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Rare Earth Elements - A New Challenge for the World Economy

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  • Cristina Bumbac

Abstract

Rare Earth Elements or Rare Earth Metals (REM) are a collection of seventeen chemical elements in the periodic table, namely scandium, yttrium and fifteen lanthanides. The term "rare earth" arises from the rare earth minerals from which they were first isolated. They are uncommon oxide-type minerals (earths) found in Gandolinite extracted from one mine in Sweden. The first discovery was made in 1794, but it was only in 1940 that the scientist Frank Spedding developed an ion exchange procedure for separating and purifying the REM. For the next decades, they were hardly used in some "minor" industrial fields. Only after 2000 their importance grew, once the multitude of possibilities to use them was discovered due to technological progress. Now REM are incorporated into almost all modern technological devices: superconductors, magnets, electronic polishers, refining catalysts hybrid car components and military techniques. They are used in small quantities, but due to their extraordinary properties the prices are very high. The main problem is that China dominates this market, with 97% of total global supply. The highest concentration of rare earth metals are in Inner Mongolia in China, Mountain Pass in California U.S.A. and in Mount Weld in Australia. The developed countries are far behind China regarding production and are indeed depending on Chinese exports. Hence, there is a difficult situation on this particular market, with an uncertain future.

Suggested Citation

  • Cristina Bumbac, 2013. "Rare Earth Elements - A New Challenge for the World Economy," Revista de Economie Mondiala / The Journal of Global Economics, Institute for World Economy, Romanian Academy, vol. 5(1), March.
  • Handle: RePEc:iem:journl:v:5:y:2013:i:1:id:2822000008747083
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    File URL: http://iem.ro/rem/index.php/REM/article/view/92/78
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    Keywords

    rare earth metals; EU policy; U.S.A. policy; China policy; extreme prices;

    JEL classification:

    • F01 - International Economics - - General - - - Global Outlook
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • F64 - International Economics - - Economic Impacts of Globalization - - - Environment
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L17 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Open Source Products and Markets
    • L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics

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