George Barakos, et al., report that it has been nearly eight years since rare-earth elements (REE) became the subject of front page headlines. It was when the controversial Chinese export policy for these critical commodities was epitomized in a maritime border dispute with Japan in September 2010 that resulted in the big REE crisis and price spike of 2011 (Barakos et al., 2016c; Mancheri, 2015).
The world was dismayed, especially in REE-importing countries such as the United States that was, and still is, totally dependent on Chinese production and exports (Barakos et al, 2016c; Kennedy, 2015). The short-lived alarm initiated a treasure hunt by way of exploration for REE deposits all over the world. The continuously growing demand on the one hand, and the Chinese sovereignty of the REE-market on the other, led the rest of the world to explore their own REE resources. In just a few years, more than 400 projects were initiated to explore REE deposits outside of China
(ERECON, 2015; Goodenough, 2016).
The prices of REE, however, dropped rapidly in late 2017 and were in six-year lows, before the 2011 crisis (Barakos, 2017). The viability of even major established producers is being challenged, not to mention the development prospects of potential REEmarket entrants (Barakos et al., 2016b; Rollat et al., 2016). Production cutbacks and industry consolidation in China have impelled REE market experts to forecast that prices have already reached their lowest point and have nowhere to go but up (Adamas, 2015; Roskill 2015). Yet, expectations for increased REE prices are limited and drastic changes are unlikely to happen in the near future, as there is still excess supply in the overall REE market (Barakos, 2017). Nevertheless, the low prices of rare earths are not the only reason that potential producers are struggling to enter the global REE market. Among other parameters, the separation process of the individual elements seems to be the most important factor, as it is technically challenging and expensive to build and to operate.
Thus, in this article, an analysis is made to identify the boundary conditions that govern both the global and domestic (U.S.) REE industry in order to determine the factors and establish a market channel that can connect potential U.S. REE projects to the global market.
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