Downstream industries highly dependent on rare earths elements are now seeking substitutes by way of sythetically producing the material.

While the biggest rare earths producer China consolidates its rare earths sector, stockpiles its own reserves, and continue to manipulate global prices with its export curbs regulation plus a soon-to-be-launched trading platform, end users on the manufacturing end are on the move to bridge their requirements.

In the U.S., Sen. Charles E. Schumer, along with university leaders of the University at Buffalo (UB), led by its president Satish Tripathi, are working to create synthetic replacements of the highly vital rare earths elements. But to aid this, the parties have lodged for a $120 million grant with the Department of Energy.

Rare earths are essential to create a number of applications to support the manufacturing of simple household gadgets such as mobile phones, colored television sets to complex defense weaponry systems. But the entire supply chain is being threatened by China's monopolistic stance on the matter, knowing fully well that it is the world's stronghold of the precious elements.

"Rare earths go into components in one area of manufacturing after the other. But the Chinese have a lock hold on these rare earths," said Chuck Schumer, New York's senior U.S. senator, was quoted by News WBFO/AM 970 as saying to Buffalo dignitaries on Monday.

On Monday, UB launched its new Center for Excellence in Materials Informatics, where researchers are now trying to fabricate substitutes for rare earths. Should the DOE approve the grant, UB can become a national innovation hub for advanced materials research.

The federal grant would provide five years of funding for research to establish a Department of Energy innovation hub. UB believed federal research funding would be the key to convert the Materials Informatics Center of Excellence into a national center of critical materials research.

Sen. Schumer even said companies such as General Electric, Ford Motor Co. and IBM can partner with UB to develop the synthetic materials.

In his January State of the Union address, U.S. President Obama mentioned developing a synthetic rare earth industry is a priority.

Full proposals for the DOE grant are due by the end of August. A decision is expected by end of the year.

China has about 50 per cent of known global rare earth oxide (REO) reserves and thus controls more than 95 per cent of the world's rare earths supplies. Demand for rare earths is expected to jump to 170 kilotons in 2015, from 125 kilotons in 2010.

At present, there are currently at least 11 major non-Chinese rare earth projects reported.

The DOE, in its "2011 Critical Materials Strategy" report, said provision of rare earth elements dysprosium, terbium, europium, neodymium and yttrium are already reaching "critical" levels of short-term supply, meaning supply issues could occur from now through 2015.

Yttrium, used to make compact fluorescent lamps, is 100 per cent imported from China since there are no other producers mining or refining it. Dysprosium, essential for magnets that can operate at high temperatures such as vehicle drives, also mostly come from China.