[mrgrieves]

Thanks for that link; the article was solid.

It's the scale of China's monopoly on rare earth metals which scares me. I'm -very- happy that mines are re-opening in other countries, and I hope that they're around long enough that home-grown manufacturers become reliable customers.

But they simply won't have enough mines and production capacity to secure the supply. Molycorp is small enough that China can flood the market with cheap rare-earth metals just long enough to mess up their $753 MM investment in that mine and knock them out of business again. This has happened before:

http://www.ndu.edu/press/chinas-ace-in-the-hole.html "The Mountain Pass rare earth mine in California, owned by Molycorp Minerals, was once the largest rare earth supplier in the world. Through the 1990s, however, China's exports of rare earth elements grew, causing prices worldwide to plunge. This undercut business for Molycorp and other producers around the world, and eventually either drove them out of business or significantly reduced production efforts."

Of course Chinese manufacturing temporarily loses that "access to rare earth metals" advantage if mines ramp up exports again, but if doing so can cripple foreign mining operations it may be strategically worthwhile in the long term.