Welcome back to our two part series on rare earth elements. We hope you found the introduction to the uses and geology of rare earth elements in part I useful. In part two, we’ll talk a bit about the economics and mining of rare earth minerals.

First, a bit of history:

Rare earth metals only became economically important with the advent of modern technologies. Thanks to this fact, these metals were often discarded during 19th century placer mining operations. It’s likely that millions or billions of dollars worth of rare earth metals were allowed to wash downstream from mines.

By the mid 20th century, military, medical, and scientific uses of rare earth elements were proliferating. At this time, most of these elements were mined from placer deposits in India and Brazil. It wasn’t until the mid 1960s that production from hard rock deposits took off. For almost twenty years, global rare earth production was dominated by the Mountain Pass rare earth mine in the deserts of southern California, which has produced over 20 million tonnes of relatively high grade (8.9%) ore.

As production from the Mountain Pass mine declined, the development of several mines in southern China and Inner Mongolia meant a change in the global economics of rare earth elements. Relatively lax environmental regulations combined with increasing global demand and low labour prices, allowed China to quickly dominate the industry.

By 2011, China was responsible for 97% of the global rare earth metals production, although that number has fallen somewhat since then.

In recent years, China has cut back on export quotas to reduce environmental impacts and encourage producers of rare-earth dependant technologies to relocate to China. Every year since 2009, the non-China demand for rare earth elements has exceeded China’s export quotas.

The increase in prices associated with export controls in China has led many companies in the mining industry to consider reopening mines once deemed unprofitable. Steps have already been taken by Molycorp to reopen the once-prolific Mountain Pass Mine in southern California. Some companies are considering reworking decades old mine tailings in an effort to isolate the rare earth elements contained within. There are even plans to exploit the most concentrated source of rare earth elements available today: electronic waste languishing in landfills.

While it isn’t yet clear what the future holds when it comes to rare earth element production and mining, one thing is clear: as consumer electronics and green technology continue to mature, the demand for these elements is only going to increase.

For a more in-depth analysis of the economics and history of rare earth element mining, check out this report.