Rare Earths Heat Up
Posted March 16, 2010 at 3:01 pm 
Filed in: This afternoon, the House Science and Technology Committee’s Subcommittee on Investigations and Oversight held a hearing on “Rare Earths and 21st Century Industry.” Though you may have never heard of rare earths, they are critical to a wide range of energy technologies, as well as a host of other applications. Without tiny amounts of these 17 elements that squat beneath the main section of the periodic table, we cannot build the magnets, lasers, fiber-optic cables, LCD screens, and batteries that are both ubiquitous and vital to modern life. Neodymium, for example, is a necessary input to the magnets that power wind turbines and the motors of electric vehicles.
Though rare earths are not, in fact, rare, they have proven to be rather hard to find in concentrations that can be mined economically. Once the world leader in rare earth research and production, the last U.S. rare earth mine at Mountain Pass, California closed in the 1990s.
Representative Bart Gordon (D-TN), Chairman of the S&T Committee, questioned whether we need to revive the Critical Minerals program, which was established in the early 1980s to warn Congress about potential supply shortages, protect strategic materials, and keep an inventory of those minerals on hand in order to mitigate a supply shock. In the 1990s, the program petered out as consensus grew that the market could handle rare earth supply without government intervention. Today’s hearing suggested that this may not be the case.
Molycorp, a chemical company led by Mark Smith, hopes to revive Mountain Pass and establish a domestic source of at least 9 rare earth elements. He also plans to build facilities to process the rare earth oxides all the way to magnets – a capability that currently does not exist in the United States. In his testimony, Smith argued that three factors have combined to create a rare earth perfect storm: “1) the indispensability of rare earths in key clean energy and defense technologies; 2) the dominance of rare earth production by one country, China, and 3) China’s accelerating consumption of their own rare earth resources, leaving the rest of the world without a viable alternative source.”
Much of the production process for electric vehicle batteries must occur in China. Deng Xiaoping, China’s former Premier, said in the 1990s that, “There is oil in the Middle East; there is rare earth in China.” A strategic rare earth plan developed under Deng and more recently executed under Hu Jintao has led to complete Chinese domination over today’s rare earth market. By some estimates China now produces more than 97% of the world’s rare earth supply, almost 100% of the associated metal production, and 80% of the rare earth magnets.
This situation is in part due to export constraints, according to testimony from Terence Stewart, managing partner at law firm Stewart and Stewart. Through a series of quotas and duties that are illegal under WTO rules, China has forced battery producers to locate in China. Stewart advocated for an immediate trade action against China through the WTO – a process that may take two years.
According to Mr. Smith, however, we don’t have that long. He expects that rising Chinese demand is far outpacing production increases, creating a major supply crunch around 2012. The forecasted production gap of around 60,000 tons will generate skyrocketing prices. Conveniently, the Mountain Pass mine can be up and running by mid-2012 at a production rate of 20,000 tons annually.
Dr. Karl A Gschneidner, Jr., Professor of Materials Science and Engineering at Iowa State University, runs a small, DOE-funded rare earth research operation in Ames, Iowa. In his testimony, he advocated the establishment of a large, federally funded research center at an educational institution dedicated to rare earth studies. With support from industry, the new center would be able to compete in rare earth technology innovation with the large Chinese research centers. Gschneidner and the other witnesses agreed that if the United States is going to hold its own in the future of energy production, it will be through technological innovation.
Previous Post
May 14, 2012
May 11, 2012
May 4, 2012
