Rare earth materials (atom numbers 57-71) are a topic of concern because they're necessary for many high technology industries and the PR China has had a production share of consistently more than 90% since 2001.
The scenario of painful export restrictions by China that could kill off many high tech industries in the rest of the world has helped to attract attention to the problem.
This concentration of supply would be a pressing problem even if the Chinsse government was a good friend, though. It's not certain that the Chinese production will keep up with a growing and changing world-wide demand. China might end up consuming its whole rare earth materials production itself in a couple of years.
The production of rare earth materials wasn't always concentrated like this; it's a development of the last 15-25 years.
The world-wide production for are earth materials is only around 125,000 metric tons/year +/- 15,000 t/yr (I don't know the exact figure for 2009). That's a relatively small quantity on a global scale; the annual iron production exceeds 1.7 billion tons, for example.
Can such a small quantity make a huge difference?
Yes, it can. You can easily find the concerns about this in websites and publications about rare earths. I'd like to offer a different view, by showing the historical impact of rare materials shortages in Germany during the World Wars.
Propellants and explosives were produced from nitre (salpetre) up to WW1. Nitre supplied the necessary nitrogen. The greatest nitre production was in Chile - and Germany was cut off from that supply by the British naval blockade. The First World War would have been over by late '1915 for a lack of Central Powers munitions if the German chemical industry (the biggest chemical industry of the time) had not developed a procedure to extract the necessary nitrogen from air (the atmosphere consists of 78% nitrogen, after all).
Rubber was produced exclusively from natural rubber back during WW1, and Germany had almost no access to it due to the naval blockade. The consequence was the substitution of rubber to keep the few motor vehicles of the time running; spring-cushioned metal wheels were used, for example.
The lesson was learnt and the German chemcial industry found a solution during the inter-war years by developing synthetic rubbers ("Buna"). The Nazis ordered synthetic rubber factories built and there was no need for spring-cushioned metal wheels in WW2 (there was still a rubber shortage, though. The Allies had their own rubber shortage because they lost the Malayan natural rubber plantations in early '42).
Iron is superior to Bronze not so much because of the iron's own properties as because of the effect of additives. Iron alloys can have excellent technical properties. These alloys require the addition of carbon and other materials (such as Manganese, Chromium, Nickel) in small quantities. That's fine - as long as you have a guaranteed supply of these steel additives.
The likely best bomber design of WW2, the Junkers Ju 288, wasn't built simply because the only suitable engine (Jumo 222) had been developed without concerns for rare materials availability. The engine simply required too many rare materials and was therefore not put into production.
The Allies were spared of this extremely high performance bomber and the model was mostly forgotten. Nowadays, the Ju 88 or its derivative Ju 188 are being remembered as the best German WW2 bomber and a contender for the title of overall best WW2 bomber.
The German army had a serious problem with its anti-tank capabilities in WW2. This was in part because its very promising research and development of squeeze bore anti-tank guns did not yield usable quantity-produced AT guns. The technology was sound (albeit quickly overtaken by subcalibre projectile technology). The barrel had a smaller bore at the muzzle and "squeezed" the projectile. The projectile received the propellant gas pressure from a larger surface than its cross-section in flight. The result was an extraordinarily high muzzle velocity (and high barrel wear). That high muzzle velocity and high kinetic energy in relation to its cross-section allowed for a high armour penetration if one more conditionw as met: The projectile core had to be very, very strong. It also helped to have this projectile core made of very dense material, for this increased the effective range.
The problem: The projectiles required tungsten. Tungsten was in short supply. The German government basically had two choices:
(1) It could supply tungsten to the industry for the production of tools and machines to keep the war industry running.
(2) It could spend tungsten on projectiles, accepting that the metal industry would soon thereafter collapse for a lack of durable metal working tools.
The choice was an obvious one, and the tungsten core munitions were produced in very small quantities - they offered no general answer to the AT problem and the AT gun development had to shift its focus belatedly towards more conventional guns.
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The problem of rare materials supply is a clear one; you can usually substitute, but the substitutes are usually expensive and often technically inferior.
It would be a good idea to be concerned about rare earth mineral supply as much as energy supply, and to take action on the problem.
The answer is an easy one for the U.S.; it can (and does) re-start rare earth production at their "Mountain Pass" mine.
I think the rare earth supply problem is an excellent opportunity for a concerted European action; we could found a rare earth supply project similar to the earlier European efforts at founding a strong airliner production industry (Airbus) and setting up an own European satellite navigation system (Galieo).
There are only small deposits in Europe, though. Portugal, Germany, Norway and Sweden have tiny deposits and the Russian deposits in Europe aren't useful for a EU project.
There are huge deposits in Danish-controlled Greenland (~5 million tons) and in Europe-friendly Australia. A small, exploitable deposit is in Malawi; an Australian company has the mining rights. Canada has also two rare earths projects that might help.
A dirty mineral mine on Greenland (unavoidably associated with environmental damage) isn't nearly as sexy and pleasant (photo ops!) as a European aircraft production corporation of a satellite network project. Nevertheless, it might prove to be even more importnat. We shouldn't jut hope for supply from the Mountain Pass mine or wait for a solution of the problem by the corporations. To adress the rare earths supply problem is a classic example of a necessary strategic policy.
http://www.bgr.bund.de/... (in German)
http://www.bgr.bund.de/... (in German)