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201204 Rare Earth Elements

201204 Rare Earth Elements

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Published by Richard J Mowat

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Published by: Richard J Mowat on Nov 01, 2012
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12/05/2012

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   P  o   l   i  c  y   B  r   i  e   f
he Canadian Chamber is committed to fosteringa strong, competitive and profitable economic
environment that benets all Canadians. This paper is
one of a series of independent research reports covering
key public policy issues facing Canada today.
We hope this analysis will raise public understanding
and help decision-makers make informed choices. The papers are not designed to recommend specic policy
solutions, but to stimulate public discussion and debate
about the nation’s challenges.
1
U.S. Department of the Interior. “Mineral Commodity Summaries, 2008-2011.”
U.S. Geological Survey
. 2011. India accountsfor the other 2.0 per cent of mine production, Brazil 0.4 per cent and Malaysia 0.3 per cent.
   E  c  o  n  o  m   i  c   P  o   l   i  c  y   S  e  r   i  e  s  –   A  p  r   i   l   2   0   1   2
Canada’s Rare Earth DepositsCan Offer A SubstantialCompetitive Advantage
On March 13, 2012, the United States, the
European Union and Japan led a complaint at
the World Trade Organization (WTO) againstChina over its restrictions on exports of rareearth elements, also referred to as rareearth metals.China controls 97.3 per cent of the world’sproduction of rare earths,
1
leaving importingcountries vulnerable to supply disruptions.Few of us have heard of these metals. Withnames like lanthanum, promethium andpraseodymium, they sound more like city-statesin Ancient Greece. Although often neededin small quantities, these metals are essentialto the production of many technologicallysophisticated products that are important to thedaily lives of consumers. They are also in highdemand by the defence and renewableenergy industries.
Introduction
Economic Policy Series Sponsored by
 
2
The Canadian Chamber of Commerce
Rare earth elements are found in hybrid and
electric cars, uorescent lights, plasma screens,
portable computers, hand-held electronicdevices, wind power generators and optical andmedical devices. Several rare earth elements areessential constituents of automotive pollution
control catalytic converters and petroleum uid
cracking catalysts. Rare earth elements have awide variety of defence applications, some ofwhich are critical to countries’ national security.They are used in precision guided munitions(missiles and smart bombs), lasers, satellite
communications, jet ghter engines and
radar systems.But the story of rare earth elements is far moreinteresting. It is story about a country—in thiscase, China—embracing a strategic culture thatfocuses on “very straightforward, pragmatic,long-term-oriented decision-making that prizesa set of objectives that might be pursued over along period of time.”
2
China’s dominance of therare earths market is not by accident. It is partof a far-sighted government policy going backdecades that envisaged the rare earths as “the
oil of the twenty-rst century.”
3
China’s early recognition of the value of rareearth elements and keen forward-thinkingability enabled the country to change itsresource advantage into a competitiveadvantage. It has built a strong foundationfocused on the study and research anddevelopment of rare earth elements and theirapplication to achieve economic superiority.The United States, once self-reliant in rare earthelements production, is now dependent onimports, with over 90 per cent sourced fromChina.
4
For the United States, an adequate,stable and reliable supply of rare earth metalsis critical for economic well-being, industrialproduction and national security (because of thevarious defence applications). Its competitiveedge in high tech has been threatened asmanufacturers have been shifting operations toChina to gain access to an uninterrupted supplyof low-cost rare earths.Canada is an enviable position. Not only does ithave oil, it has some of the world’s largest rareearth deposits and expertise in processing them.The question remains: Will Canada “developthe kind of strategic culture that allows it topunch at its weight or above its weight?”
5
2
Global Brief Magazine. “On States, Strategy and Strategic States.”
Interview with Fareed Zakaria
. October 19, 2009.
3
The Economist. “The Difference Engine: More precious than Gold.” September 17, 2010.
4
U.S. Department of the Interior. “Mineral Commodity Summaries, 2008-2011.”
U.S. Geological Survey
. 2011. The U.S. sourc-es 91 per cent of rare earth elements from China, three per cent from France, three per cent from Japan, one per cent fromRussia and two percent from other nations.
5
Global Brief Magazine. “On States, Strategy and Strategic States.”
Interview with Fareed Zakaria
. October 19, 2009.
 
3
The Canadian Chamber of Commerce
Despite their name, rare earths are neither rarenor earths. They are moderately abundant inthe earth’s crust. Some are even more abundantthan copper, lead, gold and platinum. However,they occur in relatively low concentrations sothey are not easily exploitable economically.The term
rare earths
refers to a series of 17chemically similar metals, consisting of the15 elements known as the lanthanides, plusyttrium and scandium. They have unique
chemical, magnetic and uorescent properties.
“Perhaps the most important application ofrare earth metals is in the production of theworld’s strongest permanent magnets. Two rareearth elements, neodymium and dysprosium,are used to manufacture magnets which havehigh magnetic strength but lower weight. Thismeans that they are used in electric motors toproduce higher power and torque with muchlower size and weight. These characteristicsmake them very useful in the development ofhybrid and electric vehicles, as well as in theminiaturisation of hard disk drives used inmany electronic devices.”
6
What in the world are rare earth elements?
6
Davies, Simon. “Applications of the Rare Earth Elements.”
Chemistry@suite 101
. January 8, 2010.

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