The rush is on to find deposits of rare earth elements (REEs),critical components of materials used in the defence, electronics andother key industries.
REEs comprise 16 chemical elements uniquelyable to retain their physical properties at high temperatures. China isby far the world's dominant producer but has served notice it plans toconserve supplies for its own use.
"There are absolutely nosubstitutes for the rare metals that are used in (the missile) guidancesystems and hybrid batteries that are used in defence applications,"Quest Uranium Corporation CEO Peter Cashin told CBC News.
REEs areused for everything from nickel metal hydride batteries in hybrid carsto fibre-optic telecom cables, military hardware, solar panels, windturbines, compact fluorescent lighting, mobile phones, computers, themanufacturing of super conductors and high energy magnets and petroleumrefining.
Demand to soar
Demand in the Westfor REEs is set to explode, not only because of China's move but alsoas demand grows for these products. The Industrial Minerals Company ofAustralia has predicted global demand will grow from about 112,000tonnes in 2008 to approximately 180,000 tonnes by 2015, a 60 per centincrease.
"I think [the demand growth prospects are] verypromising," said Glen Jones, Intierra.com's executive directorresponsible for the Western Hemisphere.
Intierra monitors globalexploration and mining on a daily basis and offers online subscriptionsto its detailed data bases to clients like Barrick, Newmont, AngloAmerican, Rio Tinto, Cameco and Standard Bank.
Currently, Chinacontrols between 95 and 97 per cent of world REEs production. But itsannouncement in September, Jones said, "caused a bit of panic" forcustomers outside China, who now question where the supply will comefrom.
That's one reason why Toronto-based Quest Uranium's shareprice has soared recently to almost $3 from five cents when it firstlisted on the TSX Venture Exchange in January 2008. Quest is exploringtwo deposits in northeast Quebec near the border with Labrador. The siteis 125 kilometers west of the Voiseys Bay nickel-copper-cobalt depositcurrently being mined by Vale.
REEs aren't actually that rare and,in fact, are as common as nickel or tin. The name refers to the factthey aren't often concentrated in deposits that are profitable todevelop.
Canada is three decades behind China in developing therare earth industry, Jones said, because 30 years ago, China saw thepotential and dramatically increased production.
"This caused asteep decline in commodity price and effectively killed off anycompetition," he explained. "So that's why they've had this monopoly. Ithasn't been economical for anybody else to explore."
That hascreated an exploration rush that could become an opportunity forCanadian mining companies.
"Canada's definitely going to benefit,"predicted Jones.Continued...