Are we headed for a rare earths bubble?

GratefulCitizen · 10-07-2010, 18:25

The Japanese will be an interesting test-case for how the USA might deal with such a shortage.
They might develop some economic recycling technology.

http://oilandglory.foreignpolicy.com..._earths_bubble

Quote:

Are we headed for a rare earths bubble?

Jack Lifton suggests we are. The culprit is China's squeeze on the 17 high-tech metals -- a 40 percent drop in exports during the summer, followed by an unannounced boycott of Japan over the last couple of weeks. By Lifton's count, five mining companies seeking to cash in on the shortage are trying to raise $500 million or more in investment. One of them, Australia-based Greenland Minerals and Energy, is seeking a whopping $2.3 billion, while Molycorp., wishing to re-open a mine it purchased several years ago in California, is asking for $500 million.

The companies are responding to a perceived threat to the world's high-tech future, including advanced batteries, wind energy, and numerous electronic products.

The Catch-22, however, is that if all these mines succeed they could swamp the market. The resulting price plunge would satisfy Toyota and Panasonic, big users of neodymium and other rare earths, but that would only be short-term gratification. China would be certain to drop its own prices, and contribute to the great sweating of its mining rivals. At the Wall Street Journal, David Fickling writes that the plans of Molycorp and Australia's Lynas Corp. alone would add the equivalent of 35 percent of China's current production to the market. On top of that, Japan has scavengers poring over the world's scrap electronics to recycle the rare earths contained within, as Hiroko Tabuchi reports at the New York Times.

None of this means that the companies will withdraw their entries. Beiing's recent actions are only in part punitive -- China, itself developing increasing numbers of products that use the rare earths, wants to hang on to more of them -- but the supply shrinkage has awakened the world's other industrial countries to the need for alternative suppliers.

See also:

http://www.nytimes.com/2010/10/05/bu...hiroko_tabuchi

Dozer523 · 10-10-2010, 21:17

Dang, I thought we were going to talk about good 70's music.
Older Bro's might like the photos. Thought I saw Big Teddy in there.

BigJimCalhoun · 10-11-2010, 18:43

There is also a shortage of mining engineers these days. Many students are not taking it up. At 41 years old, I am planning of going back for my masters in mining in January. There appears to be less age discrimination than in my current field of software development.

GratefulCitizen · 10-11-2010, 20:48

Quote:

Originally Posted by BigJimCalhoun

There is also a shortage of mining engineers these days. Many students are not taking it up. At 41 years old, I am planning of going back for my masters in mining in January. There appears to be less age discrimination than in my current field of software development.

There is also a shortage in the field of mineral economics.

Thinking of heading over to Golden?

GratefulCitizen · 10-20-2010, 18:18

For anyone who follows this sort of thing.

In a critical minerals assessment done a few years ago, rhodium was given the most severe rating in terms of supply risk and impact of supply restriction.
http://books.nap.edu/openbook.php?re...12034&page=165

Spot prices fell from over $10,000 per ounce to under $800 per ounce in about six months back in 2008.
http://www.rhodiumspotprice.com/5-ye...rice-chart.htm

Markets are curious things.
The benefit oil embargos had for oil suppliers was questionable.
Can China really benefit from supply restriction of rare earth metals?
Time will tell.

BigJimCalhoun · 10-20-2010, 21:42

Quote:

Originally Posted by GratefulCitizen

There is also a shortage in the field of mineral economics.

Thinking of heading over to Golden?

I was thinking about it but then I found out that they don't have a master's program offered at night. It is close enough (next town over) that I potentially could leave the office for a class or two per week and return, but the program there caters to full-time students and the classes are during the day. One of my co-workers did undergraduate there and has a license to buy dynamite. How cool is that?

If I do do it, it will be Missouri or Univ Az, remotely

ZonieDiver · 10-21-2010, 15:46

Long ago while in college at the U. of Miami, FL - I told a co-worker at my place of summer employment here in AZ that I went to the University of Miami.

He asked, "Is it a school of mines?" (He was thinking Miami, AZ - where they were lucky to have a high school - not FL!)

GratefulCitizen · 10-21-2010, 18:21

Quote:

Originally Posted by BigJimCalhoun

One of my co-workers did undergraduate there and has a license to buy dynamite. How cool is that?

There was a guy from one of the frat houses who put on fireworks displays for E-days during the spring (he used mining explosive for parts of it).
His last year was '91, and he didn't have to worry about getting approval to do it the following year.

1991 E-days was quite a show.
You could feel the shockwaves travelling through your body.

Haven't seen a show like it since.

GratefulCitizen · 10-30-2010, 21:59

Seems the DoD is ahead of the game.

U.S. Defense Department Sees No Rare-Earths Crisis; May Aid U.S. Producers

http://www.bloomberg.com/news/2010-1...producers.html