China's Metals and U.S. Energy Dependence
To the extent that these studies alert potential investors and customers of an upcoming shortage, they serve a good purpose ["America's New Energy Dependency: China's Metals," usnews.com]. The markets are always looking for good investments, and customers of rare earth who don't plan for alternative sources of supply will deservedly be hurt if a shortage occurs. The government can certainly promote investment in research at the university level. But otherwise the notion that the government can plan resource development better than private industry is refuted by the example given. The United States has a much higher standard of living than China precisely because we rely more on the free market than government planning. In fact, a large part of our current troubles are because the government promoted housing and cheap mortgages too much on the theory that that was "good" for us. Any time you favor one special interest group, you hurt the economy at large. The best way for the government to help the rare earth industry is to foster rational tax and environmental policies, not to tell them where and how much to invest.
Comment by James Fox of PA
The fact is, in our political economic system, time and money are pretty interchangeable. If rare earth becomes valuable enough, political pressure will overcome regulatory issues, and sufficient resources will be brought to bear to very quickly open up mines. If rare earth is only marginally valuable, it'll take near forever to reopen a mine.
Comment by Steve Wang of PA
Having abundant and inexpensive alternatives to everything that is scarce is the only real long-term solution when discussing competitiveness in the global economy, because then, no one state actor on the global stage can hog and control scarce resources. Finding inexpensive and efficient alternatives to a number of now scarce resources requires innovative research. I wonder how much more money could be poured into R & D (research and development) related tasks if we weren't using some of it to prop up failed auto companies and irresponsible bankers. We need a permanent bailout from desperation for scarce resources. It's both a common sense and national security issue.
Comment by Angie Koutrotsios of IL
Thank you for having the foresight to write about a looming crisis that the average American is not yet aware of. After reading your article I began researching the rare earth topic. What I found by Googling "rare earth shortages" amazed me. There have been other articles written in various newspapers about this problem (especially in the past six months) but never in a mainstream U.S. news magazine. Even while we are celebrating our nation's Fourth of July weekend, China is making headlines buying foreign natural resource companies (Teck Resources of Canada). I hope this article attracts attention to this potentially severe supply imbalance and shortage.
Comment by Susan Glatstein of NY
It normally takes seven to 10 years to restart a mine, often longer. Feasibility studies, financing, permitting, EPA, environmental impact, equipment construction, approved safety plan, mine infrastructure, skilled labor sourcing, and negotiated agreements, plus about a dozen other items. The rare earth metal shortages could become acute before any mines are back online. There are some compelling rare earth investments out there.
Comment by Tom Hartel of IL
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Reader Comments
Re China's dominance of the rare earths
It is perhaps a little known fact that Australian companies control equal amounts of rare earth elements as China.
It is susurprising that American investors haven't been flocking to these Australian companies as they have miminuscule market caps and hold just on half of the world's rare earths commercially viable deposits.
Chinese interests are already moving into position and it seems that Australian investors do not have deep enough pockets to protect them.
These issues, including the compnaies, the resources and world positions are explored at www.AustralianRareEarths.com.
Rare earth metals
While all Americans are waiting for the economy to change.
China has wasted no time in monopolizing rare earth metals.
Wake up America, this is something we cannot allow to happen,
not right under our noses.
There are jobs right there to be had, not to mention that if
we want a cleaner enviroment, we are going to need our own
rare earth metals, or are we going to give that away to China
too.
Rare Earth Dearth
A recent (7/1/09) article in US News by Kent Garber laid out another “inconvenient truth”. The article outlines a scenario that has China holding a monopoly on the critical rare earth elements market. Can we really afford to procrastinate and “once again” demonstrate our ignorance of the strategic and commercial importance of more critical American natural resources? Much of the new technology necessary to start “the green economy” depends on rare earth metals.
Rep. Mike Coffman of Colorado (amendment into the House's defense budget bill – reviewing rare earth concerns) and Sen. Evan Bayh of Indiana (proposed requiring the defense department to evaluate the extent to which the country's weapons are dependent upon rare earth metal supplies) have proposed legislation that would help. Thorium Energy CEO Ed Cowle has been trekking to Washington to talk to congressmen, senators, and agency officials. “Part of their problem, says Cowle, is getting people to realize there is actually a problem”. As Jack Lifton, a longtime metal analyst, says, "The Chinese are depending, as they always do, on the myopia of the American investment community that only sees to the end of its nose."
We need to develop domestic supplies through companies such as Molycorp and Thorium Energy, Inc. before China becomes the sole source. Everyone needs to make sure that their Congressmen understand that we do care.
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