Tags: Analysis: China's Corner on Rare Earth Metals

Analysis: China's Corner on Rare Earth Metals

Friday, 15 July 2011 09:29 AM

China has sought to corner the market on rare earth metals, a set of seventeen chemicals critical in the defense, aerospace, electronics, and construction industries. A recent alternative find of rare earth metals within the United States looks promising to break China’s stranglehold on the market.

China produces an estimated 97% of the world’s supply of rare earth metals. Recognizing this, in 1992, former Chinese President Deng Xiaoping stated that, “The Middle East has oil, China has rare earth.” China has been so successful mining these elements by undercutting competition abroad through the use of cheap labor, few government regulations on mines, and a disregard for health risks toward miners. China’s dominance of rare earth metals mining was further bolstered when the only U.S. rare earth metals mine at Mountain Pass, California was shut down in 2002 due to environmental and regulatory problems. The mine is expected to reopen in 2012.

The United States currently relies on imports from China and Brazil for rare earth metals, importing between 8,000 to 10,000 tons per year. More than 90% of these imports come from China. A recent find of rare earth metals in Nebraska by Quantum Rare Earth Developments Corporation has the potential to change this. According to the U.S. Geological Survey, “The Elk Creek Carbonatite, located south of Lincoln [Nebraska], has the potential to be one of the largest global resources of niobium and rare-earth elements (REE).” In addition, rumors that China had restricted the sale of rare earth metals to Japan, prompted the United States Congress to pass the Rare Earths and Critical Materials Revitalization Act, which supports the domestic production of strategic materials. The CEO of Quantum, Peter Dickie, has called on President Obama to “counter China's actions and move aggressively to set up a U.S. stockpile of rare earth materials.”


American reliance on Chinese imports is a significant vulnerability for key U.S. industries as well as U.S. national security. Although China will likely remain the largest exporter of rare earth metals to the United States, the domestic find of rare earth metals by Quantum may address this vulnerability. The United States and its allies will continue to develop other sources of rare earth metals to end China’s stranglehold over the supply of these elements.

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Analysis: China's Corner on Rare Earth Metals
Friday, 15 July 2011 09:29 AM
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