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Comment by Animats | Hacker News Reader

A few years ago, the Chinese producers increased the price of rare earths. Then the Mountain Pass, California was taken over by Molycorp, and a new process developed that didn't pollute much. (Even the Sierra Club approved.) Then an Australia mining firm got into the business, and companies using rare-earth magnets figured out ways to use fewer rare earths. The price of rare earths crashed, there was a rare earth glut, and Molycorp went bankrupt.

The Mountain Pass, California mine is still shut down. A Chinese company is trying to buy the assets cheaply. The current question is whether the US Government will permit this.

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A couple of years back, when rare earth prices were high and China restricted exports, the media was full of scaremongering stories about how we gonna see our industry shut down, etc.

Turns out that prices are a strong signal to start mining. While rare earth sound like a scarce resources, they are essentially prevalent across the globe in very low concentration. The existing mines are usually places where the concentration is a tad higher. But once prices are high enough, a lot of marginal deposits all over sudden become commercially viable.

Same thing going on with oil really.

And i think that was the original intent of the "peak oil" term. Not that we had found everything we could in absolute terms, but that the ROI on extraction had hit a plateau (or something of that nature).

We hit peak oil later than planned because the rate of oil-consumption growth plummeted. The estimates were within an order of magnitude (which is a small margin of error you double your consumption every 20 years).

The problem is that the China price is politically motivated. It was cranked up to move motor production to China; exports of the raw material were restricted while motor exports were not. When that backfired, the price was dropped to maintain China's control of rare earth production.

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