Rare Earth Elements - A New Challenge for the World Economy

Cristina Bumbac

Revista de Economie Mondiala / The Journal of Global Economics, 2013, vol. 5, issue 1

Abstract: Rare Earth Elements or Rare Earth Metals (REM) are a collection of seventeen chemical elements in the periodic table, namely scandium, yttrium and fifteen lanthanides. The term "rare earth" arises from the rare earth minerals from which they were first isolated. They are uncommon oxide-type minerals (earths) found in Gandolinite extracted from one mine in Sweden. The first discovery was made in 1794, but it was only in 1940 that the scientist Frank Spedding developed an ion exchange procedure for separating and purifying the REM. For the next decades, they were hardly used in some "minor" industrial fields. Only after 2000 their importance grew, once the multitude of possibilities to use them was discovered due to technological progress. Now REM are incorporated into almost all modern technological devices: superconductors, magnets, electronic polishers, refining catalysts hybrid car components and military techniques. They are used in small quantities, but due to their extraordinary properties the prices are very high. The main problem is that China dominates this market, with 97% of total global supply. The highest concentration of rare earth metals are in Inner Mongolia in China, Mountain Pass in California U.S.A. and in Mount Weld in Australia. The developed countries are far behind China regarding production and are indeed depending on Chinese exports. Hence, there is a difficult situation on this particular market, with an uncertain future.

Keywords: rare earth metals; EU policy; U.S.A. policy; China policy; extreme prices (search for similar items in EconPapers)
JEL-codes: F01 F51 F62 F63 F64 L11 L12 L17 L61 (search for similar items in EconPapers)
Date: 2013
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