No End in Sight to Rare Earth Dearth

Rare earth element (REE) prices will likely continue upward and China might halt exports altogether, an industry association warned on Thursday.

"The general consensus is that it [pricing] is going to get worse before it gets better," Rare Earth Industry and Technology Association (REITA) Director Keith Delaney said.

Prices have skyrocketed over the past two years as China drastically curbs exports and the rest of the world scrambles to secure REE supply.

Delaney, on a conference call, said that even with new production coming onstream at Molycorp's Mountain Pass mine in California and Lynas' Mount Weld project in Australia, customers might struggle to secure supplies.

"The promise of Lynas and Molycorp gives us some hope, but they've told me they are pretty much sold out for their first phase of production," he said.

REITA is a non-profit company that seeks to promote the rare earths industry in developed countries and has producers and consumers of the elements as its members.

It was a question of when, not if, China stops exporting its rare earths, according to Delaney.

"I'm hoping for a soft landing, that the Chinese gradually ween us off," he said.

He said that the country had warned the world "for years" that it would not be its eternal source of rare earth elements, and that the fact that China has been enforcing export quotas should have been "very predictable."

China has been consolidating its chaotic rare earths industry in a bid to curb illegal exports and reduce harm to the environment. A flood of cheap supply of rare earths out of the country in the 1990s forced mines elsewhere to close, giving rise to China's monopoly on the metals.