Rare Earth Economics

For a couple years now there have been claims by journalists, government officials and others that the United States and other countries face serious problems over the reliance on rare earth metals in electronic devices. At the moment, a large percentage of rare earth production occurs in China essentially because it is convenient, not because rare earth deposits do not exist elsewhere. Only 30 percent of known rare earth metal deposits are in China — but it is easier politically and economically to extract the materials there.

China has attempted to use its current position in rare earth metals to gain leverage over buyers, but apparently to little avail. In fact, China is attempting once again to cut back on production, in a move that will likely fail:

China’s biggest producer of rare earths is suspending production for one month in hopes of boosting slumping prices of the exotic minerals used in mobile phones and other high-tech products.

 

 

In China, prices of some rare earths have fallen sharply since June.

 

The price of neodymium oxide has declined 34 percent to $157 per kilogram, while europium oxide is down 35 percent at $2,904 per kilogram, according to Lynas Corp., an Australian rare earth producer.

As the Associated Press notes, mines outside China have restarted production in the wake of China’s (so far failed) attempts to restrict supply, and thankfully it looks like the “threat” of Chinese dominance of the rare earth market is going to be of the empty variety.

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3 thoughts on “Rare Earth Economics”

  1. Dear purchasing manager,
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