I first come across the term 'Rare Earths' in Stephen Leeb's book 'Red Alert'. He wrote about China hoarding the coveted resource. Cheap oil is running out as what Deepwater Horizon oil spill diasaster in 2010 has proven - drilling in deep waters for oil is desperate.
So what has end of cheap oil & rare earths got to do with each other? Stephen Leeb mentioned that rare earths are a critical ingredient needed in alternative green energy sources such as making solar panels & magnet generators for wind turbines. China's govt has foresight to recognise need to switch to alternative green energies & its infrastructure in future.
Sure, China can sell the coveted resource but why sell it for short-term gains when there's much greater long-term gains down the road? - again the foresight of the chinese govt to make China strong.
"Middle East has oil, China has rare earths" - Deng Xiaoping in 1992
With its rare earths supply & severely limiting its exports to other countries, China has in a way 'force' foreign companies to set up factories in China to manufacture high-tech products. It allows China to move up the high-tech ladder faster since rare earths are required in many high-tech products.
When the world finally wakes up to the fact of end of cheap oil era & mad rush for alternative green energies, the demand for rare earths is gonna be astronomical. China's hoarding & its reserves is not enough for its gargantuan population of 1.3B for its transition to alternative green energies & infrastructure, let alone the world population of 7 billion......
Is not all doom & gloom yet as Japan has recently discovered a large deposit of rare earth minerals in its Pacific seabed.