The Business Case for Conserving Rare Metals

Increasing digitization of the economy and continued developments in information technology and computing require increasing amounts of rare elements (including, but not limited to, the rare Earth Elements or REEs). The motivation for this article is that many of the potentially important elements, which are by-products of other metals, are neither being recovered from existing sources, nor recycled from existing uses mainly because there is a disconnect between supply and demand for many of them. Corporate short-termism is incompatible with investment in increasing rare metal mining efficiency or creating effective metal recovery and recycling systems. Yet, the public policy case for recovery and recycling of rare metals is very strong. To address this need, this article suggests the creation of Metal-X, a government sponsored metals stockpile of rare metals. This could be a long-lived public-private venture supported by long-term investors such as pension funds. The purpose of Metal X would be, first of all, to raise prices to the point where secondary recovery becomes profitable. Furthermore, it would encourage new applications that have hitherto not been attractive due to supply constraints. Incidentally, it would also help break the Chinese production monopoly for heavy rare earth elements. And finally, it could (in principle) constitute a basis for national currencies (as gold once did.)