A while ago I was debating with a good friend whether rare earth mining companies were worth investing in. This followed a report suggesting that demand for rare earths is likely to grow rapidly. The report suggests that supply may be insufficient to match this demand thus putting the brakes on electric vehicle and wind turbine production.
Now there's a report in the FT that China, producer of 97% of the world's rare earths last year, is consolidating production and cutting export quotas - the latter presumably in the expectation that the country can move out of low value-added ore extraction and processing and into finished product manufacture.
This rather throws the spotlight on other countries that have deposits but currently little market share because they cannot compete against China's low wage costs and lax pollution controls. There are plenty of reserves elsewhere (US, Canada, the former Soviet Republics, Malaysia, Australia, Greenland) but none of these has a developed supply chain and putting one in place could take years.
What price the UK government becoming the "greenest ever" under these circumstances?
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