The rare earths are a collection of 17 elements in the periodic table: lanthanum, cerium, and erbium, to name a few. These materials play an important and increasing role in electrical and electronic devices, including batteries and magnets (which are used in electric motors and geherators.) Considerable concern has been raised lately about the concentration of rare-earths production in Chinese hands: see for example today’s Business Insider post, which deals with the Chinese government’s push for consolidation of that country’s rare-earths industry into a smaller number of companies. See also this post regarding dependency of key U.S. military systems on rare earths.
I’m interested in discussing rare earths from two standpoints: overall U.S. economic and security policy, and investment opportunities/risks.
One particular factor that needs to be considered is substitutability: while it’s easy to panic about limited or restricted resources, it often turns out to be the case that vital-seeming substances become a lot less vital when human ingenuity creates substitutes (As in the case of synthetic rubber after Japanese capture of most rubber plantations during WWII)…I believe I’ve read about some cases in which rare-earths substitutes have already been developed for certain applications of these materials.
A couple more links:
As always, nothing in this post is intended as investment device. Do your own due diligence, and IMO one should be especially careful in this area as it is precisely the sort of thing that attracts scamsters and bubble-level pricing.
Anyone out there with interest/knowledge in this subject?