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Not all Rare Earth Metals are Rare. But they are messy.

Rare Strategic Metals

Rare Earth Metals
Although seldom precisely defined or understood, the term ‘rare earth metals’ is nevertheless familiar to many in a casual way.  That’s because they are:

  • not quite as scarce as might be expected when associated with the word ‘rare,’ and
  • commonly used in an increasing array of information technology (IT) and other consumer / industrial products.

Rare earth metals consist of 17 elements found in the center of the periodic table that were once exceptionally difficult and expensive to extract from nature, making them equally difficult to commercially acquire.

Very useful, they can be found in such products as aerospace components, camera lenses, computer monitors, fluorescent lamps, glass, hybrid cars, lasers, magnets, refrigeration units, televisions, vanadium steel, X-ray components, and wind turbines, among numerous other items.

Rare earth metals can be an actual part of the finished product or instrumental to the process of manufacturing them.  Their uses continue to proliferate.

Extracting and Using Rare Earth Metals
One of the major problems using rare earth metals is the high cost of extraction and production.  In addition, the overall environmental impact of either process can be excessive and dangerous. Thus, some nations remain reluctant to excavate their own rare earth reserves and seek them from other countries, primarily China, which produces about 92% of the current international market.

Moreover, relatively few countries have access to rare earth metals in their natural form and, of these, only several of the 17 are available in a pure state.  Part of their rarity is a result of their limited natural availability or the hesitance of nations to access them, because of potentially dire environmental consequences.

In addition, many are more frequently derived as bi-products of producing other metals, complicating their overall acquisition.

However, their importance is growing, since they can be innovatively applied for extremely specialized tasks, either during manufacturing processes or as finished products.

The ‘messiness’ inherent in extraction of rare earth metals is threefold; they:

  • require often specialized mining processes that can be very expensive, while
  • generating significant ecological distress to the surrounding environment, leading to
  • strained diplomatic relations among certain nations (basically much of the West v. China), and the potential of subsequent economic sanctions.

Investing in Rare Earth Metals
The fact is, however, despite these issues, diplomatic repercussions and economic sanctions have thus far been essentially confined to warnings, for the simple reason that rare earth metals are so valuable.  They are used in too many manufacturing processes or as finished products to exclude their exploitation on the largest possible scale.

The fact that many of these products are connected to IT — cell phone components, computer monitors, high-temperature superconductors — medicine — PET Scan detectors, X-ray tubes — or anything connected with aerospace, chemical reducing agents, lasers, or nuclear batteries, strongly suggests a growing market well into the future.  Under these circumstances, investment in rare earth metals is well advised, negative publicity attached to their extraction notwithstanding.

Moreover, the use of these elements in the manufacture of such environmentally green products as automobile hybrids, catalytic converters, and wind turbines at least somewhat diminishes the impact of pollution caused by mining them.  And while China has yet to implement any real reduction in ecologically-challenged extraction processes, these will develop as technologies for rare element mining improve.   Better removal processes and entry of more nations into the marketplace should lower investment costs while increasing competition, diminishing China’s current monopolistic position in the industry.

Revenues and profits should improve for all.  Thus, no one should be dissuaded from investing in rare earth metals.

 

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