LONDON, July 1 -- The world will not run out of rare earth metals used in new technology, and those who think it will do not understand the difference between reserves and resources, British Geological Survey (BGS) said on Wednesday.
Andrew Bloodworth, head of minerals and waste at the BGS, a supplier of geological information, told Reuters rare earth metals were so named because the minerals they were orginally extracted from, by early chemists, were rare.
"They are not rare, as a group they are more abundant than silver. It's very common for the media to get mixed up between reserves and resources," he said.
"People look at reserve reports, calculate 20 years' worth at current demand levels and then say 'oh my god we're going to run out' ... In reality reserves are dynamic and tend to run ahead of consumption. Reserves do not provide a reliable indication of impending shortages."
There are rare earth metal resources on all the continents, a relative abundance of them in the earth's crust, BGS said.
But production of rare earths is currently concentrated in China, which accounts for 95 percent of global supply, and is trying to clamp down on exports of its mineral wealth.
The process of turning rare earth minerals into refined products is the most advanced in China -- estimated to have more than 35 percent of global reserves.
The country has dominated the rare earths arena because other producers have been unable to compete on cost.
"People think China is sitting on all the rare earth resources, that's not true," Bloodworth said. "As concerns grow about the Chinese monopoly, there is growing commercial interest in developing other deposits and bringing them to mine status."
A recent example is U.S.-based Molycorp, which produces rare earth elements. It is planning to modernise and expand its Mountain Pass facility in California.
MOTOR MAGNETS DRIVE DEMAND
The main driver of demand for rare earth metals are motor magnets used in hard disk drives, CD ROMS and DVDs and electric cars -- a big theme at the moment in a world worried about energy conservation and global warming.
Neodymium and praseodymium are combined with iron and boron to produce alloy powders that have magnetic properties.
"Weight for weight these magnets are 10 times stronger then the ones you used to play with as a child," Bloodworth said.
Terbium is also used in magnets for high temperature applications, cerium is used in catalytic converters for cars, while lanthanum is an important catalyst for petroleum refining and is used in rechargeable batteries for hybrid cars.
"It is difficult to predict demand for rare earths over time because they are a complicated group of metals used in many applications, in small quantities," Bloodworth said.
"Their uses change over time, scientists are always looking for new ways to use them and that's why it's quite difficult to get to grips with demand ... Hard to say over a decade what they are going to be used for."
Latest figures from BGS show total reported world production of rare earth oxide in 2008 was 126,000 tonnes, a four percent increase from 121,000 tonnes in 2007.
"Some analysts forecast consumption of rare earth oxides will reach 190,000-210,000 tonnes by 2015," Bloodworth said.
"It is also predicted that demand will outpace supply for certain elements, particularly neodymium, dysprosium and terbium, unless sufficient new production capacity comes online."