By Heather Reid | Lone Tree USA
There are 17 elements found on the earth that are considered rare earth elements (REE). Though the term “rare” may lead one to believe that they are not abundantly available, they are actually found all over the planet. The term “rare earth” comes from the fact that when first discovered, only tiny portions of these materials could be isolated from larger quantities of more common elements.
The mining of rare earth minerals was at one time dominated by the United States. The demand for rare earth elements saw its first explosion in the mid-1960s, with the introduction of the color television. Europium was the essential material for producing the color images. The Mountain Pass Mine began producing europium from bastnasite, which contained about 0.1% europium. This effort made the Mountain Pass Mine the largest rare earth producer in the world and placed the United States as the leading producer.
Nowadays, it’s China that has established itself as the world leader in the market. With just six companies in China dominating the industry, they control about 87% of the rare earths market. China announced in January that it was scrapping its decades-long export quota system. In addition, a tariff of 15% to 25% will be removed later this year, probably in May. But don’t think that China is going to just roll over and take whatever the WTO (World Trade Organization) rules dictate. In fact, rumor has it that they are already figuring out how to implement an export licensing fee, which will ultimately give the government more control of the market because it can dictate WHICH Chinese companies can export.
So why should we pay attention when China is in charge of pricing REE’s? Well, how much do you love your cell phone? Or better yet, how much are you willing to pay for that said cell phone? REE’s play an essential role in the manufacturing of some of our most beloved “must have” electronics. An increase in the price of REE’s could send Apple (and many other electronic manufacturers) prices through the roof. Global demand is expected to only rise for automobiles, consumer electronics, energy-efficient lighting, magnets, rechargeable batteries, and catalysts. Rare earth elements are heavily used in all of these industries, so the demand for them should remain high.
Did you know?
- An estimated 1 kg of rare earth elements can be found inside a typical hybrid automobile.
- Holmium has the highest magnetic strength of any element and is used to create extremely powerful magnets. This application can reduce the weight of many motors.
- The rare earth element europium is being used as a way to identify legitimate bills for the Euro bill supply and limit ability to counterfeit.
- Rare earth metals are key ingredients for making the very hard alloys used in armored vehicles and projectiles that shatter upon impact.
It will be interesting to say the least to see what happens over the next few quarters with REE’s. While still years behind, Australian and Alaskan mining efforts could prove to make considerable headway for some junior rare earth mining companies to take back some of that 87% choke hold China has on the market.