World industries dependent on rare earth elements, so named because of their scarcity and high value, will be facing an uncertain future as supply could be disrupted by technical, environmental and financial factors.

Global demand for REE has increased by more than 50 per cent in the last decade, and is forecast to keep rising. Still, "geological scarcity in absolute terms is unlikely to be a concern," according to a briefing note published by the Geological Society of London.

As of July, the main problem with REE supply is that there are not enough REE available to countries other than China, the study said.

Although known REE deposits outside China have been found and potentially economic to mine, they cannot simply be turned on, the study noted, stressing it will take a decade or longer to go through all the technical, financial, environmental and regulatory stages needed to establish a new mine.

"(It is) the technical, financial and environmental challenges of establishing new mines (that) could lead to disruptions in supply. Overcoming these challenges will take some time, as will reopening pre-existing mines. It is this which leads us to be concerned about future supply," said Professor Paul Henderson, Honorary Professor of Mineralogy at University College London, and chairman of the drafting group.

Extracting REE is a very tricky and financially exhaustive business undertaking. The challenge to miners to ensure profitability lies in extracting the precious elements at the very least cost. Moreover, prospecting these metals is very expensive and arduous.

The natural occurrence of REE is strongly dependent on geological circumstances. Over the years, there have been only a few locations found to have sufficient quantity and concentration, and in a suitable form and setting, to make their extraction and exploitation economically viable.

Henderson also noted are environmental considerations. REE production uses a great deal of energy and most REE mines are on the surface. Henderson said geoscientists must not only identify potential sources of REE and how to extract useful ores, but likewise ensure that little damage as possible is done to the environment during extraction.

"Policy-makers and investors need to be informed by the best available science (in order to be guided to come up with the most appropriate) decisions," Henderson said.

"Sustained funding of research is needed for the entire life cycle of the REE, from exploration and mining to manufacture, recycling, re-use and disposal," he added.

Most of the main reserves of REE are found in Bayan Obo in Inner Mongolia, China; former Soviet states, including Russia, Kyrgyzstan and Kazakhstan; Mountain Pass, Calif., and in Mount Weld, Australia, the study said. There have been also resources found in India, Vietnam, Malaysia, Thailand, Indonesia, South Africa, Namibia, Mauritania, Burundi, Malawi, Greenland, Canada and Brazil

Of these, Bayan Obo contained the greatest quantity of REE known. However, the Maoniuping deposit in Sichuan province, China, is dubbed at present as the world's biggest REE producer, The Weishan deposit in Shandong province is also mined for REE.

Before Bayan Obo, the largest single source of REE was a carbonatite sheet at Mountain Pass. Although mining at Mountain Pass ceased in 2002 due to environmental concerns, it has recently reopened and is expected to return to full production in 2012. Mountain Pass, along with Mount Weld in Western Australia, is expected to make a significant contribution to global supply of weathered carbonatite.

Other significant contributions include the alkali trachyte intrusion at Dubbo, New South Wales, Australia, where REE will be co-produced with zirconium and other metals, and a further smaller monazite deposit at Steenkampskraal, Western Cape, South Africa.

Significant mineral sand deposits include those in western India and in Western Australia. Most of these deposits contain monazite-(Ce) and some also contain xenotime-(Y).

REE are also produced as byproducts from the minerals apatite or phosphate ore and loparite or niobium ore mined at Khibiny and Lovozero on the Kola Peninsula, Russia.

A 2002 report by the United States Geological Survey listed 822 occurrences of REE in a wide variety of rock types, about 20 per cent of which are carbonatites. As of June 2011, there is also active exploration in alkaline igneous rocks, mineral sands, and hydrothermal deposits, the study said.

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