In my daily perusal of news stories I’ve noted a recent trend in misinformation about China’s monopoly on what are called rare earth elements and the danger this represents to the United States. I thought I’d take a quick look at what these elements are, how they are used, and how China’s cutback on shipment of the elements will affect the world. It’s not a particularly exciting story but I found it interesting and I thought some others might as well.
The Wikipedia article is extremely thorough and you should look at it for more details but I’ll try to summarize quickly.
Rare Earth Elements are not rare. They are fairly common although they encompass a wide variety of elements. Seventeen to be exact. Some are much rarer than others and they have many varied uses including with lasers, alloys, superconductors, magnets, and even chemical reducing agents.
The big controversy seems to be that China controls the total world output as almost a monopoly, currently about 90% . This is true but deceiving. China controls about 23% of the proven reserves of the elements although even this is a high figure because China has done far and away the most searching for the elements.
Up until 1980 the United States was the leading producer of these elements and even as late as 1990 China only produced about 27% of the total amount. However, they were undertaking a massive program to mine these elements and soon flooded the market with cheap product. This immediately wiped out all competition and lead to them reaching as high total contribution of about 95%.
A lesson about monopolies is in order here. I’m a Libertarian and I do think capitalism is the best economic strategy but there are anti-trust laws for a reason. Monopolies are dangerous not only to the general public but to nations as well. When one company or nation controls the vast majority of a highly sought after commodity only ill can follow.
Anyway, enough of that talk for now. This is about rare earth elements.
For various reasons China is now reducing its exports of the elements and the last few years have seen ramped-up efforts to resume mining in the United States and other countries for fear of shortages. This is a natural evolution of capitalism and perfectly normal. The thing to keep in mind is that there are actually plenty of these elements available. It is only because of the monopolistic practices of China that they are not being mined in more places, it simply wasn’t profitable. If it becomes profitable then the mines will spring up.
One more quick aside and then I’ll be done. The mining of these elements usually releases something called Thorium which is radioactive and has been blamed for a number of health problems around the mines, particularly in China and other countries that don’t have regulations against pollution. One reason China is reducing output is because of popular unrest over the rise in toxic waste in the water supply from unregulated, illegal operations.
So, I don’t foresee a rare earth element panic because other nations will begin to mine once China reduces output. It might take a few years to ramp up production but there is, in my opinion, no serious danger. Surveys of the seabeds near hydrothermal vents seem to indicate massive reserves are available for eventual exploitation. Health concerns are legitimate but that’s what limited governmental regulations are all about. Keep an eye on the mines and make sure they aren’t dumping Thorium and all should be well.
Thanks for listening to this boring blog. I hope someone finds it interesting!
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