Released date - January 10, 2013 - A fund for one of the more exotic mining bets the average investor can make is falling Thursday, keying off a big loss by a single stock.

Market Vectors Rare Earth/Strategic Metals ETF (REMX)  is down by one percent. Rare earths are tough-to-mine metals with a number of high-tech uses, including in cell phones and semiconductors. One of the fund’s components, Molycorp (MCP), said it “anticipates lower than expected revenue and cash flow for 2013, and is evaluating its capital needs for 2013.” Shares of that company are plunging 22% this afternoon.

Molycorp makes up about six percent of the rare-earth fund. Thompson Creek Metals (TC), another firm with a 5.5% weighting in REMX, is down 1.2%.

Rare-earth metals’ importance in high-tech manufacturing hasn’t translated into stock-market success. The Market Vectors fund had an eleven percent 2012 loss that was preceded by an even bigger tumble — 32% — the year before.

Molycorp’s stock woes exemplify the trend. The stock dipped near $8 this morning, a level it hasn’t seen since November. The longer trend exaggerates it: The stock traded close to $80 after its late 2010 initial public offering.

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The United States Department of Energy has granted $120 million toward the creation of the Critical Materials Institute (CMI), which will be responsible for developing new methods of rare earth element production and management.

The CMI, led by Ames Laboratory and includes over a dozen research partners, hopes to create technology to avoid supply shortages while also reducing rare earth dependency on China. According to a report by Bloomberg, China provides about 95 percent of the world's rare earth shipments, and recently decreased production limits to conserve the environment and keep their supply in check. The CMI will focus on diversifying the supply of rare earths, develop substitute materials, and improve methods of reusing and recycling materials.

Rare earths include a group of 17 similarly structured elements that are used in the production of phones, disk drives, televisions, and other consumer products, and can also be used to manufacture wind turbines, electric vehicles, and advanced batteries.

Dependency on the import of rare earths is the result of insufficient technology and manufacturing facilities, as opposed to lack of raw material — the Mountain Pass mine in California, for example, has one of the largest deposits outside of China. The CMI will help discover new and more efficient ways to tap into the resources, while also decreasing the use of materials that can potentially have supply shortages in the future.

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JAPAN will launch a survey of its Pacific seabed in the hope of finding rare earth deposits large enough to supply its high-tech industries and reduce its dependence on China.

Researchers from the Japan Agency for Marine-Earth Science and Technology will start the probe from January 21 on the seabed near Minamitorishima island, some 2000 km southeast of Tokyo, he said.

Finding large-scale proven reserves inside Japan's exclusive economic zone would be a boost to Japanese industry, which currently relies on imports from China.

These imports have in the past fallen victim to the delicate political relationship between the two countries, notably in 2010, when manufacturers complained supply was being squeezed during a spat over disputed islands.

The row, over a Tokyo-controlled archipelago known as the Senkakus that Beijing claims as the Diaoyus, has flared anew in recent months.

The survey will follow an earlier finding by Tokyo University professor Yasuhiro Kato, who took mud samples from an area.

He said these indicated deposits amounted to around 6.8 million tonnes of the valuable minerals, or 220 times the average annual amount used by industry in Japan.

Rare earths are used to make a wide range of high tech products, including powerful magnets, batteries, LED lights, electric cars, lasers, wind turbines and missiles.

China produces more than 90 percent of the world's supply of rare earths, but has clamped down on exports of them in a move Beijing says is aimed at protecting its environment and conserving supplies.

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An official with the Japan Agency for Marine-Earth Science and Technology has said that researchers are preparing to start a new survey for valuable deposits of rare earth minerals in the country’s Pacific seabed. The search is scheduled to begin on January 21st, and will see them probing roughly 2,000 kilometers (1,250 miles) southeast of Tokyo, near the small island of Minamitorishima. A successful find of minerals will help Japan to reduce its reliance on China within the high-tech manufacturing industries.

This will actually be the second survey of the area, following last summer’s findings of a 6.8 million ton deposit of rare earths by University of Tokyo professor Yasuhiro Kato. Should that turn out to be accurate, it would be enough minerals to supply Japan’s consumer electronics and hybrid car engine needs for more than 220 years. This deposit is the first to be found within Japan’s exclusive economic zone, a huge benefit for the island nation that currently can only rely in imports.

As over 90% of the world’s supply of rare earths comes from China, the push for Japan to reduce its reliance stems greatly from the ongoing diplomatic tensions over a group of disputed islands. Politics have often gotten in the way of Japan’s supply from China, most notably in 2010 when the Beijing government briefly suspended all shipments. Similar action was threatened again shortly after the eruption of anti-Japanese protests in China in mid-September.

While China claims it has increased its restrictions on rare earth exports, not just to Japan, but to the international community as well, because of environmental concerns. Tired of the tight squeeze, Japan has been joined by the U.S. and European Union in filing a complaint over unfair practices with the World Trade Organization (WTO). Several other countries which are believed to have their own mineral deposits, including Vietnam, are eager to cooperate with Japan, which supplies the financing and processing technology, so both can benefit without having to deal with China.

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