Historic Rare Earth Discovery

Rare earth element (REE) prices are still running higher. China is still hoarding them. . .and we have no alternative REE solutions.

But there may be reason to cheer: Months after China cut exports by 72% and began hoarding the very rare earth materials we need for high-tech and government products, comes word that Japan, one of the biggest REE importers, found the rare earth discovery of a lifetime. Yep, Japan says it has found enough rare earth minerals to supply the world.

Somewhere, out over the Pacific Ocean, the nation found more than 100 billion tons (Bt.) rare earth minerals. The sea mud just 20,000 feet below the waters is said to be rich with REEs that'll be quite easy to extract. "Sea mud can be brought up to ships and we can extract rare earths right there using simple acid leaching," says University of Tokyo Professor Yasuhiro Kato.

And if the country can actually get to that, it would cut off China's dominance and help lower the cost of skyrocketing rare earth prices.

For the Average Joe, That Means. . .

Products that depend on rare earths wouldn't skyrocket, possibly bankrupting the very companies that depend on the sales...

Electronics wouldn't disappear from shelves...

Green technology development wouldn't suffer.

And our strategic and defensive weaponry wouldn't be put on back order...

But don't sell your on-land rare earth stocks just yet, though...

But, There's a Problem. . .

The minerals are sitting in the mud, 20,000 feet beneath the surface of the Pacific ocean. And while Japanese officials say it's simply a matter of pumping up material from the ocean floor and using acid to extract, we and other analysts aren't so enthusiastic.

Not only are rare earth elements tough to process commercially, the actual development of deposits found miles under the sea would be quite costly. Because the cost of underwater mining would be high, the value of the REEs must also be high enough to make it worth the dig. That's not the case here. It's not as if we're pulling up gold here.

It'd also take years and quite a lot of money to make it a reality. "The technology you would need, with the pressure and the corrosive factors that are there. . .I think this one falls into the camp of something that is less likely to ever be developed," says one analyst to Reuters.

Others just call it a pipe dream—"Desperado" is the first word that comes to mind," said Jacob Securities Analyst Luisa Moreno, adding, "it makes for some nice headlines, but I don't think it would really be feasible to do this."

Even a Canadian REE company executive, who spoke to Reuters anonymously, said, "I'll wait for the giant squid and the prehistoric monsters that will come out of the bottom of the sea first before we see any rare earths."

And so the search for easy-to-reach rare earth continues amid China dominance.

Ian Cooper
Wealth Daily