Even with recycling and substitution, there’s only so far rare earth consumers can stretch available supplies

May 01, 2010 | 06:23 AM | Anne Riley

The development of a Western source of rare earths would secure the supply chain for consumers but with a domestic supply still years away some end-users are looking for other ways to limit their exposure before it's too late.

"Arguably somewhere between 90 and 97 percent of rare earths, depending on who you talk to and when, comes from China. I think the real issue is how fast market demand goes up and whether or not the supply chain can keep up with that demand," said Steve Constantinides, director of technology at Rochester, N.Y.-based Arnold Magnetic Technologies Corp., which manufactures samarium-cobalt magnets at its Swiss facility.

"We have visited our suppliers in China and they've assured us that we will not experience a shortage of raw materials. However, that doesn't mean they can guarantee the supply. To some extent, because China is not a totally free market, there is a possibility of government intervention either with export quotas, tariffs or (some other form of) intervention in the market. So we have a concern, but we think that it is not an uncontrollable situation."....