Nov 2, 2009

Washington meeting on looming shortages of critical elements for sustainables.

The world faces a critical shortage of strategic defense and sustainable energy industry mineral
"There was a meeting in Washington this week between key players in government and the metals industry to discuss the looming shortages of critical elements that are coming down the road… "Some so-called "technologies of the future" are destined to fail due to lack of critical metals with which to effect buildout. Take the rare earth, neodymium, for example. It's a component of strong permanent magnets -- which are made out of a mixture of neodymium, iron and boron.

"Strong permanent magnets are critical to gaining efficiency in rotating power-generation units like, say, windmills. Y'know... we're going to replace burning fossil fuels with windmills, right? Isn't that the idea? We're going to live in the United States of Windmills, right?

"Except one fact of physics is that without strong permanent magnets, you can't generate nearly as much power with each turn of the large blades. So neodymium -- in the magnets -- is critical to our windmill future. There's NO substitute for neodymium, and believe me, people have tried to figure a way around it.

"We are addicted to rare earths as much as we are addicted to oil," said Byron King, editor of Energy & Scarcity Investors, published by Agora Financial LLC. Yet "none of these elements are famous like gold or silver. None gets shipped in giant ore freighters like iron, aluminum or copper."

"Without these elements, much of the modern economy will just plain shut down," he said.

In fact, China has all but cornered the market. The rare-earths space is like a Monopoly game, in which Beaijing owns Boardwalk, Park Place, and well, pretty much all the properties, while the West owns St. James Place. "China is the Saudi Arabia of rare elements," said Mark Williams, a risk management expert and finance professor at Boston University. And "like oil, rare elements will flow to the highest bidder."

In addition to controlling production of greater than 97% all Rare Earth elements on a world wide basis (including those relied upon by all NdFeB magnet producers outside China), China is also the world's leading consumer of Rare Earth materials on a global basis, currently consuming approximately 60% of production and rising rapidly. Some leading experts project that by 2012, China' s internal consumptionof critical Rare Earth materials will rise to meet or exceed their production(1). Meanwhile, the U.S., which is also a major buyer of rare earths, mined no rare-earth elements last year, USGS said.

Without these metals, they can't build the new generation of hybrid cars.
Without these metals, oil refineries would shut down.
The new compact fluorescent light bulbs? They need these metals. So do flat-panel TVs and computer screens. And computer disk drives.

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