Imagine a world without cell phones, computers, rechargeable batteries, telecommunications. televisions and DVD players.
We'd have that world without "rare earth elements" (REEs). The Western world was once self-sufficient in REEs, but now China produces 97 percent of the world's supply, and it is estimated that by 2014-15 they will cease exporting them to meet their own demand.
REEs have unique magnetic, metallurgical and chemical properties that cannot be duplicated by other materials.
And they are called rare because there are only a few known spots in the world where the concentration is high enough to make mining worthwhile.
They are elements, so they cannot be synthetically created, and they have such exotic names as tantalum, europium, yttrium and erbium.
Europium is the element for generating the colour on television and computer screens and tantalum is a critical component of iPods and computer camera lenses. Without erbium we wouldn't have broadband telecommunications.
Cell phones, BlackBerries and hybrid vehicles would not be possible if not for the permanent magnets produced with alloys composed of neodymium and other REEs.
It all means that -- regardless of all the wailing and pontificating -- China, which is already financing a large portion of the Western world's debt, will also continue to be our primary source for the myriad of electronic instruments, gadgets and tools that we all have become accustomed to using.
[Here] is an interesting article on China's stranglehold on rare earth.
I have taken positions in Lynas Corporation (LYC) which is the premier Australian REE facility at Mount Weld In Western Australia which plans to ramp up to 19,000 metric tons of rare earth oxides by the end of 2011; China Yunnan Copper Australia (CYU) which has just made a large rare earth discovery at Mt Dorothy, 50km east of Mount Isa, in Northwest Queensland; and Gold Search (GSE) which is a joint venture partner in China Yunnan's discovery.
