China controls over 90% of rare earth mineral production

Michael Klare, in “The Race for what’s left” said the Chinese control up to 97% of the production of some of these minerals.

Byron King in China’s Leg Up in the Rare Earths Market writes:

“Basically, rare earths are exotic elements that are critical to the future of high tech, clean energy, Big Science and – oh by the way – national defense,” explains Byron King, editor of Outstanding Investments. “The list includes 17 elements like terbium, ytterbium, and yttrium.”

Now think about all the rhetoric you’ve heard about how “we” are going to transition to a high tech/clean tech future of solar panels, windmills, electric cars, smart grid, wired-world. Oh yeah? Problem is, most of these technologies simply WILL NOT WORK without large amounts of rare earths.

That is, the electric cars, wind turbines, solar panels, miniature electronics, smart grid, etc. will not get built in the US (or Canada, Japan, Europe, Australia, etc., for that matter) if industries cannot secure long-term supplies of rare earth minerals. And, oh by the way, that goes double for advanced defense technologies. For example, EVERY missile in the US arsenal uses some quantity of rare earths – every single one!

What’s the problem? In the past 15 years or so, the West closed down essentially all of its rare earths refining capability. The entire market (well, 97% of it) was conceded to the Chinese, for a lot of reasons – economic, wages, resource-base, environmental and much more. Now that the West wants to build out a different energy and technology future, the Chinese control critical substances from ore bodies through to final oxides and metals.

It’s as if somebody (the West) wants to set up a fancy, Napa Valley- style winery (new, clean, high tech), but doesn’t have any grapes (rare earths). This vintner-wannabe will have to buy the grapes from a producer in China. Do you really think that the Chinese will sell the guy the best grapes, and help him create a world-class brand of wine?

What do the Chinese say? They say that they’re just acting rationally. They’re closing down unsafe mines and controlling past environmental pollution. They’re consolidating the industry, as most other industries consolidate over time.

The Chinese say that they’re just encountering natural issues of depletion, from mining their ore bodies over the years. They say that they just don’t have “more” rare earths to export, because of natural economic and market forces.

Of course, the Chinese also say that if you move your factory to China, they’ll put you on an allocation for rare earths. You’ll have enough to operate. That is, you’ll have enough raw materials as long as you set up a joint venture with a Chinese firm and share all your technology. Of course.

Right now, there is NO publicly traded Western company that has a mine, refinery or plant up and running, let alone producing commercial amounts of rare earths for sale as usable end product.

Steve Gorman. August 30, 2009. As hybrid cars gobble rare metals, shortage looms. Reuters.

The Prius hybrid automobile is popular for its fuel efficiency, but its electric motor and battery guzzle rare earth metals, a little-known class of elements found in a wide range of gadgets and consumer goods. That makes Toyota’s market-leading gasoline-electric hybrid car and other similar vehicles vulnerable to a supply crunch predicted by experts as China, the world’s dominant rare earths producer, limits exports while global demand swells.

Jack Lifton, an independent commodities consultant and strategic metals expert, calls the Prius “the biggest user of rare earths of any object in the world. Each electric Prius motor requires 1 kilogram (2.2 lb) of neodymium, and each battery uses 10 to 15 kg (22-33 lb) of lanthanum. That number will nearly double under Toyota’s plans to boost the car’s fuel economy, he said.

Worldwide demand for rare earths, covering 15 entries on the periodic table of elements, is expected to exceed supply by some 40,000 tonnes annually in several years unless major new production sources are developed.

Among the rare earths that would be most affected in a shortage is neodymium, the key component of an alloy used to make the high-power, lightweight magnets for electric motors of hybrid cars, such as the Prius, Honda Insight and Ford Focus, as well as in generators for wind turbines.

Close cousins terbium and dysprosium are added in smaller amounts to the alloy to preserve neodymium’s magnetic properties at high temperatures. Yet another rare earth metal, lanthanum, is a major ingredient for hybrid car batteries.

 

12 Sep 2011. Testing Their Metals. Companies are searching for ways to reduce their need for increasingly scarce minerals. Tatyana Shumsky. Wall Street Journal.

China controls more than 90% of the global production of rare-earth metals, and the market suffered a severe shock last year when Beijing slashed export quotas to tighten its control over the sector. The move sent rare-earth metals prices sharply higher. For example, prices for lanthanum, a metal used in hybrid-car batteries, has surged to more than $160 a kilogram from just over $10 in early 2009.

Manufacturers of high-tech products from cellphones to jet engines rely on a steady stream of metals—some of them scarce—to make their goods. But with demand and prices for certain metals skyrocketing and supply interruptions threatening to stall production, some companies are scrambling to cut their usage.

The metals in question range from the truly rare, such as rhenium, to more abundant but hard-to-process elements such as rare-earth metals, a collective name for 17 minerals used in products like iPhones, the Toyota Prius, vacuum cleaners and energy-efficient light bulbs.

With enough time & money scientists can usually come up with a substitute for a specific use of a rare earth. But the minerals have so many varied uses that companies can’t afford to research them all.

 

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