Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19
Central Banks Move To Keep The Global Markets Party Rolling – Part III - 14th Aug 19
You Have to Buy Bonds Even When Interest Rates Are Low - 14th Aug 19
Gold Near Term Risk is Increasing - 14th Aug 19
Installment Loans vs Personal Bank Loans - 14th Aug 19
ROCHE - RHHBY Life Extension Pharma Stocks Investing - 14th Aug 19
Gold Bulls Must Love the Hong Kong Protests - 14th Aug 19
Gold, Markets and Invasive Species - 14th Aug 19
Cannabis Stocks With Millennial Appeal - 14th Aug 19
August 19 (Crazy Ivan) Stock Market Event Only A Few Days Away - 13th Aug 19
This is the real move in gold and silver… it’s going to be multiyear - 13th Aug 19
Global Central Banks Kick Can Down The Road Again - 13th Aug 19
US Dollar Finally the Achillles Heel - 13th Aug 19
Financial Success Formula Failure - 13th Aug 19
How to Test Your Car Alternator with a Multimeter - 13th Aug 19
London Under Attack! Victoria Embankment Gardens Statues and Monuments - 13th Aug 19
More Stock Market Weakness Ahead - 12th Aug 19
Global Central Banks Move To Keep The Party Rolling Onward - 12th Aug 19
All Eyes On Copper - 12th Aug 19
History of Yield Curve Inversions and Gold - 12th Aug 19
Precious Metals Soar on Falling Yields, Currency Turmoil - 12th Aug 19
Why GraphQL? The Benefits Explained - 12th Aug 19

Market Oracle FREE Newsletter

The No 1 Gold Stock for 2019

Obama: U.S. Energy Future Depends on Rare Earth Metals

Politics / Metals & Mining Mar 19, 2012 - 05:33 AM GMT

By: Money_Morning

Politics

Best Financial Markets Analysis ArticleDon Miller writes: Will a near-monopoly in rare earth metals do for China what oil did for Saudi Arabia?

Not if the U.S. government has anything to say about it.

President Barack Obama made that clear last week when he joined the European Union and the Japanese government in filing a complaint with the World Trade Organization (WTO) about China's manipulation of the global market in rare earth metals.


"We've got to take control of our energy future and we cannot let that energy industry take root in some other country because they were allowed to break the rules," Obama said in a press conference.

It's a clear signal that Obama will do anything to keep China from maintaining a stranglehold on rare earth metals-a set of 17 minerals that are responsible for powering everything from hybrid cars to self-cleaning ovens.

More importantly, the filing is an acknowledgement that the minerals represent a crucial source of renewable energy that are now essential to the way we live.

Rare Earth Metals: Easy to Find, Hard to Mine
Rare earths have been in the headlines a lot recently.

That's because demand for rare earth metals has skyrocketed in the past few years and is likely to grow exponentially in the years ahead.

The pace of technological innovation is accelerating and the world is producing and consuming more high-tech devices than ever before.

After the rare metal Europium was introduced as a source of the color red in TV sets in 1967, their use has expanded to MRI and x-ray machines, DVDs, mobile phones, lasers and many other devices that we use daily.

More recently lanthanum has become a key component of hybrid car batteries, making it critical to Obama's campaign to double the fuel efficiency of the American automobile by 2025.

Crucial as they are, the elements are hardly rare. They are found scattered around the globe in the earth's crust and are as commonplace as copper and lead.

The problem is, they are usually found in small quantities, making them difficult to cost-effectively mine. They also come with severe environmental hazards because they are often found along with radioactive materials or other harmful substances.

China's Near- Monopoly on Rare Earth Metals
As it turns out, China has vast rare-earth deposits, mostly in Inner Mongolia. The government has also heavily subsidized state-owned mining companies and allowed them to operate without strict environmental oversight.

That's made China the biggest producer of rare earths, with a more than 95% share of the global market.

Over the past decade, demand has tripled to 125,000 metric tons a year and could exceed 200,000 tons by 2014, the BBC reported.

Prices for rare earth metals soared in 2010 after China slapped a temporary ban on exports in the middle of a trade dispute with the U.S. and Japan. China later dropped the ban in favor of cutting exports to 93,800 tons per year.

But China isn't just choking off supplies. It's also stoking its domestic mining industry with favorable pricing as a ploy to get Western manufacturers to move factories inside China, according to a study by Bloomberg Government.

The average Chinese export price of neodymium oxide - a key component in computers - was $321 per kilogram in the summer of 2011, 66% higher than the domestic price and a 563% increase compared with the same period in 2010, the study said.

The inflated prices have put Western manufacturers on the hunt for alternatives.

"You are seeing a lot of investment by high-tech firms on research to become less reliant on these materials," Matt Robinson of Moody's Analytics told the BBC.

Miners Expand
Beijing has denied the allegations in the WTO case, saying that it enforces quotas to ensure there's no environmental damage from excessive mining.

The WTO's rules require China to hold talks with the U.S., the EU and Japan within two months. But the WTO cannot impose a solution, setting the stage for a protracted negotiation and perhaps even a trade war.

Meanwhile, mining companies have been watching the developments with an eye towards cashing in.

Australia's Arafura Resources Ltd. (ASX: ARU) is raising $1.05 billion for a rare earth project.

And Colorado-based Molycorp Inc. (NYSE: MCP) has restarted the largest U.S. rare earth mine in California, after it was shuttered in 2002 due to environmental issues.

Commodities expert Peter Krauth says the rare metals dispute is just another example of what's been going on for decades.

"Over the last 160 years, humanity has dug up, refined, processed, and consumed all the easy-to-get minerals. Economically viable supplies of much of the "stuff' we take for granted are being depleted at an exponential rate."

Krauth feels a succession of historic profit opportunities await those who know how to leverage this predicament.

In fact, soon virtually every substance vital to modern life will become enormously expensive and profitable for investors who know how to play it.

As commodities and mining expert Peter Krauth explains in his latest report, "today's scarcity and soaring costs could spur the biggest investment gains in history."

To read Peter's latest free report click here.

Source :http://moneymorning.com/2012/03/19/obama-u-s-energy-future-depends-on-rare-earth-metals/

Money Morning/The Money Map Report

©2012 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules