The more I read about this group of seventeen metals, the more it dawns on me that whoever controls the supply of these metals, controls the world. Literally! China controls at least 90% of the source of REM (Rare Earth Metals). To update on what we have discussed in the past please read "The Middle East has oil, China has Rare Earths" and "Supply and Demand (2)", posted in October and September. The more we learn the more obvious it is that we are just scratching the surface as regards the strategic importance of these metals.
1.World demand for REM is around 60,000 tonnes per annum. China is cutting its exports to 23,000 tonnes next year, from 30,000 tonnes this year, while it builds up inventories. Another indication is that while commodity prices are falling, REM prices remain stable.
2.REM have a range of sophisticated uses from missile systems, precision-guided weapons, night vision and radar systems to hybrid cars, batteries, cellphones and wind turbines. I read that sentence over and over to understand the implications of shortages of these metals. They have unique magnetic (GM has moved its whole magnets division to China), optical and other properties crucial for miniaturization, lasers and energy efficiency.
3.Catherine Ngai - National Geographic news: “Smart bombs” that use neodymium-iron-boron magnets to control the direction when dropped from an aircraft, lasers that employ neodymium, yttrium-aluminum-garnet used to determine the range of enemy targets at distances over 22 miles, and neodymium-iron-boron permanent magnets used for sound system components used in psychological warfare are among the many, according to a 2004 USGS paper. These are just a few examples. Wow! Who Knew?
4.Forget about green technologies, for the moment. Bottom line is that these metals are essential for the manufacture of sophisticated weapons systems. It will take the US and the rest of the world at least five to seven years (some estimate as much as fifteen years) to catch up on production and mining, using today as a benchmark. Who knows how much will be needed in the coming years. So if the Pentagon and Department of Energy are outwardly calm, trust me when I say that inwardly, anxiety verging on panic is the name of the game. And no amounts of Lorazapan (an anxiety medication) will be of help.
When you have got an elephant by the hind legs and he is trying to run away, its best to let him run-
Abraham Lincoln
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