• Jan 4th 2011 at 11:55AM
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China is expected to announce the formation of a rare earth industry group in May 2011. This organization will reportedly be tasked with guiding the nation's domestic rare earth industry and handling price negotiations with foreign buyers interested in obtaining the precious materials. The proposed China Rare Earth Industry association will include representatives from domestic producers and requires the State Council's approval, but sources close to the matter seem confident that the group will be assembled within a timely manner.

Meanwhile, China slashed its first batch of rare earth export quotas by 11 percent for 2011, setting the limit at 14,446 tons. Since China supplies in excess of 90 percent of the world's rare earth metals, the move to curb exports has caused prices to soar and has led to quite an uproar. Automakers are concerned that a shortage in vital rare earths used to manufacture components for hybrids and electric vehicles will impact production levels. Furthermore, the U.S. is considering filing a World Trade Organization complaint against China for potentially violating international trade laws. With China dominating the industry, this rare earth battle is bound to become more brutal before it possibly gets resolved. Hat tip to David D!

[Source: Shanghai Daily]

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    • 1 Second Ago
      • 4 Years Ago
      we have huge deserts with this metal just sitting there in our own backyard! WTF? cut china off, no more exporting to the USA!! and just to really settle the score, lets take all those imports we have here now and melt them down, that should give us a ample supply of metal to start off. start a new cash for junkers program!
      what a joke, i wish are government had some balls, we have everything we need right here.
      we have an opportunity to lead again, and we are just sitting here with our thumbs in dark places....

      wake up.....
        • 4 Years Ago
        The reason we haven't been taking advantage of our reserves is because they are:

        a) expensive to extract
        b) even more expensive to extract in a non-environmentally ruinous way ( IE huge pits of acid frothing into water supplies, etc )

        Like drilling 8000+ feet into the ocean, it is a last resort to extract the materials we have.
        Even China themselves have admitted that their mining has produced some pretty bad results.

        The solution is to move away from the difficult to obtain rare earths and use other materials. Tesla motors is using an induction motor that uses no rare earths whatsoever. Earmuff style headphones ( rather than the earbuds that are common now ) don't use rare earth magnets. Computer hard drives can be replaced with SSDs, i can go on; but my point is that there are a lot of feasible alternatives to using rare earths, and i suspect we will start seeing a shift of materials soon.

        It's not the end of the world and we don't need to punch more toxic waste filled holes in our continent.
      • 4 Years Ago
      Before anyone fingers out EVs, here's a reminder that ICE use rare earth metals too (catalytic converters).
        • 4 Years Ago
        Yeah, but that is just for a part that those hippie tree-huggers force people to put in there! (Generic extremist rant.)
        • 4 Years Ago
        Not to mention catalysts for refining
      • 4 Years Ago
      An electric boat may not be that far off. Add Solar Panels & more powerful motors & at the very least you might get a Hybrid capable of ocean crossings. Let's not forget that 125 or so years ago we crossed by sail alone.

      • 4 Years Ago
      As has been mentioned REE's are not needed to make electric motors. EV1, ACP, Tesla, BMW MiniE, new RAV4EV, and my car, all use AC induction motors, no REE's. Nissan LEAF uses a synchronous motor that they claim uses no REE's either, others are working on the same thing.
      • 4 Years Ago
      Between Mountain Pass, Bokan Mountain and Lemhi Pass, the US has the ore, the question is whether we have the technology to process it and the common sense to develop it wisely. My bet is that we lurch from independence to dependence to crisis to over-reaction. Where is your money?
        • 4 Years Ago
        Yes, we have the ore...but as you say we don't have the technology (actually we do, but we gave patents to the Japanese so we can't refine our own frigging ore without their permission and cooperation). Pathetic.

        Luckily they need our ore so we can probably come to some agreement, but talk about impotent. How do we get ourselves into these situations???

        • 4 Years Ago
        "How do we get ourselves into these situations?"

        Free Market.

        At the time we could make more money by selling the patents than by processing ore. (I assume, I don't really know the history of those technologies or industries).
      • 4 Years Ago
      Looks like folks now have an incentive to start rare earth mines in the U.S. and elsewhere. Especially as demand for electronics, electric motors, and batteries surge.
        • 4 Years Ago
        Yeah, others do need to start mining for them. I think (perhaps I'm wrong) we've allowed ourselves to become dependent on China because:
        1) They have some good geology for those minerals; and
        2) They have had little regard for environmental and worker-safety issues such that we've bought materials cheaply from them by abusing workers & the environment.
        • 4 Years Ago
        "1) They have some good geology for those minerals; and
        2) They have had little regard for environmental and worker-safety issues such that we've bought materials cheaply from them by abusing workers & the environment.

        Probably more of 2 than 1.
      • 4 Years Ago
      Hear ye! Hear ye! Witness the birth of a new OPEC....

      Indeed. Tax China-imports to the brim(and that means $1.- China-produced radios and pocket-lights from Wall-Mart too!), and start using what America itself has. America got brainiacs enough to circumvent Japanese patents(sold to them, willingly during, yet, another bout of short-sighted greed..do we ever learn as a species???) and fix environmental problems that come with production.

      In other words: start training really good scientists, before all Brainiacs, Nerds, Egg-heads and Geeks are sucked-up by Wall-street in it's lust for greedy, smart kids...

      Think of the jobs it will create, and thing of the long nose and raspberries America can project towards those countries it was dependent on..
        • 4 Years Ago
        Here's another concept.
        I look forward to peak oil, as it will affect the price of shipping things thousands of miles away via boat.

        When Chinese goods cost too much due to the cost of shipping, we can have our freaking economy back.

        By then, we'll be running pretty much all electric anyway.

        God help us if they figure out how to make an electric boat... !
        • 4 Years Ago
        Before 2000, we actually did this. We had a higher import tax for Chinese goods.

        Why we haven't reverted back to this is beyond me.
        Oh wait, it's because we owe them trillions of dollars and they have us by the balls.
        • 4 Years Ago
        Container ships could easily be run on nuclear power. The navy has run hundreds of nuclear vessels for years quite safely.
        This contrasts with using dirty bunker fuel, which in the UK alone is responsible for some tens of thousands of deaths a year.
        It is a shame that Geenpeace can't add up.
        Their stupidity verges on the murderous.
      • 4 Years Ago
      As I've said before, trying to spin this as being especially relevant to electric/hybrid cars is utter nonsense.

      The entire automobile industry will be effected since rare-earth metals are vital to the manufacturing of advanced alloys for bodies, engine parts etc., as well as being present in electronic components.

      By far the largest impact will be on the computer and consumer electronics industry, which dwarfs the automobile industry and especially electric/hybrid car market by orders of magnitude. It's a very transparent move of the Chinese to put pressure on other Asian nations traditionally strong in electronics, especially Japan, in order to gain an avantage for it's own domestic electronics industry.

      This could very well backfire on the Chinese in a few years, it surely shows classical signs of a beginning stock market bubble.
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