The mining of Rare Earth Elements (REEs) is a complicated situation dependent upon China. The majority of REEs are currently sourced from mines in Baotou, China. Baotou has had to deal with chronic smog and radioactive point source pollution from its rare earth mines. A tailings pond at the mine was not properly lined and over time, water from the pond allowed thorium to leach into the groundwater and poison both local farms and residents (Greene, 2012).
As China matures and adopts the norms of the international community, I expect mining in the Baotou region to be reduced for the health and welfare of the citizens who live there. Which would boost the cost of consumer goods that use REEs. Also, given their dominant market position, China could choose to use REEs as a means to exert geopolitical hegemony on issues such as the ongoing crisis in North Korea; further boosting prices (Bradsher, 2010).
In the past, China has made it difficult to obtain rare earths through the use of export quotas. They justified their actions by claiming that they were helping the environment. Many observers believe their main motivation was actually an attempt to boost the value of their rare earth reserves. Japan complained about China’s REE pricing to the World Trade Organization. The WTO forced China to lift their mining quotas. China is now considering new mining rules and regulatory uncertainty is causing price fluctuation in the rare earth market (Paul, 2015).
REEs are valuable to China because they are irreplaceable. Rare earths are expensive to mine and would have been replaced by the market if they weren't essential (Hadlington, 2014). In the near future, one of the largest sources of REEs might be our own electronic waste. Rare earth elements are a integral part of LEDs, which are quickly replacing other light bulbs. Analysts predict that by 2020, there will be enough LEDs in circulation that e-waste will be an important source of rare earth elements (Jamasmie, 2017). Ironically, even in this scenario, the largest source of REEs would still be China because they are “largest e-waste dumping site in the world (Watson, 2013).”
References
Bradsher, Keith, “Amid Tension, China Blocks Vital Exports to Japan.” New York Times, 22 SEP 2010, http://www.nytimes.com/2010/09/23/business/global/23rare.html
Greene, Jay “Digging for rare earths: The mines where iPhones are born.” Cnet, 26 SEP 2012, https://www.cnet.com/news/digging-for-rare-earths-the-mines-where-iphones-are-born/
Hadlington, Simon, “Rare element substitution a tricky proposition.” Chemistry World, 06 JAN 2014, https://www.chemistryworld.com/news/rare-element-substitution-a-tricky-proposition/6936.article
Paul, Sonali “China’s rare earths quotas go, possible new moves stoke supply doubts.” Reuters, 07 JAN 2015, http://www.reuters.com/article/china-rareearths-producers-idUSL3N0UL65220150107
Watson, Ivan, “China: The electronic wastebasket of the world.” CNN, 30 MAY 2013, http://www.cnn.com/2013/05/30/world/asia/china-electronic-waste-e-waste/index.html