In 2010, China set in motion a wave of worry around the globe when it dramatically lowered quotas on its exports of rare earth elements, which are crucial to the making of everything from cellphones to missile systems to hybrid car batteries. China held 95 percent of the world's supply.

Prices for these 17 materials skyrocketed, and American officials issued dire warnings about American military and energy security. Hillary Clinton, then the secretary of State, called it a "wake-up call" (Greenwire, Oct. 28, 2010). An American company, Molycorp Inc., reopened a rare earth mine in California that had been mothballed, with hopes of reviving a domestic industry.

China abolished its quotas last week, after the United States successfully pressed the World Trade Organization (WTO) to declare them illegal. But it may have been a hollow victory.

Five years after the crisis, experts say that there never actually was a shortage in rare earths, and now most are in surplus. Nonetheless, they add that the United States and the rest of the global economy are nearly as dependent as ever on China, which has consolidated control over its rare earth industry and is positioned to dictate what the world pays for these crucial metals for years to come.

Rare earth elements and metals aren't rare, in the geologic sense; they're just diffuse and hard to extract and make it worth the money. New deposits have been found and are starting to be mined around the globe, but all are a decade or more behind in creating an extraction and processing supply chain as robust as China's.

The end of China's quotas only seem to have worsened the plight of Molycorp, still the largest U.S. supplier of rare earth elements. Its stock, which reached a high of $74 four years ago, closed at 60 cents a share Friday. Some analysts say it's on the brink of bankruptcy, but a company spokesman said its prospects will improve when demand for rare earths rises.

Industries, including many in so-called clean energy, have cut their use of the metals in response to the prospect of high prices. Nonetheless, analysts said that rare earth elements have become a significant lever for China in drawing high-end manufacturing to its shores, since it can offer foreign manufacturers cheaper prices than they can get abroad.

"What people don't seem to realize is that the quotas didn't matter," said Jack Lifton, a metals consultant. "The Chinese are just substituting taxes for quotas. The lowest price you're ever going to pay is in China, for domestic use. And that's absolutely fine with the Chinese."

Ripples through business, culture and Congress

China started restricting its exports of rare earth elements in 2006 and accelerated in 2010, when it cut the export quota by 40 percent.

By mid-2011, a combination of panic and speculation had driven prices through the roof. Neodymium, an ingredient in everything from hybrid car batteries to headphones, had risen from $42 to $283 a kilogram. Samarium, used in the making of missiles, spiked from $18.50 to $146.

China's curbs on "technology metals," as they are sometimes called, touched a nerve in American business, technology and culture.

A key plot point in "Call of Duty: Black Ops II," a bestselling video game released in 2012, had China cutting off rare earth materials to the U.S. military and beginning a global conflict.

In the real world, Congress considered several bills related to rare earths, including one in the Senate in 2013 that would have created a national rare earths policy and another in the House last year to foster a domestic industry and stockpile. Neither passed.

The impact was felt directly among energy manufacturers, such as in lighting, where rare earths such as cerium and europium are used as coatings that improve the energy efficiency of bulbs. In a year and a half, prices for cerium oxide rose more than 3,500 percent and europium by 630 percent, according to a presentation by lighting manufacturer Osram Sylvania Inc.

"It affected [lighting manufacturers] very dramatically, because they use those elements in the manufacture of lamp phosphors," said Terry McGowan, director of engineering for the American Lighting Association. "If these aren't available, production will be hit quickly and very hard."

Amid the price spike, the Department of Energy delayed requirements that three major lighting manufacturers -- General Electric Co., Osram Sylvania and Philips -- issue new energy-efficient fluorescent tubes.

Other manufacturers in energy had their own struggles. Thin-film solar panels use rare metals like indium and tellurium, while a crucial process in the conversion of petroleum into gasoline uses lanthanum and cerium. The batteries of most hybrid gas-electric vehicles use magnets that include quantities of dysprosium and neodymium.

Since the price scare, manufacturers have found ways to use less rare earth elements -- "taking parts of the elemental table off the table," in the words of Michael Silver, the founder of American Elements, a California company that does chemical manufacturing and imports rare earths from China.

For example, "A number of wind turbine manufacturers have told us that they have been forced to develop alternatives to their direct drive permanent magnet generator technology of choice since the price of neodymium spiked," said Kerry Satterthwaite, an analyst at Roskill, a U.K.-based metals consultancy, in an email.

In some cases, such as lighting, the declining use of rare earths is part of a larger transition to LEDs, which use far less rare earths. This leads some to sound a note of optimism about the role of rare earths in manufacturing.

"It sounds like demand for these things has kind of topped out, and maybe it doesn't matter what China does so much anymore," McGowan said.

But in many products of modern life, rare earths remain an unavoidable set of ingredients, such as in surgical lasers, automotive catalytic converters, welding goggles and camera lenses.

China in command

In 2012, the United States lodged an objection against China's export quotas through the WTO and was soon joined by industrialized countries around the world. In August 2014, the WTO rejected China's main argument -- that it curtailed exports in order to conserve a limited resource, and reduce mining pollution -- and ordered China to remove the ceiling on exports.

The end of the quota era has little practical effect, experts said.

Since 2010, China has gathered all its rare earth mining and processing operations under six companies and started the creation of a massive stockpile. In 2011, American Elements was forced to sell its manufacturing facilities to a government-owned conglomerate, Silver said.

Meanwhile, it continues to impose tariffs of 15 to 25 percent on exports of rare earths, making it certain that it will cost more to acquire them abroad. As China ended its quotas last week, it also initiated a new export license that will ensure government control, Satterthwaite said.

The United States used to be a sizable maker of rare earths, but the industry died in the early 2000s after a decade of price-cutting by China. In 2010, Molycorp, which used to be the United States' principal producer, restarted its Mountain Pass mine in California and that year began trading on the New York Stock Exchange.

The stock rode high for a while, and its output has contributed to reducing China's portion of worldwide rare earth production from 95 percent to closer to 86 percent, The Wall Street Journal reported.

Molycorp's stock has been in steady and accelerating decline since 2011. Part of its problem, and its opportunity, lies in the mix of minerals it mines in California. Most of its output is cerium and lanthanum, which are relatively common and inexpensive. A smaller portion -- projected to be 16 percent, when the mine reaches full capacity -- are materials like neodymium and praseodymium, which command high prices.

"The relatively slow market cycle in which we currently operate is challenging, no question about it," said Molycorp spokesman Jim Sims in an email.

In 2012, Molycorp acquired Neo Material Technologies Inc., a Canadian rare-earth processor, and now mines or refines a wider array of rare earths in Europe, the United States and Asia, including two processing facilities in China, Sims said. Critics have said that absorbing Neo Materials overstrained Molycorp's finances and may lead to its downfall.

Customers for Molycorp's Chinese output, Sims said, include Western and Japanese companies that are making finished products for the Chinese market.

Sims said he is confident that Molycorp will thrive as demand for rare earths rises. "The greatest growth driver is expected to come from applications that use magnetic rare earths, such as direct-drive wind power turbines, hybrid and electric vehicles, energy saving appliances and office equipment, factory automation systems, and others," he said.

Other rare earth projects seeking funding to start up in the United States are Bear Lodge in Wyoming andBokan Mountain in Alaska. Meanwhile, other mines are being prospected from Australia to Sweden to Brazil.

"I think you'll see heavy earth production in the U.S. and Europe in the next three years," Lifton said. He pointed out, however, that building the supply chain to refine rare earths might take a decade or two.

Prices for rare earths from China have dropped back to reasonable levels since the price scare of five years ago, but experts cautioned that China still is in unquestioned command of price and supply.

"You can bet that once the economy turns around, they will drive up the costs of rare earths," Silver said.