Primary rare earths include bastnasite (China and the US have the largest deposits) and monazite (found in many Asian countries such as China, India, Malaysia, Sri Lanka, and Thailand). Rare earths are used in the production of a host of electronic products, ranging from mobile phones and televisions, to wind turbines and missiles.
China maintains a stranglehold over the market for rare earths, accounting for 94% (120,000 tonnes) of the world’s estimated production in 2010. It also sits on roughly 36 million tonnes of reserves, estimated at between 30%-40% of the world reserves (99m tonnes). A combination of increasing demand from a growing Asian consumer market, China’s increasing domestic demand, and sporadic tensions with Japan and other nations, have caused China to further limit the quota set on exports of rare earth, thus driving up prices. This caused a global outcry, notably from import giants, USA and Japan. China offered reassurances and Zhu Hongren, a spokesman for China's Ministry of Industry and Information Technology, declared: "China will not use rare earths as a bargaining tool.”
However, the first round of export quotas for 2011 saw a 35% reduction in permits. China says total permits for the year should not be forecast solely based on the initial levels. Stock prices for several non-Chinese mining companies immediately soared. Molycorp Inc, which holds a significant chunk of rare earth deposits, saw its stock rocket upwards by US$7.11 (or 14.3%) to US$57.01 as of 4 January 2011.
Import giant Japan has looked into ‘urban mining’ to help fuel some of its demand for rare earth, which includes recycling these valuable metals and minerals from the vast stockpiles of used and discarded electronics. The National Institute for Materials Science (a government-affiliated research group), stated that used electronics in Japan hold an estimated 300,000 tons of rare earths. Japan has turned to Vietnam too for supplies.
To minimalise overseas dependence, several countries are seeking to turn to domestic rare earth mining (a long process with a gestation of a few years). This is feasible. Rare earths are not ‘rare’ per se, and are actually quite abundant globally. – KV