On the upside, this will increase the value of that big rare-earth find in Nebraska. Then there are those seabed mining ventures.
UPDATE: Reader Roger von Oechs writes:
In producing my popular creativity toy the “Ball of Whacks,” I have first-hand experience with the escalating price of “rare-earth” Neodymium magnets. The price of neodymium jumped SIXFOLD from June-2010 to June-2011 (though it’s come down a bit lately). The Chinese have shut down mines, curtailed foundry production, and limited export. Market manipulation at its best!
Since the “Ball of Whacks” has 180 rare earth magnets in it, the price to manufacture it has more than DOUBLED. Fortunately, I had the foresight to buy 18 million magnets last December, and have been able to keep prices somewhat in check for the remainder of this year. But as far as 2012 goes, I’ll have to pass the higher costs, along to the customer, and this will have a big impact on demand. I’m sure this is true for many other companies that use Neodymium magnets as well.
Ouch.