The quest for and supply of rare earth elements(REEs) will continue to heat up and undoubtedly increase the number of resource wars across the globe – especially as the demand for REEs exceed the supply. At the moment, the West is in confrontational mode with China as the PRC produces 97% of rare earth elements. Currently, the PRC is a monopoly producer of rare earths and will stay that way for years and decades to come. In March 2012 the US, EU, and Japan launched an inquiry to the WTO complaining China was a monopoly controlling vast supplies of rare earths. Apparently, China has always been more concerned with the value chain versus the supply chain. Why are REEs (rare earth elements) so important? REMs(Rare Earth Minerals) are the raw materials or natural resources needed to process advanced technological applications. Some of the advanced technological applications emanating from REEs are iPhones, military personnel night goggles, generators for wind turbines, hybrid and electric vehicles, precision-guided missiles.

The future increasing demand for REEs is not the only issue now at play for the West, but China controls all stages of production. For Beijing REMs have resulted in a boom industry because the government got a lock on digging up, processing, and producing REM end products. The primary causal factors is due to China’s world- leading processing facilities, world-leading ability to manufacture and take the product from the ground and put it into an applicable end product. Beijing also sits in a good place because much of the REM materials, in reality, have few robust substitutes and minimal recycling rates as well. Beijing’s slashing of supplies with quotas on REEs exports has put many global hi-tech application dependent markets on both the defensive and offensive. In fact, China only placed a limit on its annual exports of the raw metals and finished products are not counted in this list. China’s current export quota is above 30,000 tones, which is enough to supply most of the world requirements. On the other side of the issues, China is diligently working on developing its market for products using rare earth elements. China owns 55 million metric tons out of 110 million metric tons of REEs global reserves while the US holds only13% reserves. China is also the biggest or among the biggest producers of tungsten, magnesium, molybdenum, vanadium, gallium, silver, tin, cadmium and indium.

Now in walks the BRICS(Brazil, Russia, India, China, and South Africa) economic alliance into the REE monopoly and supply debate. Two BRICS economies, Brazil and India dominated the world’s supply of rare earth elements up until 1950. By then South Africa led as the world’s REE supplier until the mid 1960s when it was replaced by the USA as the REE supplier.

The production concentration of rare earth elements (REEs) outside the United States raises the important issue of supply vulnerability. REEs are used for new energy technologies and national security applications. Rare earths are moderately abundant in the earth’s crust, some even more abundant than copper, lead, gold, and platinum. While more abundant than many other minerals, REEs are not concentrated enough to make them easily exploitable economically. The United States was once self-reliant in domestically produced REEs, but over the past 15 years has become 100% reliant on imports, primarily from China because of lower-cost operations.

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