Mobile phone users may be unaware of the relevance of the global rare earth metals market to their ability to sell their old phones and upgrade to new handsets, but there have been significant recent developments that will have a bearing on the worldwide mobile phone market.
China controls the production of 97% of rare earths and following its decision to severely limit exports, the US has reopened a disused rare earths mine as part of establishing a global supply chain. It has taken a long time for the US Government to recognise the strategic importance of rare earth metals. The global demand for rare earths is projected to reach 205,000 tonnes by 2015, so unless alternative supplies can be secured, a huge gap in supply will open up.
There is speculation on why China has taken action to limit supplies. Some feel it is politically motivated, but others believe China is trying to gain more control on what is a dangerous, dirty and expensive mining process and to try and get more factories established in the country. China is faced with growing internal demand and that will have an effect on the amount of rare earths they will be prepared to export.
Molycorp is the company behind the project to reopen production in the Mojave Desert in the US. Japan has been seriously affected by China’s decision to limit the export of rare earths and, not surprisingly, is investing heavily in the Molycorp project, in return for a guaranteed supply of rare earth metals over the next 7 years.