The rare earth elements (REE) are fifteen elements with atomic numbers 57 through 71, from lanthanum to lutetium ("lanthanides"), plus yttrium (39), which is chemically similar to the lanthanide elements and thus typically included with the rare earth elements. Industrial demand for these elements is relatively small if measured by tonnage mined, but they are extremely important for a wide range of high tech applications. Rare earth magnets, metal alloy components in batteries, phosphors, and more are essential in many alternative energy (new energy) applications such as electric vehicles, energy-efficient lighting, and wind power. Thus rare earth metals are strategically important for the development of clean new energy applications from electric vehicles, to wind power, to energy storage systems, and more.

The rare earth metals aren't exactly rare, but instead rarely concentrate into economically exploitable ore deposits.

There is a growing concern over the geopolitical situation of rare earth metals. Until 1948, most of the world's rare earths came from placer sand deposits in India and Brazil. In the 1950s South Africa took the lead after large veins of rare earth bearing monazite were discovered there. In the 1960's the Mountain Pass rare earth mine in California was the leading producer. But today, as in so many other things, China has become the dominant supplier of rare earth metals. This, even though it has only 37% of proven worldwide reserves of rare earth metals.

Despite globalization reasons (China is leading the world in low cost production) behind China becoming the dominant force in rare earth metals, there is a technical reason. All of the world's heavy rare earths (such as dysprosium) come from Chinese rare earth sources such as the polymetallic Bayan Obo deposit.

The use of rare earth elements in modern technology has increased dramatically over the past years. Rising demand has created a looming concern over a production shortfall. Some look at it and the phrase Peak Neodymium pop into their head. But the situation isn't the same as "peak oil" because we're a long ways from consuming the mid-point of rare earth metal deposits. Instead this is a simple potential production shortfall which might be solvable by building new mines. Maybe.

Geopolitical concerns are intensifying due to China's actions. China has announced regulations on exports and a crackdown on smuggling. Supposedly this is for environmental protection, but many see China moving away from exporting raw materials and towards production of products made from raw materials. In September 2009 China announced plans to reduce its export quota to 35,000 tons per year in 2010-2015. In October 2010 a report in China Daily quoted an unnamed Ministry of Commerce official saying China will "further reduce quotas for rare earth exports by 30 percent at most next year to protect the precious metals from over-exploitation".

Searches are ongoing in Australia, Brazil, Canada, South Africa, and the United States for alternate sources. Many mines were closed in the 1990's when China undercut the world-wide prices.

Rare earth elements are now incorporated into many technological devices, including superconductors, samarium-cobalt and neodymium-iron-boron high-flux rare-earth magnets, magnesium alloys, electronic polishers, refining catalysts and electric or hybrid car components (primarily batteries and magnets).

References:

http://en.wikipedia.org/wiki/Rare_earth_element

http://en.wikipedia.org/wiki/Category:Lanthanides

http://www.usmagnetmaterials.com/ - US Magnetic Materials Association - A trade group representing a small handful of manufacturers supplying magnetic materials, rare earth metals, etc. It's stated history starts with the 2002 closure of the rare earth mine at Mountain Pass, CA.

http://pubs.usgs.gov/sir/2010/5220/ - The Principal Rare Earth Elements Deposits of the United States -- A Summary of Domestic Deposits and a Global Perspective - A comprehensive report from the USGS published in November 2010.