Slightly Less Rare Earths

Toward the end of 2010, we saw several items in the news about a potential shortage of the chemical elements known collectively as rare earths.  (The rare earths are the elements that lie in the periodic table from Lanthanum [La], atomic number 57, to Lutetium [Lu], atomic number 71, plus Scandium [Sc], atomic number 21, and Yttrium [Y], atomic number 39. )   These are used, typically in relatively small quantities, in a variety of technologies, including wind turbines, DC electric motors, and solar cells.

Up until the 1980s, there were a number of places where rare earths were mined, with the United States and South Africa being the largest suppliers.  China then commenced a major push into the market, offering lower prices because of its lower labor costs, and its lax-to-nonexistent environmental regulations — producing rare earths is a a dirty business.  The Chinese eventually came to supply 95+% of the market.

There was a certain amount of alarmist talk at the time about the strategic threat posed by China’s control of the supply of these elements.  I wrote at the time that I thought these fears were a bit overblown, since there were other sources, which had fallen out of favor only because of China’s cheap prices.

…  it seems likely that the main risk is a short-to-medium term run-up in prices, until alternative sources are fully operational.

As it happens, there also some alternative technologies, some quite mature, that can be used as substitutes for newer tech requiring rare earths.

An article posted on the “Wired Science” blog at Wired provides an update on the situation with the rare earths supply at present.  The US, the EU, and Japan have filed a joint complaint with the World Trade Organization against China, alleging manipulation of mineral prices.

Foreign companies buying rare earths from China must now pay more than twice the rate paid by companies inside China. The tiered pricing encourages companies to move factories and jobs to China, where they can be sure of supply and lower prices. Beyond the extra economic boost for China, this has made it easier for Chinese companies to steal foreign intellectual property.

As expected, there has also been some considerable progress in developing alternative sources of supply.  Molycorp Minerals has re-opened its mine in Mountain Pass, California, once the largest source of rare earths in the world; another new mine is being opened in Malaysia.  So it seems likely that, within a few years, we will return to a world of competing suppliers, in which no one can completely control the market.

“In five years there will be rare earths produced all over the world and China will lose its edge,” said mining analyst John Kaiser, editor of Kaiser Research Online. “Molycorp is part of that equation. They’re putting back into production what was once the largest rare-earth mine in the world.”

It is also heartening that, at least in the US, the revitalized facilities seem to be making progress in addressing some of their nastier environmental side effects.

Comments are closed.

%d bloggers like this: