Why you should care about the rare earth elements shortage
Ever heard of Scandium? Or checked your microwave box for Yttrium? Or asked your doctor if his MRI machine includes Gadolinium? Probably not. But these elements, known as "rare earth metals," are the building blocks of new cutting edge technologies, and they're on pace for a major supply crunch.
From lasers and X-rays to solar panels and batteries, rare earth metals are quietly ubiquitous. Currently, about 97% of the world's supply comes from China, which cornered the market in the 1990s. The country uses its stash to power its own green leadership in wind power than other technologies.
But just as demand for rare earth metals is soaring for both American consumers and the defense industry, China has cut back its exports to the rest of the world to meet its own production needs. Between 2009 and 2010, it reduced exports by 9% as global demand increased, causing rare earth prices to rise 10% in January alone. "There was a lot of gnashing of teeth worldwide," says Keith Delaney, executive director of the Rare Earth Industry and Technology Association.
That's making American manufacturers sweat. Laser-guided weapons rely on rare earth elements to function. Hybrid cars can use up to 25 pounds of these precious metals in advanced electric motors. A single wind turbine uses up to a ton.