Gold, silver and copper have stolen headlines during the bull market in metal commodities, but commodities expert Jim Rogers sees rare earth metals as another play in the metals.

“The future of rare earth is great. What is happening is the prices are going through the roof because the Chinese do control the supply, but it is pure simple capitalistic economics now,” Rogers told India’s business television channel ET Now.

Rogers, the 68-year-old veteran of the commodities markets and former partner with George Soros at the Quantum Fund, has been a student of the Chinese market and its impact on the global economy. He said that approximately 97% of total world mining production on rare earth metals in China.

“Well, China does produce 97% of rare earth. Uranium is not a rare earth, but they do produce a lot of uranium as well,” he said.

Rogers said the global rush to locate potential rare earth supplies outside of China could provide investors a play on these commodities. Mining companies based in China have been investing outside China as well, with Africa as a focus of some Chinese mining firms to meet future demand.

“So it’s all going to bring a new supply and eventually the price of rare earth will come down again. But in the mean time until the new mines can come on stream, somebody is going to make a lot of money,” the chairman of Rogers Holdings said.

The U.S. Department of Energy (DOE) issued a report warning of future supply of rare earths to the clean energy industry in the United States.

Rare earths are critical to green energy products such as hybrid and electric cars, fiber-optics cables, cellphones, wind turbines, lasers and low-energy light bulbs.

“We are very concerned about China’s export restraints on rare earth minerals,” a spokeswoman for the DOE, Nefeterius Akeli McPherson, told the India’s television channel ET Now. “We have raised our concerns with China and we are continuing to work closely on the issue with stakeholders.”

China’s Ministry of Commerce recently cut its export quota of rare earths by 35% for 2011, which comes on the heels of a 72% slashing of rare earth exports for the second quarter of 2010.

Moreover, China’s Ministry of Finance posted on its Web site earlier in January that it will raise export taxes on rare earths to 25 percent in 2011.

However, the Chinese have responded to concerns of a tightening rare earths market, citing environmental concerns in China.

“China’s measures are for the sake of protecting the environment for the sustainable development for the industry,” said Zhang Anwen, deputy secretary-general of the Chinese Society of Rare Earths, China Daily reported.

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