How the Great Rare-Earth Metals Crisis Vanished

China's attempt to control the market for materials essential to the tech industry is turning to dust.

Article by Joseph Sternberg in today's WSJ. Excerpts:

"Export restrictions kicked in three years ago, officially justified by the need to reduce the pollution caused by mining and processing. Global prices rose dramatically, creating an incentive for new miners to start production, and an opportunity for them to profit from circumventing export blocks via endemic smuggling."

"A Pentagon report leaked last month noted that reliance on Chinese rare-earth metals, while still high, is declining. New supplies for most rare-earths are coming online, as uncertainty over China's reliability and a period of higher prices stimulated investment in new mining projects elsewhere. Greenland and Russia both have opened new tracts to rare-earths exploration in the past year. China's share of global production now is down to as low as 80% from 95% in 2010."

"Meanwhile, note an especially piquant detail: Manufacturers are rethinking their dependence on the metals as an input. One suspected goal of China's export restrictions was to force foreign manufacturers to shift more of their high-value-added, high-tech production into China in pursuit of more readily available domestic supplies. 

Instead, foreign high-tech companies increasingly invest in new recycling methods, or products that rely less on rare earths. They have not weaned themselves off the metals by a long shot. But the technology frontier is shifting ever so gradually away from rare earths, and from China."