[LINK] Rare earth elements

stephen at melbpc.org.au stephen at melbpc.org.au
Sun Jan 3 17:50:11 AEDT 2010

Concern as China clamps down on rare earth exports

Neodymium is one of 17 metals crucial to green technology. There’s only 
one snag – China produces 97% of the world’s supply. And they’re not 

By Cahal Milmo  Saturday, 2 January 2010

Britain and other Western countries risk running out of supplies of 
certain highly sought-after rare metals that are vital to a host of green 
technologies, amid growing evidence that China, which has a monopoly on 
global production, is set to choke off exports of valuable compounds.

Failure to secure alternative long-term sources of rare earth elements 
(REEs) would affect the manufacturing and development of low-carbon 
technology, which relies on the unique properties of the 17 metals to 
mass-produce eco-friendly innovations such as wind turbines and low-
energy lightbulbs.

China, whose mines account for 97 per cent of global supplies, is trying 
to ensure that all raw REE materials are processed within its borders. 
During the past seven years it has reduced by 40 per cent the amount of 
rare earths available for export. 

Industry sources have told The Independent that China could halt 
shipments of at least two metals as early as next year, and that by 2012 
it is likely to be producing only enough REE ore to satisfy its own 
booming domestic demand, creating a potential crisis as Western countries 
rush to find alternative supplies, and companies open new mines in 
locations from South Africa to Greenland to satisfy international demand.

Amid claims that Beijing is using its rare earths monopoly as a tool of 
foreign policy, the British Department of Business, Industry and Skills 
said it was "monitoring" the supply of REEs to ensure China was observing 
international trade rules.

Jack Lifton, an independent consultant and a world expert on REEs, 
said: "A real crunch is coming. In America, Britain and elsewhere we have 
not yet woken up to the fact that there is an urgent need to secure the 
supply of rare earths from sources outside China. China has gone from 
exporting 75 per cent of the raw ore it produces to shipping just 25 per 
cent, and it does not consider itself to be under any obligation to 
ensure supplies of rare earths to anyone but itself. There has been an 
effort in the West to set up new mines but these are five to 10 years 
away from significant production."

After decades in which they were considered little more than geological 
oddities, rare earths have recently become a boom industry after the 
invention of a succession of devices, including iPhones and X-ray 
machines, which rely on their specific properties.

Global demand has tripled from 40,000 tonnes to 120,000 tonnes over the 
past 10 years, during which time China has steadily cut annual exports 
from 48,500 tonnes to 31,310 tonnes.

Worldwide, the industries reliant on REEs, which produce anything from 
fibre-optic cables to missile guidance systems, are estimated to be worth 
£3 trillion, or 5 per cent of global GDP.

Beijing announced last month that it was setting exports at 35,000 tonnes 
for each of the next six years, barely enough to satisfy demand in Japan. 
>From this year, Toyota alone will produce annually one million of its 
hybrid Prius cars, each of which contains 16kg of rare earths. By 2014, 
global demand for rare earths is predicted to reach 200,000 tonnes a year 
as the green revolution takes hold.

Nearly all of China's supply of rare earths comes from a single mine near 
the city of Baotou, in Inner Mongolia. The remainder comes from small and 
sometimes illegal mines in the south of the country, leading to 
devastating pollution from the poisonous and sometimes radioactive ores.

Environmentalists argue that this, coupled with widespread criticism of 
China's stance during the Copenhagen climate summit, adds to the need for 
a "plurality" of rare earth resources. One campaigner said: "There are 
legitimate questions over Beijing's control of these resources. 
Copenhagen showed they are not above putting national interest ahead of 
global efforts to curtail global warming."

Once extracted and refined, the rare earth metals can be put to a 
dizzying range of hi-tech uses. Neodymium, one of the most common rare 
earths, is a key part of neodymium-iron-boron magnets used in hyper-
efficient motors and generators. Around two tonnes of neodymium are 
needed for each wind turbine. Lanthanum, another REE, is a major 
ingredient for hybrid car batteries (each Prius uses up to 15kg), while 
terbium is vital for low-energy light bulbs and cerium is used in 
catalytic converters.

In October, an internal report by China's Ministry of Industry and 
Information Technology disclosed proposals to ban the export of five rare 
earths and restrict supplies of the remaining metals. Beijing strenuously 
denied that the document was an accurate reflection of its strategy, 
saying it had no desire to reduce trade in rare earths. But The 
Independent understands that the level of demand in China means that 
supplies of at least two crucial REEs – terbium and dysprosium – are 
likely to be curtailed by as early as next year.

Dr Ian Higgins, general manager of Birkenhead-based Less Common Metals, 
which specialises in rare earth products, said: "There is a threat that 
in the next 12 to 18 months, there might be some quite severe shortages 
of these rare earths. That is certainly going to impact those hi-tech 
green industries outside China."

Both Western countries and China are already dashing to secure new 
sources of rare earths. Last year, Australian regulators imposed 
restrictions on the purchase of one of the country's richest rare earth 
mines, causing a Chinese company to walk away from a £400m deal to buy 
its operator.

European and North American companies are meanwhile racing to open or re-
open mines in Canada, South Africa and Greenland amid calls in the US for 
government-backed loans to secure supplies of some REEs which are used in 
the guidance systems of missiles and laser-guided munitions. Toyota has 
effectively bought its own rare earth mine in Vietnam by signing an 
exclusive supply deal.

The Department for Business, Industry and Skills acknowledged the growing 
concern in Western capitals. A spokesman said: "We are monitoring the 
situation, particularly with regard to World Trade Organisation rules. We 
are working with UK industry to assess the long-term demand for 
strategically important resources, including rare earth elements."



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