China's lock on market for rare earth elements: Why it matters

China said Wednesday it will 'continue to provide rare earths to the world,' but it also plans to cut exports. Here's a Q&A on what all the fuss is about.

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What's all the fuss about?

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Graphic: Graphic: China leads world in rare earth elements
(Rich Clabaugh/Staff)

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Four words: single source of supply. It's not a new concern. The issue has been simmering for the past decade. The new wrinkle "is the prospect of an explosion in demand for certain relatively obscure elements for new clean-energy technologies," says Roderick Eggert, a minerals economist at the Colorado School of Mines in Golden.

The Obama administration is pushing development of a new generation of wind turbines, electric or hybrid cars, and electricity-generating solar cells. But so is China, which analysts say is jockeying for position as the world's Wal-Mart for alternative-energy technologies.

Although the US and other countries served as major sources for rare earth minerals for 50 years, China's low labor costs and lax environmental rules allow it to produce both raw and refined minerals at much lower costs than elsewhere.

Undiscovered global deposits are thought to be enough to meet anticipated future demand, according to the USGS. The issue is whether new mines can be on line in time to meet an expected 40,000-ton-per-year shortfall in supply in the next five years.

The situation is not yet a crisis, Dr. Eggert says, but it is cause for concern. Others argue that the situation is more urgent.

Are there viable substitutes for rare earth elements?

They exist for some rare earth elements in some applications. But the wannabes typically don't perform as well, many researchers say.

That leaves several alternatives.

•Establish strategic reserves of the minerals, at least for national security uses. That could help bridge supply interruptions, in the event of mine disasters or if China uses the minerals as political leverage. Japan, for instance, has been laboring for several weeks under a rare-earth-mineral export ban China imposed in the wake of an incident involving a Chinese fishing-boat captain and a Japanese Navy patrol boat. (China denies that the ban was motivated by the incident.)

•Ramp up domestic sources. Bills in Congress would increase efforts to mine rare earth minerals at home, but none has moved out of committee.

•Boost imports from other rare-earth-mineral-exporting nations.

Over the long term, researchers are looking to synthetic substitutes, says Samuel Bader of the materials-science division at the Argonne (Ill.) National Laboratory. Scientists are progressing. Just this year, the American Physical Society awarded its new-materials prize to two researchers for designing and producing a material with unique electronic properties.

To create the material, the scientists described the properties they sought to a program that runs on a supercomputer, and it gave them the design for the material.