This summer, the Senate subcommittee on energy issues held a hearing on legislative proposals aimed at setting new federal policy on the extraction, recycling and research for many materials, including rare earth elements, that are critical to the manufacturing of many modern energy and communications technologies.
Critical Minerals Policy Act of 2011″ would aggressively jump-start and direct federal policy on 1) assessing U.S. reserves of rare earths, lithium and helium, among others, 2) on prioritizing which of these materials are subject to the greatest supply risk and essential to U.S. economic activity, including manufacturing, and 3) reasonable acceleration of the permitting process for establishing new mining, and 4) launching new research and development into recycling of used products that contain critical materials, potential alternative materials, and more parsimonious use of current supplies.
Rare earth metals with strange sounding names like dysprosium, terbium, neodymium, europium, yttrium and lanthanum are a class of 17 chemical elements that play a critical role in modern technology including cancer treatment, cruise missiles, iPods, flat screen TVs, hybrid cars, wind turbines, solar panels and oil refineries to mention some applications
China is currently the dominant miner, processor and supplier (95-97%) of rare earth materials to the world and that the U.S. needs to be taking measures to re-establish a domestic supply chain for rare earths.
In 2010, the Chinese clamped down on quotas that had been in place for years. Those quotas limited both the amount of rare earth that companies in China could make, and the amount that could leave China, Chinese officials began to realize that reserves were being depleted, and so production quotas were established to prolong the period over which ore would be available. In our opinion, however, the Chinese also realized the truth, that availability of rare earths provides a competitive advantage, and since the Chinese did not want to try to outbid Western buyers of rare earths for their own materials, the ministry in China introduced an export quota system.
In electronics, large volumes of waste are providing only small quantities of material. This hinders the recovery of metals such as tantalum from circuit boards.
Another factor to consider is whether it’s produced as a by-product of much larger base metals, such as tellurium from copper, and consequently has a negligible impact on the profits of miners.
The Chinese have 34% of the rare metals, but are currently 97% of the supply. The United States does not lack most of these elements in significant quantities. Recent United States Geological Survey reports show that non-Chinese and U.S. sources of supply comprise roughly half of global rare earth reserves. Those reserves could provide enough rare earth ore in the United States to supply our domestic industry, if plans are executed to mine and separate those materials and to process them into the phosphors, metals, alloy and magnets needed by U.S. industry.
The United States was once the world’s top producer of rare earths with California’s Mountain Pass Mine leading the way. However, this mine ceased operations in 2002, because of years of low prices for rare earths and the expiration of its environmental operating permits after a series of spills of mine tailings that contained traces of radioactive uranium and thorium.
Now, some rare earths such as lanthanum and cerium typically make up 25% to more than 50% of the typical deposits. They are not rare in any sense, and have historically sold for roughly USD$3-$5 per kilogram, in a very pure form. But the quota system that was drastically tightened in 2010 treated all rare earths equally, so a buyer that wanted a tonne of cheap cerium oxide to polish glass had to compete directly with a buyer who needed a tonne of highly purified europium oxide to use in microscopic quantities to make high-power white LEDs. A general lack of quota raised the price of all rare earths, but the lightest and most common rare earths saw the most dramatic price increases.
Catalyst makers such as W.R. Grace use lanthanum in products that improve the efficiency of petroleum refining, called FCCs. Grace management has publicly stated that, at what they were paying for lanthanum, their new rare-earth-free FCC formulations were cheaper for customers and still made more money for Grace.
Automobiles such as the Toyota Prius have been incorporating compact, lightweight and efficient electric motors using magnets made with boron, iron and a rare earth called neodymium in their hybrid vehicles for some time. However, Toyota also recently revealed that their new RAV4 Electric would be made using a drive train designed by Tesla Motors that uses a motor design containing no rare earths. It is possible to build such motors, but in private almost every automotive engineer will admit that a motor design using rare earths is lighter, smaller, more efficient and actually less expensive on a system basis at even the highest prices of neodymium we have seen. The real problem is that with Chinese quotas in place, not being sure you can purchase the materials means that you cannot use them in your design. Give the automobile designer guaranteed access to rare earths, though, whether they come from China or not, and you will see them readopt rare earths.
A three mega-Watt wind turbine generator can use two tonnes of magnet, and that is a lot of material if you are not sure you can source it. And wind companies widely acknowledge that if the price of neodymium rises to near $100 a kilogram, it is no longer economic for them to consider its use. At its peak price not that long ago, neodymium was selling for $300 per kilogram. Make it available and make it cheaper, and wind turbines will be a serious long-term consumer of rare earths.
The five minerals are medium and heavy rare earth elements of which China mines an estimated 96 percent to 99.8 percent of the world’s supply: dysprosium, terbium, neodymium, europium and yttrium.
Dysprosium, which helps rare earth magnets preserve their magnetism at high temperatures, is mined almost exclusively in southern China and sells for $95 a pound in China and $135 a pound outside, including the export tax.
Dysprosium has emerged as the mineral most vital to clean energy industries yet most vulnerable to supply disruptions, the report said.
That has prompted Hitachi Metals, the world’s top high-powered magnet maker, to contemplate moving production of its neodymium-based magnets to China and the United States, where a massive rare earth mine is set to reopen in 2012. The number-one LREE is neodymium, which is used in the neodymium-iron-boron magnet, a permanent magnet technology. Neodymium-iron-boron magnet technology has allowed for miniaturization of a lot of high-end electronics. It has literally made everything smaller, thinner and lighter. Consumers just love the fact that their iPad is so thin now. People talk about the operating systems and the processing speeds and all their applications, and they love them. They wouldn’t have any of this without the neodymium-iron-boron magnets.
Neo Material Technologies, a Canadian rare earth company that operates in China, has started up a joint venture inside China with one of its Japanese customers to produce a rare earth-based glass product.
Showa Denko KK, a top rare earth alloy producer, recently announced it would boost output at its Chinese joint venture by 50 percent to 3,000 tonnes a year, upsetting Japan’s trade ministry.
“Mobile phones contain copper, nickel, silver and zinc, aluminum, gold, lead, manganese, palladium, platinum and tin. More than a billion people will buy a mobile in a year — so that’s quite a lot of metal. And then there’s the neodymium in your laptop, the iron in your car, the aluminum in that soft drinks can — the list goes on…
Some are plentiful, but only found in rare places or are difficult to extract. Indium, for instance, is a byproduct of zinc mining and extraction.
The primary use for REEs for a long time was the europium in color TV sets. Molycorp, which was supplying much of this demand, had decades’ worth of used tailings sitting around doing nothing. The Chinese saw the potential of this market and spent a lot of time and money to build out uses for the other REEs mined alongside the europium.
Lanthanum will have a humongous industrial demand increase in petroleum refining. Oil and REEs are linked in this aspect. You will see a humongous increase as lanthanum is used very heavily in the refining process to crack heavy sour crude oil.
Cerium, which is used in car catalytic converters. Also, you’re going to see Molycorp bring on this XSORBX water filter, which combines cerium and nanotechnology. It’s the only filter that’s capable of removing pathogens and pharmaceuticals that the modern municipal water filtration systems cannot remove.