A report by a leading investment website last week hinted at the possibility of imminent price rises for various raw materials, including rare earth metals. According to the report, the EU commission has announced that more funds should be dedicated to rare earth elements research, in particular focussing on recycling and reducing waste of rare earth elements. The announcement was based on the fact that rare earth elements remain difficult to source, with the EU still dependent almost exclusively on China for imports of rare earth elements.
Recycling Rare Earth Elements
Unfortunately, the report points out, the technology for recycling rare earth elements is still largely hypothetical and it will have little impact on the actual mining of rare earth elements for some time to come. Japan has explored the recycling route with even greater urgency and yet its technology companies still rely on imported Chinese rare earth elements.
The EU commissioner has announced steps to improve the supply of rare earth elements. The proposed steps, at least initially, have less to do with finding efficient recycling techniques than they do with simplifying trade legislation to speed up the import process.
China dominates production of rare earth elements
China is still the dominant player in the rare earth elements field, while other countries such as Australia and Canada are experiencing delays developing their own resources. China has taken full advantage of this situation by restricting exports, causing problems for manufacturing industries, notably electronics manufactures in countries such as Japan. Concerns about climate change, and the need to embrace renewable, sustainable energy production methods, such as solar and wind power, have added to th edemand for rare earth elements, since wind turbines and solar panels use rare earth elements as an essential part of their manufacture.
On top of this this, the demand created by technological advances will continue to grow. The Nobel winning economist Paul Krugman predicted an intensifying technological revolution, noting during an interview that the information age has yet to fulfill the full extent of its impact, meaning that technology is just starting to catch up. Inevitably, where rare earth elements are concerned, the conclusion is that more mining and more sources are needed.
The ProEdgeWire report concludes by saying that China’s dominance in the market remains structurally strong enough to cause more market disruption. The long term picture is one of rising prices which will result from the likely revival of economic and industrial activity.