their ability to purchase scarce resources diminishes, they will take it all by force by launching an invasion on the world.

  • Pokey McGee

    You’ve got to be kidding me…first it’s oil, then water…now we’re running out of rare earth metals??? I think you guys need to chill out a little bit. Really, for your own personal health. Get your mind off things for a while. Take a vacation to the tropics, have a fling with a hot woman and read some beach books. The stress you must have with researching and writing about these apocalyptic comings must have taken 30 years off your life, so get out there and enjoy yourself a bit. Sheesh.

  • Perhaps the Chinese will use this as a bargaining chip against a U.S. attack on Iran, which will reduce Iranian oil shipments to China.

    It’s going to be fun finding out, when the first Israeli nuclear bunker buster bomb explodes, whether all those Chinese made microchips installed in America’s and Israel’s planes, missiles, carriers and control systems are hardened against EM pulses like China says they are!

  • Rod

    Well..not really.
    As the western world is on the brink of a prolonged economic depression consumer spending will drop to near zero when it goes public and the demand for such consumer products will crash through the floor and so China won’t really have much of a market at all now will they.
    China is buying up every sort of resource they can worldwide as they know the crash is looming and they want as much as they can for themselves when the crash hits to ensure their survival and independence, and fair enough – we’d all do the same or should do !
    When the west goes down so does China’s primary customer market and so they’ll be selling at seriously reduced prices methinks…

  • RedGypsy

    FUBAR = F***ed beyond all recognition.

    Need I say more

  • Save the Republic

    “The U.S. government reacted quite angrily to this news and warned that this could potentially cause a trade war.”

    Hahaha. A trade war with who? Must be with some other country, because all the U.S. has to trade with China is a bunch of IOU’s. Other than that, our country has nothing to trade, because we don’t produce anything to export anymore (McDonalds and Dominoes pizza won’t survive the trip).

  • Joey

    This should be a boom to California,if the liberal base will let them mine it. Otherwise,sounds like we better learn to love sushi!

  • Paul

    And guess who owns a big percentage of the untapped resources in Africa? The Chinese!

  • Spencer

    The world isn’t running out, however china is the worlds major supplier by a land slide. Like all monopolies who decrease supply in order to squeeze higher profits out of the demand, the market will rebalance and other deposits will be found….e.g Canada and Australia….or as necessity is the mother of invention, scientists will find other minerals to do what they need to do.

  • This is typical corporatist strategy: think no further than three fiscal quarters and only bother with the latest accounting trick GAAP has added.

    Just as the wholesale transfer of industrial capacity to China was strategically, umm, stupid, the failure to attain supply independence of rare elements underscores the inherent problem with globalization/free trade.

    We need policies in place to encourage production at home and preferably in a distributed manner. Central banking and ‘free trade’ are tools that enrich a tiny few at the grave expense of virtually all the people.

  • Pangea

    I just wanted to express appreciation for this news source website. It seems the mainstream media is filtered, and rightfully so, because if the herd knew the truth they would stampede. The “real” news is hard to find. Thank you.

  • whoisbiggles

    In the words of Mr T “I pity the fool”

    Check this article out:

    There is a little island in the North Atlantic Ocean called Greenland where a new deposit of mixed rare earths has been located that may contain enough product to supply 25% of the worlds needs for the next 50 years. That is in additional to the known supply quoted in the above attached link.

    I know that China scares you American’s, Trying to gain a monopoly on rare earths is different from what OPEC does how? Or those pesky Hunt boys trying to corner the silver market.

    Trying to tame the capitalist market economy is like holding onto the proverbial tigers tail.

  • Phillip

    Rare that that this article does not includes, a country called Chile, major exporter of this elements, mainly in Antofagasta, where is the dryiest desert on earth.

  • SWEET!

    I can’t wait!

  • You gotta love have China plays this little game called life, eh?

    They are masters of delaying enjoyment…looking to the next day, week, months, year.

    I need to learn me some Mandarin!

  • Seriously

    Running out ? We are the plague on the planet, but we have not consumed it all, yet. People that are living now will not be here when that happens…

  • Seriously

    The way to run up prices is for the media to blast the trumpet of lies, as it always has…famous quote…by Me.

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