Oil scarcity leads us to electric cars which leads us to Neodymium scarcity

Peak Neodymium? A recent Reuters article quotes Jack Lifton, an independent commodities consultant and strategic metals expert, as raising an alarm about the use of rare earth materials (like Neodymium) in hybrid and electric cars like the Prius. The article raises the specter of running out of these rare earth materials dooming the possibility of adoption of electric vehicles and other technologies such as high powered wind turbines. It may not be as dire as Mr. Lifton suggests, however.
There is a China angle to this story in that China largely controls the rare earth material industry. There are several deposits of rare earth materials around the world. However a few years ago most shut down due to China undercutting the prices. China mines more than 95 per cent of the world’s rare earth minerals, which mostly come from Inner Mongolia and are a crucial component of numerous technologies. Recently some of the mines outside China began to go back into production. There is an obvious geopolitical danger for any one country (whether or not that country is China) to have tight control over a vital resource.

The Chinese government appears to be planning to tighten export of rare earth materials. Some have seen a draft report titled “Rare Earths Industry Development Plan in 2009-2015″ which would limit exports and completely ban export of dysprosium, terbium, thulium, lutetium and yttrium. Recently the United States and the European U-nion jointly filed a suit with the WTO over China’s restrictions on exports of precious metals, claiming their interests are hurt by the restrictive measures taken by China. On their part China says every country has the right to control the exploitation of its resources, and that’s all they are doing.

Examiner