Energy, Security and Rare Earths
Posted August 4, 2010 at 1:30 pm 
Filed in: Rare earth elements (REE) are a collection of seventeen chemically similar metallic elements (scandium, yttrium and the fifteen lanthanides), forming the largest chemically coherent group in the periodic table. Due to their versatility, rare earths have acquired a high level of economic, technological and environmental importance over the past several decades.
The REE are heavily used in the production of clean energy technologies including, solar panels, wind turbines, high-efficiency light bulbs, electric motors and advanced automotive propulsion batteries. In particular, dyprodium has gained significant importance lately for its use in the construction of hybrid car motors. Also, REE are essential for many modern security and defense devices, high technology applications in computing, oil refining, power generation and communications.
The number of exploitable REE deposits is harshly limited by the geochemical properties of such metals; most of the world’s supply of REE comes from only a handful of sources. The highest concentrations are in Inner Mongolia (China), Mountain pass (California), and Mount Weld (Australia). However, the much lower labor and regulatory costs in China, as well as the favorable number and size, turned Asia’s giant into the producer of about 97 percent of the world’s REE. In fact, operations at Mountain Pass were shut down in 2002 due to both environmental issues and competition with China, whose production of REE drove down prices. The United States has since become dependent on China to satisfy its need for REE.
In the past year China’s ability and willingness to export REE has eroded, due to the growth of domestic demand, the enforcement of environmental laws and the decrease of mining permits. On September 2009, China announced plans to reduce its export quota to 35,258 tons per year for 2010 to 2015, which is about 40 percent less than the 50,145 tons exported in 2009. Also, in July 2010 China’s Ministry of Commerce raised the possibility of an additional 72 percent cut in export quotas for the second half of the year.
“Reduced supply from China will trigger other rare earth producers to boost production to fill the gap”, Liu Aisheng, director of the Chinese Society of Rare Earths, said. Australians anticipated such possibilities quickly enough and, once their Mount Weld mine becomes fully operational (it plans to start operations by 2012), they will be capable of supplying up to 20 percent of the global market for 30 years. Also, if reopened Mointain Pass mine could produce 20,000 tons of rare earth oxides per year, which is about a third of the gap between China’s production and global demand. Other sources of REE have been discovered in Brazil, Canada and South Africa, but they are yet to be shown to be economically viable and their size and quality might not have a significant impact to global supply. Thus, large increases in supply are not expected to be immediate, and there is growing concern about a looming REE shortage.
China’s dominance of REE markets raises important supply issues for the United States. The fact that we do not currently maintain any strategic reserves of REE compounds, metals or alloys makes us very vulnerable in the short-term, and a long-term shortage of REE would force significant technological changes (the United States has lost the necessary REE refining capacity, and some estimate that rebuilding the supply chain may take up to 15 years).
Both the Senate and the House introduced legislation (S. 3521 and H.R. 4866) addressing the problem; these bills authorize the Energy Department to issue loan guarantees for REE projects, among other things.
“All those hybrid and electric cars, wind turbines and similar clean tech innovations may count for nothing if the U.S. cannot secure a supply of rare earth minerals. Ditto for other advanced telecommunications or defense technologies”, a group of scientists told a U.S. House subcommittee. One wonders if it is not time to acknowledge that REE should qualify as materials critical to national security.
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