Below is a report provided by citywire on rare earth. It is used in much equipment in relation to renewable energy. The issue been brought up is the depleting of its source. The usage had gone up to 200 000 MT in a year. China being the biggest producer was trying to monopolize the rare earth by taking over two mines in Australia and in the US but failed to do so. Manufacturer has no choice but to build plant in China to ensure the supply of the rare earth. This is an example competition toward energy. What are we suppose to do? We support the usage of rare earth because rare earth is used in the manufacturing of hand phone. Do we need hand phone? For long we can survive without hand phone. Just think about it.
5 March 2010
Rare earths investment could be the best opportunity out there
Source: Citywire
Rare earth may not sound a sexy investment, but with China controlling 97% of the world's production and threatening to tighten supply, billions is set to be channelled into finding new sources of these crucial chemical elements.
The names of the 17 rare earth components, which include yttrium, europium and dysprosium, may not be familiar but they are vital to many renewable and clean energy technologies, such as wind turbines and catalytic convertors, along with more conventional technologies such as fibre-optics and batteries.
The rapid growth in their usage as the world looks to move away from a reliance on oil has seen demand surge from 40,000 to 125,000 tonnes a year over the last 10 years and it is predicted to reach 200,000 tonnes per year by 2014.
In the 1980s, the US was self-sufficient, but the closure of its Californian Mountain Pass mine following environmental problems and China ramping up production meant that by 1999, some 90% of US industry's supply came from the Far East and this reliance has continued to creep up.
The significance of this near monopoly has not been lost on the Chinese with former leader Deng Xiaoping saying back in 1987: 'The Middle East has oil, but China has rare earth.'
Neither has the irony of trying to move away from a dependence on Opec for oil to an even heavier one on China for rare earth been lost on policymakers.
The situation looks set to get worse, however, after China's Ministry of Industry and Information Technology submitted a six year plan to the State Council to tighten exports and safe-guard its own supply.
The Institute for Energy Research has warned that by doing this: 'Chinese officials are forcing global manufacturers to move factories to China by limiting the availability of rare earths outside China.'
GE moved its battery research plant to China in 2006 and more companies would be expected to follow suit.
Not content with its existing near-monopoly on supply, its state-run Chinese National Offshore Oil Corporation has being trying to buy up mines around the globe to consolidate its position. It has twice failed to buy the Californian mine and has also been rebuffed in its attempts to snap up mines in Australia.
The IEA says that outside of China, only a handful of projects are expected to produce rare earth in the next few years with MolyCorp Minerals looking to develop the Californian Mountain Pass mine and Lynas Corporation developing the Mount Weld mine in Australia.
'As energy prices become more expensive, a lot more is going to be invested in developing rare earth mines,' says Richard Lockwood, manager of the City Natural Resources High Yield Trust. 'It is difficult to imagine any new technologies that will not rely on rare earth down the line and the US government is offering huge amounts to companies that can discover new sources.'
Rare earth is one of the strands of President Obama's green budget for the next fiscal year with huge incentives being offered.
Lockwood has been building up City Natural Resources' exposure to rare earth with Canadian firm Neo Material Tech among his top 10 holdings.
He says that the company is not cheap, but has the potential to deliver outstanding returns as the Chinese tightening of supply will squeeze up prices.
Where there's muck there's brass, as the saying goes and rare earth could up end being one of the top commodity themes over the next few years.
After reading about the above article, China looks to become the main country that monopolize the investment and research on the rare earths components. The article said that, there was increase in the demand surge of the rare earths components from 40000 to 125000 tones a year over the last 10 years plus they assume that there will be rapid increase in demand by the year of 2014, its means that for the next few years, the world will be able to not rely on the Far East for oil supply. Even though the earth’s components very beneficial and vital to renewable and clean technology, but we still in the dark and unfamiliar with the components itself, however we just assume that all the info we get is trustworthy plus I assume the earth rare components is something like the coal. Coal has high amount of carbon in it, thus be able to provide a wide amount of energy but we have to mine it as it is under our ground.
ReplyDeleteIn the article stated that, before this the US is self reliance who have their own mine in producing their own energy, but their mining activity cause a lot of damage to the environment. In the case of China, how can they get their rare earth supply, is it by mining? Or is there other method? We know that mining causing a lot of damage to our environment, plus we have to provide a lot of money and energy on it, thus, is it worth a penny to do it?
From my point of view, China has a very bright future in these rare earths components plus with the help of their government, they try to tighten up the supply and safe the supply to their own. In term of monopolizing these components, they taking steps in pulling the manufacturers which depends on the rare earths components for their technologies from all over the world to China. This may reduce the abilities of other country to compete with them.
Subsequently, there are 2 mines outside China (California and Australia) which able to compete in the rare earths components research and investment, and China has try to buy them but fail in its attempts to owned it. It is a wise step but I think it is too much for them, to buy form the US? Do you think they are dull or stupid in giving away things that is precious to them? If US in desperate situation, perhaps they will give away that.
They, who have the power to monopolize this industry, may have the power to control the prices the supply components. If you understand this concept, you probably understand why President Obama would give away big incentives to who is able to find rare earth components in US which for the renewable energy resources. They would like to quash the China monopoly in this field. Furthermore, the over reliance to the Far East on oil supply add more to the burden of US well focus economic crisis. If a renewable energy could be main issues, perhaps it can be understand, but instead of that, I believe that, all of this particular issue is on the political agenda, which who will be at top of the world instead of finding the way on curing the bad situation on energy matter.