
The Rare Earth Conundrum - robg
http://www.freakonomics.com/2011/05/11/the-rare-earth-conundrum/
======
knowtheory
"Ninety-five percent of the world’s output of rare-earth metals today comes
from one country: China."

These are some awesomely alarmist weasel words. Please note, that doesn't say
where 95% of the actual reserves are. Just where stuff is currently produced.
(And the history of that is basically China Walmarting the market, by
undercutting competitors until they folded and now they're jacking up the
price, like the good totalitarian capitalists they've learned to be from
Western resource companies).

Let me quote from wikipedia
([http://en.wikipedia.org/wiki/Rare_earth_element#Geological_d...](http://en.wikipedia.org/wiki/Rare_earth_element#Geological_distribution)
):

As a result of the increased demand and tightening restrictions on exports of
the metals from China, searches for alternative sources in Australia, Brazil,
Canada, South Africa, Greenland, and the United States are ongoing.[20] Mines
in these countries were closed when China undercut world prices in the 1990s,
and it will take a few years to restart production as there are many barriers
to entry.[16]

~~~
checker
I agree, one would assume an economist would have this basic understanding of
supply and demand.

~~~
pasbesoin
There are the regulatory and market aspects. Would you want to make a major
investment in U.S. development, right now? Or elsewhere, with the Chinese
machine as competitors?

There may be plenty of reserves. If other polities/economies can't get their
act together to develop them, you still have a crisis.

These days, the U.S. can't even manage its budget (not without a cr-pload of
manipulative hysterics). I'm not altogether optimistic.

Separately, they are messy projects. I hope we won't be forced into a "race to
the bottom" in terms of ecological impacts.

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mycroftiv
As usual, the Freakonomics brand name stands for an idea that seems sensible
and provocatively contrarian on cursory examination, but fails hold up when
you dig into the facts. There are some issues with the current rare earths
supply, but most commentators believe they are transient and will disappear
now that prices have risen to the point that production makes economic sense.

------
jinushaun
One of the many inconvenient truths about electric cars. We're trading
dependence on oil with dependence of rare earth metals.

~~~
knowtheory
The two do not compare _in the least_.

Dependence on oil has direct costs in extraction, and high potential for
environmental disaster associated with it. Then, on _top_ of that, there are
ongoing costs for physical distribution of fuel, and then after all of that
additional environmental consequences of using the fuel.

Rare earth metals are a component that are extracted from the ground,
manufactured into the structures we need for electric cars, and then put in
the cars until the component wears out.

So, sure, long as we need stuff, you're never going to get rid of dependence
on everything. But lets have a reasonable sense of proportion here.

~~~
po
In other words: it's a good trade.

