Rare-Earth Metals, China's Global Supply Domination

China has nearly 95% percent of the control over rare-earth metals. The term "rare-earth" metals can be deceiving since the metals really aren't that rare but are, in fact, very valuable and currently exist in abundance. These metals are comprised of about 17 chemical elements that are responsible for technology. Products such as laser guided weapons, night vision, hybrid-car batteries, jet-engines, magnets, fluorescent lamps, catalyst for oil refineries, and fiber optics are all derivatives of these chemical minerals also referred to as 21st century gold.

Recent surveys estimate that China has 110 million metric tons of rare-earth deposits since mining in the U.S. and elsewhere tapered off several years ago due to environmental concerns. Since a new mine can take a decade to develop, China has now strategically positioned itself to dominate exports of rare-earth metals to other parts of the world. They have announced efforts to stockpile these metals, under the direction of the Ministry of Land and Resources, to over 100,000 metric tons. Authorities further estimate that at least 10 storage facilities are being built and managed by Baotou Steel Rare-Earth (Group) Hi-Tech Co. Although China states that its rare-earth supply only accounts for a third of the global supply, its efforts to aggressively mine and store these deposits may quicken depletion.

China's trend of aggressively stockpiling rare-earth metals may have an aggravating affect on foreign capital by raising the costs for companies in a multiplicity of industries to include cell phone manufacturing, military weapons and components, oil refineries, and high technology batteries. Select countries are issuing complaints to the World Trade Organization to challenge Beijing's quota. The Japanese and South Korean governments have also amassed some reserves and U.S. analysts are urging for a similar response to China's domination in this market.

Chemical processing of these metals at the Mountain Pass mine in California was stopped in 2002 after a series of waste-water leaks. There are significant environmental concerns over the mining and extractions of these mineral deposits of rare-earth metals. Successive efforts are underway in finding alternative substitutes for rare-earth metals. Processing raw ore into rare earths is an intensive operation that has been associated with radioactive water spills and also contributes to nuclear waste.

China has decided to limit exports of these minerals to roughly 30% in 2011. Fears of a U.S. military shortage may lead to a re-occurrence of mining in the U.S. in an effort to ease industry concerns. The best verified sources of the minerals in the U.S. are Wyoming's Bear Lodge Mountains and Mountain Pass in southeastern California.