RE Update - "Strip and Boil Baby"

Interesting article from Reuters this morning on rare earths (Link):

As the headline suggests the department of Energy is fronting $30mm for experimentation to come up with an alternative to RE metals. That would be a kick in the head for some of those high-flying stocks that are a bet on the RE mania. My guess is that any breakthrough on this is unlikely to happen anytime soon. At best, the amount of RE metals used in creating individual magnets will become more efficient. That would stretch out existing supplies a bit, but demand for this stuff just keeps rising. Some quotes from the article I thought were interesting :

Bullish

“Access to shrinking and restricted supplies of rare earths could hinder the ability of U.S. manufacturers to compete worldwide”, Energy Secretary, Steven Chu.

DOE: "As demand for these [clean] technologies continues to increase, rare earths are rapidly becoming more expensive due to limited global supply — prices of many have increased 300 to 700 percent in the past year.

"As there is more and more demand [for clean technologies] it therefore makes sense to worry about the future of rare earths." George Hadjipanayis, physicist, University of Delaware.

Neodymium — the basis of 90 percent of permanent magnets used in EV and turbine technologies — will surpass supply in the next ten years, and dysprosium would face a major shortage by 2015 if demand doubles in that time.

Bearish

The United States consumes about 10,000 metric tons of rare earths annually, according to the U.S. Geological Survey.


The United States could offset supply restraints by ramping up mining of the 13 million metric tons of rare earth minerals that are spread across 14 states.


The next generation of wind turbine and electric car parts could be rare earth-free, if the United States succeeds in its push to produce clean technologies without the crucial metallic elements.

Stupid

GE Global Research received $2.25 million in support last year for research.

If there is 13mm tonnes of RE in the USA we really should not have a problem. But the environmental impacts and the Not In My Back Yard problems will stall any effort in all 14 states. I wonder if the next “Drill Baby Drill” will be “Strip (mining) & Boil (in acid) Baby”.