The Battle Over Rare Earth Metals

Sigh, yet another article touting the free market and asking for large government subsidies at the same time.<p>It is rather contradictory -- in the beginning it says how rare earth metals are so incredibly valuable and only China has them, and in the end it says well California has a lot of them too but the big mine in California had to shut down because prices were too low. So give us money now.<p>If the metals are really so valuable, and if prices skyrocket, then the mine in California should reopen. It is possible that the Chinese were dumping the stuff below cost in order to close the California mine, but in that case we should address the issue with existing anti dumping legislation and not with subsidies.

Here's a presentation to Congress by Molycorp, the company referenced in the article as the owner of the Californian mine (the largest rare-earth metal mine outside China): <a href="http://www.molycorp.com/pdf/MMCEMARCH09.pdf" rel="nofollow">http://www.molycorp.com/pdf/MMCEMARCH09.pdf</a><p>Two observations from the presentation:<p>a) it is an interesting example of how to lobby for government funding, and<p>b) looking at the hybrid vehicle supply chain figure, it is startling how dependent the future of clean energy is on magnets which are made from rare-earth metals: magnets play a big role conversion of mechanical energy to electrical energy - wind, hydro, wave turbines require magnets, and vice versa (permanent magnet motors for hybrids, electric vehicles etc.)

The article makes note that rare earth metals have a huge application in green energy, and that 95% of the world's rare metals are in China. It's ironic that, of all countries, China would have a monopoly on natural resources that can help reduce pollution. Especially after the recent events at the Copenhagen climate summit. I hope that altruism can prevail over selfishness.

The NYTimes piece linked to in this article is a shorter read, although it focuses on the environmental impact of mining the rare-earth metals :<p><a href="http://www.nytimes.com/2009/12/26/business/global/26rare.html?_r=1&#38;pagewanted=print" rel="nofollow">http://www.nytimes.com/2009/12/26/business/global/26rare.htm...</a>

There are a number of other metals that might not technically be 'rare earth metals' but they fall into the same category. Very strategic and rarely found in mineable deposits. I'm thinking specifically of gallium and indium both of which are used in solar panels. Indium is also an important component in flat panel displays.