- Sep 2, 2008
- 33,178
- 3,055
- 48
I Was a Rare Earths Day Trader - Inside the Rare Earths Bubble - By Jason Miklian | Foreign Policy
Full Article after the jump. A very interesting article that I recommend to anyone who is interested in knowing more about the Rare Earth Metal Saga or Rare Earth Metal market.
So it goes with rare-earth elements, a group of materials used in the manufacture of various high-tech applications and the object of the latest subterranean fad. Since a border dispute between China and Japan pushed rare earths into the headlines last fall, prices for some of the elements have shot up to an incredible 1,000 percent of what they were just three years ago -- and as in Twain's day, there is no shortage of smooth-talking suits who will tell investors this is only the beginning. I should know: For a few months, I was one of the suckers.
Before we get to that, a brief geology lesson: "Rare earths" is the catchall phrase for 17 elements mostly near the bottom end of the periodic table that are essential for cutting-edge optical and magnetic applications in hybrid cars, wind turbines, iPads, mobile phones, and smart missiles, among other things. What rare earths aren't, however, is rare -- in years past, they were mined everywhere from Florida to Indonesia -- or terribly valuable. In 2009, global sales of all raw rare earths combined came to less than $2 billion -- half the market for palladium alone, and 1 percent of the market for gold. These aren't exactly precious gems: Most rare earths are priced by the ton, not the ounce.
China started cornering the rare-earths market in the 1990s not because it was the only one with the stuff in the ground, but because everyone else gave up. Mining rare earths requires some of the most invasive and ecologically destructive open-pit extraction practices in the world, and China's lack of environmental regulations and its cheap labor meant that it could easily undercut even the biggest suppliers. The one active mine in the United States, operated by the company Molycorp in Mountain Pass, California, halted production in 1998 after a radioactive-waste spill and was shuttered four years later.
Full Article after the jump. A very interesting article that I recommend to anyone who is interested in knowing more about the Rare Earth Metal Saga or Rare Earth Metal market.