Not-so-Rare Earths

News reports say that China -- supplier of over 95% of the world's "rare earths" -- is curtailing these exports. Since rare earths are used in devices that have military uses, this got me wondering if China is simply the cheapest producer or if it actually has a lock on geological deposits. Via the Wikipedia, I found detailed information in a USGS report (2010-5220).

Most rare earths are in more abundant supply than gold, platinum, silver or mercury. Indeed, their average concentration in the earth's crust is higher than copper. However rare-earths are more dispersed than copper, so areas with high concentrations -- making mining economical -- are more rare. Still, they have been mined all over the world. "Until 1948, most of the world's rare earths were sourced from placer sand deposits in India and Brazil....Through the 1950s, South Africa took the status as the world's rare earth source. Through the 1960s until the 1980s, the Mountain Pass rare earth mine in California was the leading producer.... China now produces over 97% of the world's rare earth supply, mostly in Inner Mongolia" (wiki)

In the U.S., "identified reserves" (deposits that are economical to mine, based on some assumptions about acceptable costs) amount to 100 years of China's current annual production. The U.S. also has ten times that amount of rare-earth "resources" (potential sources that have been identified, but are not known to be economically viable). Very little exploration of rare-earths has ever been done, with most discoveries being serendipitous (e.g. found while exploring or mining for something else). So, one would expect that there are more unknown sources. In short, there is no shortage of rare-earths over a long-term horizon.

However, there could be a shortage in the short-term. The last rare-earth mine in the U.S. -- in Mountain Pass, California -- shut down in 2002, and the U.S. now imports 100 percent of its demand. Getting a new mine up and running can take over 7 years, with all the environmental clearances required. Even the one mine raised a lot of environmental issues.

With prices of these minerals rising, the company than owns the Mountain Pass mine plans to reopen it. Since they already have the required permits, they will be able to come online in a year or so. In addition, other companies in other countries are considering new mines. So, the market is working: resources are extracted where the costs are the lowest. Then, as demand rises and prices rise other sources come on stream, with resources never being in very short supply.

Clearly, if everyone has planned well, the most serious effects of any curtailment of supply can be handled. I hope our military analyses their supply-chain and is prepared to meet foreseeable disruptions. Yes, my fingers are crossed!