The major concern with these minerals is that they are mainly produced in China, as it is currently producing 97% of the worlds supply of them. There is great concern now as China has indicated it will reduce export quotas by 30% in 2011, which immediately follows a 72 percent reduction for the second half of 2010. Japan has been hard hit by China with a REEs ban on exports to Japan over a border dispute. The primary concern for this latest development is that with supplies being tightened up, the price of these elements and all the products they are used in will rise significantly in price.
As of now, several companies are ramping up production elsewhere, as Molycorp Inc., the top U.S. rare earth producer, and once the worlds largest until price drops forced them to close facilities at their California mine, is again ramping up again and hopes to start next year to produce 20k metric tons of these REEs by late 2012, and in comparison, China is producing roughly 120k tons this year. There still are major political concerns as Berlin, Washington and Tokyo are becoming concerned over the issue. Prices are now 8 to 15 times higher than prior to the July export quota was imposed by China. Some elements that are paramount to the green technology movement appear to be completely unavailable.
There is great concern as demand with these new green technologies is growing as is the need for these elements, and that it will slow down the green movement so to speak, if not stop it dead in its tracks as there is an expected 40,000 ton shortfall annually in supply in the next 5 years. Some argue it is a major concern, and others argue it isn’t as big a deal as we think it is. With a fragile economy as it is, the price jump in many tech and green items could deliver another blow to us, and to green tech as this crisis continues. In retrospect, don’t put all your eggs in the same basket, or that is, don’t depend solely on one supplier for a product so critical to our technological advances towards a greener world.
The REEs consist of a group of 17 elements which are somewhat buried in the middle of the periodic table, with the first being discovered in 1787, and in the 1940’s they remained a curiosity of chemists. As a chemist from the US, Frank Spedding then discovered how separate and purify them, their unique usefulness began to emerge. Again, these elements aren’t hard to find or come by, nor are they on the verge of total exhaustion, they are as abundant as tin and nickel, but the problem is they are hard and expensive to mine and extract. Global estimates from the USGS puts total global reserves of them at 99 million metric tons, with China having roughly 36 million metric tons, the US with an estimated 13 million metric tons, and many more deposits across the globe.
There are several options we have, one of which is to ramp up our own production again, increase imports from other REE exporting nations. This has been an issue which has been looming over us for the past decade, and is our leaders fault for not having the foresight to address this issue when it was first discovered. With both Obama and China positioning themselves as the world’s leader for alternative energy technologies, this is a critical issue for Obama , the US, and others in the move to make life greener. Some suspect that China’s restrictions on exports may be in response to the US investigation into whether or not China is breaking the WTO rules by restricting clean energy imports and subsidizing its clean energy exports. Europe also is suffering, and Germany also relies heavily on these materials with it’s high tech export driven economy, and is appealing to the WTO and the European Commission about the situation. This could end up like the oil embargo of the ’70’s, and we should never have let ourselves fall into this situation in the first place. The ethics of this situation is just bad all-around, as all involved have dropped the ball so to speak and made some fundamental mistakes in the handling up to, and leading to this crisis.
This situation can actually be a good thing, as it will make us look for and actually implement other options in our quest for these elements. There are new efforts to ramp up production in other areas worldwide, and invest in some recycling facilities and operations for these materials. Molycorp is one of a number of companies that are as we speak, scrambling to amp up production and begin producing rare earth elements, or green minerals as they are now referred ti as, as soon as humanly possible. Another company, Rare Earths Inc, is also ramping up their production of rare earth minerals to meet domestic demand at least. So don’t fear my friends, we might suffer for a bit in the short term, but will come out of this green crisis okay and better off than before. And let this be a reminder to us all, don’t put all your dependence for rare earth elements into one nation or supplier!