Competition for rare earth metals
China’s dominant position in the arena of rare earth metals used in new technology such as batteries for hybrid cars and magnetic motors could be eroded by an Australian listed company – Greenland Mineral and Energy. The company is planning to list in London next year, pending the resolution of a couple of issues.
Greenland Minerals and Energy thinks it probably has access to the world’s largest depositis of rare earth metals and uranium — used to make nuclear energy.
Global consumption of rare earths last year is estimated at 135,000 tonnes or $1.5-$2.0 billion in 2008. Demand is forecast to grow by 65 percent by 2012 from 2008 levels.
Greenland – new and poor country?
Greenland, an arctic island with a population of 57,000, voted for self-governance from Denmark in a referendum on Tuesday. The “Yes” camp won an overwhelming 75 percent of the vote.
Shrimp and halibut fishing and tourism form the backbone of the economy but the island is rich in minerals and its waters may hold vast hydrocarbon reserves.
The resources setting is very much like one of Iceland, although Greenland – made up mostly of Inuit people who live in small, isolated villages – does not have a huge banking sector. (Neither does Iceland these days, some might argue.)
In fact the country does not have roads between towns either. Travel is only possible by boats or planes, weather permitting.
“The conceit is that Greenland would be a commodity economy. However, commodity based economies, as we are seeing, are prone to booms and busts,” writes Marc Chandler, FX strategist at U.S. bank Brown Brothers Harriman.
An eventual independent Greenland is likely to come at a cost. Greenland receives yearly subsidies of 3.2 billion Danish crowns ($557.6 million) from Copenhagen, about a third of its gross domestic product.
In fact the current competition for rare metals has become more complex because China is actively participating in many earth rare projects. Of course we can’t avoid the fact, California seem a pioneer in earth rare projects.