Rare Earth Metals Regain Lost Luster
Fears are growing that China may limit the export of rare-earth metals. China accounts for 97% of the global production of rare earth metals, a majority of which are produced at the massive Bayan Obo mine in Inner Mongolia. By definition, REMs consist of scandium, yttrium, and the 15 lanthanoids. The Chinese government has tried to allay these concerns, however, as it is with many commodity, China is quickly turning from an exporter to a net importer to support its needs.
The popular green push hydrid cars and renewable energy is one of the driving forces in REM consumption. The pancake style synchronous motor sandwiched between the engine and transmission on hybrid cars uses neodymium iron-boron magnets. That’s a mouthful even for a German engineer, but a Mercedes S 400 Hybrid contains about half a kilogram (1.1 pounds) of neodymium. Neodymium magnets have magnetic fields that can 25 times greater than conventional ferrous magnets. The rule of thumb for wind turbines is that about 200 kg of neodymium are needed for each megawatt of electricity generated.
A study conducted for the German Economics Ministry concluded that demand for neodymium will increase by a factor of 3.8 by 2030, while demand for gallium, which is used in photovoltaics, will grow by a factor of six, according to report published by Der Spiegel. The Toyota's Prius uses a total of 40 to 60 lb of REMs. The bulk of that is lanthanum, which is used to make the nickel hydride batteries. REMs also play a crucial role as alloys in wind turbines and compact fluorescent light bulbs.
The U.S. was once the world leader in REM production, but low-cost exports eventually gave way to a Chinese monopoly. The U.S. and other industrialized countries have foolishly relied on the belief that natural resources would always be abundant and inexpensive. Even as it stockpiles its own mineral resources, China is systematically securing access to more resources worldwide.
Ironically, there should be no shortage. In reality, rare earths are not that rare. The most common, cerium, is more plentiful than copper. Unlike iron ore and other bulk commodities, they are difficult to separate and can be mined profitably only when found in high concentration. Western smelters were reluctant to invest in the technology needed to recover a REMs. China, with its cheap labor force and questionable environmental policies, can produce the mineral at relatively low costs.
Demand for rare earth metals has inspired a global hunt for the minerals. Already mining companies are revisiting idled and abandoned mine sites. This coming January, Denmark relinquishes sovereign control of Greenland, one of the world’s largest deposits of REMs will come into play again. Will we have enough to satisfy the green revolution?