Advertisement
Blogs
Advertisement

Finding Sources Of Rare Earths Beyond China, Part 1

Mon, 06/11/2012 - 8:20am
H. Sterling Burnett, Senior Fellow, National Center for Policy Analysis

Key components of most modern electronics and green energy technologies, as well as defense systems, are made from a small number of elements and critical metals called rare earths. Indeed, rare earth elements are the basis for much of modern technology due to a range of relatively unique electronic, magnetic, optical and catalytic properties.1 From lighting to lasers, magnets to X-ray units, glass tints to electronics, these “rare” minerals are ubiquitous in modern technology. (See Figure 1.)

Industrialization & China’s Rare Earth Monopoly

Despite the name, rare earths are relatively abundant in Earth’s crust. Unfortunately, these elements are seldom found in economically exploitable concentrations, except in the People’s Republic of China. There, rare earths are abundant and in relatively high concentrations. However, the Asian superpower has exercised strategic controls over their mining, use and export.2 Thus, China currently holds about 97 percent of the global market, a de facto monopoly on trade in rare earths.

In the last few years, China has withdrawn increasingly larger amounts of rare earths from the export market, claiming it was necessary to protect the environment and to satisfy growing domestic demand. However, China’s demand is not primarily due to increased domestic consumption of products that require rare earths; rather, it is because companies that require those elements have begun to shift operations there from other countries in order to gain less expensive access. Much of the output of these new factories is for export. For instance:

  1. Partly to secure rare earth supplies, General Electric recently closed its last U.S. light bulb factory and is opening a new factory in China to make compact fluorescent lights.
  2. Despite receiving more than $58 million in grants, loans and tax incentives in 2007 from the Commonwealth of Massachusetts (in addition to federal support), Evergreen Solar closed its solar panel plant in the state and began a joint venture in China.3
  3. A U.S. specialty lighting manufacturer, Intematix, and Japanese manufacturers, Showa Denko and Santoku, have also opened new factories in China — specifically to secure access to affordable rare earths.4

In 2008, factories outside of China used nearly 60,000 tons of rare earths. In the past two years, however, the Chinese government has limited exports to just 30,000 tons per year, driving up global prices. Outside China, the prices of rare earths are much higher than just a few years ago. For instance, in 2009, cerium oxide, used as a catalyst and in glass manufacturing, cost $3,100 a ton. It now costs as much as $110,000 per ton outside of China — four times its domestic price.5 In addition, China has begun to consolidate rare earths production into a single state-owned company that currently controls 60 percent of Chinese production. This firm sells primarily to domestic companies recommended by the government.6

China’s Geopolitical Influence Due to Rare Earths

China has already proved willing to use rare earths to extract favorable political concessions from other countries. For example, on September 7, 2010, a Chinese fishing boat in a disputed portion of the East China Sea collided with a Japanese coast guard vessel. The Japanese arrested the fishing boat captain. The incident sparked a heated diplomatic row, leading China to restrict rare earth exports to Japan, its largest buyer, for several months. When Japanese authorities refused to release the captain, China retaliated by halting rare earth exports to Japan altogether.7 Japan soon relented and released the captain, and China resumed rare earth exports — at reduced levels.

Increasing Supply by Mining

Due to rising prices and the unreliability of China as a supplier, many countries and international companies have begun to seek alternative supplies, including new mines. Under the most pessimistic projection in the study, total global rare earths production will grow from 123,310 tons per year to 293,403 tons per year in 2017.  By contrast, under the most optimistic projection in the study, 327,244 tons of rare earths would be produced worldwide in 2017.

Supply and demand vary for different rare earth elements. A few rare earths are available worldwide, but for several of the most critical ones, industries receive only 50 to 74 percent of the quantity demanded. By 2014 (at the earliest), supply of only one of the most important rare earths will meet or exceed demand, and for two of those top five, supply won’t match demand until 2016.

How and where will supply increase? Gareth Hatch of Technology Metals Research projects China will remain the largest single source for rare earths through 2017. However, its dominance will wane sharply for some rare earths as early as 2013, and it will supply less than half of each rare earth element by 2017. New supplies are on the horizon.  

Though reliable data for rare earth operations outside of China are lacking, the most likely sources are five mines: Lahat (located in Malaysia), Karnasurt (located in the Kola Peninsula of the Russian Federation), Buena Norte (located in eastern Brazil), Orissa-Kerala (located in various coastal regions of India) and Mountain Pass (located in California).

Figure One: Selected Uses of Rare Elements

NAME                        SELECTED USES

Scandium                    Lighting

Yttrium                       Lasers, Metal Alloys

Lanthanum                  Batteries (including those in electric cars)

Cerium                        Lenses, Glass

Praseodymium            Aircraft, Lighting, Electronics, Magnets (including those in wind turbines)

Neodymium                Lighting, Magnets, Electronics (including wind turbines and electric cars)

Promethium                 X-Ray Units

Samarium                    Glass, Magnets (including those in wind turbines)

Europium                    Lighting, Fluorescent Bulbs, Video Screens

Gadolinium                 Neutron Radiology, Video Screens

Terbium                       Lighting, Magnets, Video Screens

Dysprosium                 Magnets, Video Screens (including wind turbines)

Holmium                     Glass Tint

Erbium                        Metal Alloys

Thulium                       Lasers

Ytterbium                    Stainless Steel, Other Metal Alloys

Lutetium                     Metal Alloys, Nuclear Technology

Tellerium                     Metal Alloys, Electronics (including solar panels)

Source: “Rare Earth Elements—Critical Resources for High Technology,” U.S. Geological Survey, Fact Sheet 087–02, Table I. Available at http://pubs. usgs.gov/fs/2002/fs087-02/  

What’s your take? Please feel free to leave a comment below! Tune into tomorror for part two of this two-part series. References and sources can be found online at www.ncpa.org/pub/ib108, while Burnett blogs about environmental issues and more at www.environmentblog.ncpa.org. For more information, please visit www.ncpa.org.

Advertisement

Share This Story

X
You may login with either your assigned username or your e-mail address.
The password field is case sensitive.
Loading