The first interesting thing to note about Rare Earths is that they aren’t all that rare. Out of the 17 elements considered rare earths, only Promethium is really rare (it’s radioactive and has a half life of 17.7 years at the best). The reason they are termed rare is that for the most part they don’t occur in large concentrations. Mineral deposits with enough of a concentration to make extracting rare earths economically feasible are somewhat scarce.
Currently, rare earths are used in all sort of things. These include cell phones and catalytic converters.
The second interesting thing you will often see (often with hints of conspiracy) is that the Chinese control 97% of the worlds supply. Oh my Eleventy! 111! A more accurate statement is that China currently produces 97% of the worlds supply. There are a couple of reasons for this.
Until about 20 years ago demand for rare earth elements was much lower (and increasing at a lower rate) than it is today. So, someone sitting back 20 years ago might have forecast that demand (and thus) price for rare earths wasn’t going to change much in relative terms and so developing new mines wasn’t that much of an economic priority. In the US, the largest mine was the Mountain Pass rare earth mine
. Through a combination of mismanagement (lots of environmental leaks) and misjudging of prices, this mine went inactive between 1998 and 2002. Chinese production had increased at that point and demand hadn’t quite caught up. So, for a while people were mostly happy to let the Chinese mine and produce the rare earth elements in China with cheaper labor and shall we say less than strict environmental regulations.
Here’s a nice supply and demand chart:
Since about 2009, a couple of things have happened to change this whole picture. For various reasons, on September 1, 2009, China announced plans to reduce its export quota to 35,000 tons per year in 2010-2015. Looking at the chart, on the left, you can see that the demand outside of China is greater than 35,000 tons per year. What happens when demand is greater than supply? That’s right, the price pretty much has gone vertical.
Now, the nice thing about the price increasing from a supply point of view is that now there is incentive to either open new mines or reopen old ones. For example, the Mountain Pass mine that we mentioned earlier is expected to resume operation this year.
That all seems fine, supply and demand working as they should. So, is there a potential for running out of rare earths anytime in the near future? An excellent report from the USGS is available here that describes US and global known reserves of rare earth elements. The report concludes that global reserves are at about 99 million metric tons with the United States having 13 million metric tons of rare earth elements. From the above chart, current usage is about 250000 metric tons. This is steadily increasing, but reserves look like they should last for quite a while. This is especially true in that many of the uses of rare earths could be recyled.