Rare earth elements aren’t the secret weapon China thinks they are https://www.theverge.com/2019/5/23/...a-production-america-demand-trade-war-tariffs Despite the name, rare earths just aren’t that rare By James Vincent May 23, 2019, 12:04pm EDT America’s trade war with China has been quietly escalating for years, but this week it took a turn for the disastrous. Huawei, once the rising star of China’s tech industry, has been cut off from US suppliers, leaving the company effectively stunted. China is likely to respond somehow, but with a multitude of options on the table, many in the tech industry are now considering nightmare scenarios. Rare earth elements are crucial for high-tech manufacturing One particularly chaotic option would be a ban on the export of rare earths — raw materials that are crucial for electronics. These elements are produced mostly in China, and used in the US for everything from electric cars to wind turbines, smartphones to missiles. Chinese state media have backed the idea, calling America’s dependence on Chinese rare earths “an ace in Beijing’s hand.” President Xi Jinping hinted at that possibility when he visited a rare earth facility at the beginning of this week. (As a ministry spokesperson commented with what seemed like a nod and a wink: “It is normal that the top leader investigates relevant industrial policies. I hope everyone can interpret it correctly.”) Rare earth elements are sometimes described as the “vitamins of chemistry,” as small doses produce powerful salutary effects. A sprinkle of cerium here and a pinch of neodymium there makes TV screens brighter, batteries last longer, and magnets stronger. If China suddenly shut off access to these materials, it would be like rewinding the tech industry back a few decades. And no one wants to ditch their iPhone and go back to a BlackBerry. Experts in the field, though, are much less concerned about such a chilling scenario. They say that while a restriction on rare earth exports would have some immediate adverse effects, the US and the rest of the world would adapt in the long run. “If China really cuts off supply entirely then there are short term problems,” Tim Worstall, a former rare earth trader and commodities blogger tells The Verge. “But they’re solvable.” Far from being an ace in the hole, it turns out rare earths are more of a busted flush. The reasons for this are numerous, and span geography, chemistry, and history. But the most important factor is also the simplest to explain: rare earths just aren’t that rare. A group of 17 elements, rare earths are what the USGS (United States Geological Survey) describe as “moderately abundant.” That means they’re not as common as oxygen, silicon, and iron, which make up the vast majority of the Earth’s crust, but some are on a par with elements like copper and lead, which we don’t consider exotic or scarce. Significant deposits exist in China, but also Brazil, Canada, Australia, India, and the United States. The challenge with producing rare earths (and the reason they were given their name) is that they’re rarely found in concentrated lumps. These are chemically sociable elements, happy to bond with other compounds and minerals and tumble about in the dirt. This makes extracting rare earths from common earth like convincing a drunk friend to leave a raucous party: a lengthy and harrowing procedure. “Once you take it out of the ground, the big challenge is chemistry not mining.” As Eugene Gholz, a rare earth expert and associate professor of political science at the University of Notre Dame puts it: “Once you take it out of the ground, the big challenge is chemistry not mining; converting the rare earths from rock to separated elements.” Unlike convincing that drunk friend, though, this process involves a series of acid baths and unhealthy doses of radiation. This is one of the reasons that countries like the US have been more or less happy to cede production of rare earths to China. It’s a messy, dangerous business, so why not let someone else do it? Other factors also helped, including lower labor costs and the existence of Chinese mines that produce rare earths as a byproduct. China’s sway in the rare earths market is a fairly recent state of affairs. Between the 1960s and the 1980s, the majority of the world’s supply was actually produced in America, from the Mountain Pass mine in California. The mine’s processing plant was shut down in 1998 after problems disposing of toxic waste water, and the whole site was mothballed in 2002. It’s only from the 1990s onward that China has shouldered the bulk of production, along with the associated environmental costs. (In 2010, the Chinese government estimated that the industry was producing 22.05 million tons of toxic waste each year.) An oft-referenced figure is that China now produces some 95 percent of the world’s rare earths, but Gholz says this statistic is “wildly out of date.” The USGS pegs China’s part as closer to 80 percent. That’s still a substantial chunk of the world’s supply, though, and with no doubt that these are important commodities, the question is: what happens if China does cut off the US? Luckily, we have a very good idea of what would happen next because it’s already happened before. Back in 2010, China stopped exports of rare earths to Japan following a diplomatic incident involving a fishing trawler and the disputed Senkaku Islands. Gholz wrote a report of the fallout from this incident in 2014, and found that despite China’s intentions, its ban actually had little effect. Chinese smugglers continued to export rare earths off the books; manufacturers in Japan found ways to use less of the materials; and production in other parts of the world ramped up to compensate. “The world is flexible,” says Gholz. “When you try to restrict supplies to politically influence another country, people don’t give up, they adapt.” He says that although his report examined the rare earth industry as it was in 2010, the “conclusions are pretty much the same” in 2019. If China did turn off the rare earth tap, there would be enough private and public stockpiles to supply essential sectors like the military in the short term. And while an embargo could lead to price rises for high-tech goods and dependent materials like oil (rare earths are essential in many refining processes), Gholz says it’s highly unlikely that you would be unable to buy your next smartphone because of a few missing micrograms of yttrium. “I don’t think that’s ever going to happen. It just doesn’t seem plausible,” he says. Even though a ban on rare earth exports is just speculation at this point, companies have begun to preempt any new Chinese restrictions. American chemical firm Blue Line Corp and Australian rare earth miner Lynas have already proposed new production facilities in the US, and rare earth stocks around the world have surged in response to the threat. In the event of a ban, one of the most important backstops would be America’s Mountain Pass mine. Although the mine was closed after Chinese rare earths drove down prices, the facility is intact and resumed production last January. Recent estimates suggest it’s already supplying one-tenth of the world’s rare earth ores (though not their processing), and in the event of an embargo, it would be possible to bring Mountain Pass back up to speed. “By far the cheapest and fastest way to bring more material into the market — if there was a disruption — is just sitting there in California,” says Gholz. “It’s not like starting from scratch.” Worstall agrees: “Producing rare earth concentrate is near trivially simple,” he says. “I, or any other competent person, could produce that from a standing start within six months in any volume required.” The kicker, both say, is how much that process might cost. Especially as any refining and separation plants built in the US would have to meet far higher environmental standards. As we’re seeing with Huawei and other casualties of Trump’s trade war, the real question isn’t whether adaptation is possible in the future, it’s how much pain you can stomach in the present.
From Asia Times, May 28, 2019: The Japan Option "But the mid-term is full of more opportunities for the United States and the Trump administration has a chance to set the stage. The best chance is to partner with Japan. Japan has discovered huge deposits of rare earth materials at Minamitori Island (Minami-Tori-shima), about 1,150 miles (1,850 km) southeast of Tokyo. The estimate of the Minamitori deposits indicates that there is enough yttrium to meet the global demand for 780 years, dysprosium for 730 years, europium for 620 years and terbium for 420 years. US policymakers could seek a partnership with Japan in commercializing Minamitori’s rare earth resources and arranging assured supplies for defense and vital commercial applications. Indeed, it is too bad that President Trump and Japanese Prime Minister Shinzō Abe didn’t address the subject in their recent meeting in Tokyo. But the president probably was not encouraged by the US bureaucracy, which has – largely for political reasons – been sitting on its hands and not moving the rare earth issue forward. Yet the opportunity is there if the US and Japan consider the national security and supply issues objectively. In short, there is a short-term and mid-term opportunity to end US dependence on China and assure US national security requirements for rare earth materials."
China's Rare Earth Metals Aren't the Trade War Weapon Beijing Makes Them Out to Be May 29, Fortune Magazine China has a stranglehold on rare earth supplies. It could use that to throttle the U.S. That was the thinly-veiled threat President Xi Jinping sent during his first domestic trip since trade negotiations imploded this month. Flanked by his chief negotiator, Vice Premier Liu He, Xi took a tour of a factory in Jiangxi province that spins rare earth elements into permanent magnets—the type used in electric cars, wind turbines, and even guided missiles. Rare earths—there are 17 in all—are vital to much of today’s tech with uses in every segment from consumer electronics to national defense. Despite their name, however, rare earths are not rare. According to the United States Geological Survey, the ores are roughly as common as those of copper or lead. But, because rare earth ores oxidize quickly, extracting the vital metals is both difficult and extremely polluting. China, aided by its low labor costs and lax environmental regulations, became the dominant force in the rare earth market during the 1980s, surpassing the U.S. China, which sits on close to 40% of global rare earth deposits, produces 120,000 metric tons of rare earth a year, or roughly 80% of the global supply. For comparison, Australia, the world’s second largest supplier, produced just 20,000 metric tons last year. Following Xi’s visit to Jiangxi, the nationalistic Global Times called rare earths “an ace in Beijing’s hand,” and on Tuesday the National Development and Reform Commission, China’s economic planner, raised the prospect of weaponizing rare earths. On Wednesday, the Party’s mouthpiece paper, the People’s Daily, thundered in an article about rare earths: “Don’t say you haven’t been warned.” Beijing has weaponized its dominance in the rare earth market before. In 2010, when China and Japan clashed over ownership of islands in the East China Sea, Beijing halted shipments of rare earths to its rival, disrupting supply lines for major manufacturers like Toyota and Panasonic. But Beijing emerged weaker for it. The blockade was enough to alert the rest of the world to China’s unchecked power over the precious minerals. A coalition of countries led by the U.S. appealed to the WTO which, in 2014, ruled that China can’t put limits on rare earth exports. That year, an article published by the Council on Foreign Relations, a U.S. think tank, said “even in the apparently most-dangerous case of rare earth elements, the problem rapidly faded.” What China can do Beijing sets a quota for rare earth production twice a year. In the first half 2019, the cap was placed at 60,000 tons—up from 45,000 the preceding half. “If China wanted to reduce exports of rare earths, the logical step would be to lower the mining quota,” says Helen Lau, a metals and mining analyst at Argonaut Securities. Quotas for the remainder of the year are due in June and will be the first indicator of whether authorities are making good on their threats. Beijing could claim to be lowering the quota for environmental reasons, Lau says, and a lower quota would naturally reduce the amount of rare earth available, which would limit supplies and increase costs for the U.S. But even this approach carries risk: a reduced quota limits supplies for China’s more significant customers too. The U.S. imports 80% of its rare earth needs from China, but overall demand for rare earths in the U.S. is low. American demand accounted for just 4% of China’s rare earth shipments, totaling around $160 million in 2018. Partly, that’s because most U.S. manufacturers that require rare earth metals have already moved to China. America’s remaining industries tend to import finished rare earth products, such as magnets, which are a trickier target for China to hit. If China limits the export of finished components, the impact would affect China’s domestic industry first. That might be a sacrifice Beijing is willing to make, but it would be a peculiarly forward approach. Beijing prefers indirect measures that afford the government deniability— the recent halt of Canadian canola imports due to a phantom pest infestation is proof. However, the fiery rhetoric of China’s state media suggests Beijing might be desperate enough to forego pretenses. There’s ore in them thar hills Meanwhile, the U.S. is seeking alternative supplies. At a site called Mountain Pass in California’s San Bernardino county, the only rare earth mine in the U.S. is back in operation. Once the world’s leading supplier of rare earths, today the mine simply ships unrefined ore to China for final processing. A conglomerate called MP Materials bought the mine in 2017 after the site’s previous owner, Molycorp, filed for bankruptcy, beaten on prices by China’s competitiveness. The consortium, which includes a Chinese shareholder, says it will re-open the mothballed processing facilities at Mountain Pass next year so that the mine can extract rare earth metals at home. It’s a move expedited by the trade war. Beijing slapped 10% tariffs on ore imports last year and is set to increase them to 25% on June 1. The mine’s CEO, Michael Rosenthal, has said MP Materials will focus on extracting higher-value ores to avoid following its predecessor, Molycorp, into bankruptcy. MP Materials will still need to contend with competition from China and strict environmental regulation from California. However, if China blocks rare earth exports, MP’s main competition disappears. Down south, Texas chemical manufacturer Blue Line Corp and Australian miner Lynas are also in talks to open a rare earth processing plant and, earlier in May, a bipartisan group of lawmakers introduced legislation to safeguard U.S. mineral supplies. Meanwhile Japan discovered a treasure trove of rare earths that could supply the earth on a “semi-infinite basis.” Loosening China’s grip on the industry will take time and money, but there’s a compelling incentive to do so, especially as China threatens to be an unreliable supplier. Blocking rare earth exports—again—might well be a ‘nuclear option’ for China, but Beijing could suffer the fallout.
Processing rare earths is horrible for the environment. Exponentially worse than, say, cyanide leaching of gold. Yes, we can produce them here, but we may kill the redwoods in the process.
Solar Panels can be killing the Redwoods with toxic leaching of Lead, Chromium, and Cadmium. The things have a finite lifespan [nobody warrants them for longer than 20 years] and nobody has a plan to dispose of them properly. In 2016 Japan warned that they were producing 800,000 tons of solar panel waste per year and had no plans in place for dealing with them - and solar panels are not easy to recycle. And California has skads of them. And at present California has no laws on the books for dealing with solar panel disposal. None. And no laws on the books for dealing with Electric Vehicle battery packs. None. Amazing. https://www.theverge.com/2018/10/25...-waste-chemicals-energy-environment-recycling https://www.forbes.com/sites/michae...hey-produce-so-much-toxic-waste/#12a3f351121c And of course all the toxic heavy metals and toxic acids used to manufacture and recycle batteries for solar and wind power storage are considerable as well. And nobody has a law on the books for dealing with EV batteries at present.
Looks like we should be investing in companies that deal with disposal of batteries, solar panels and toxic waste in the USA.