Everyday, people rely on rare-earth elements - from lighter flint to the electric motor in their cars - which play an integral part of national security technologies and consumer products. These metals also play an essential role in national defense applications and products.
Metals play an essential role in energy transition, leading some experts to dub them "strategic metals." This article looks ahead at their future.
Rare earth elements (also referred to as the lanthanides) are silvery-white soft heavy metals found in low concentrations in Earth's crust and hard to separate from other minerals due to their similar atomic structures, making them nearly indistinguishable from one another. These 17 elements are fundamental for many applications and will play an essential part in many industries. Magnets are widely utilized in high-tech electronics such as cell phones and lasers; batteries for electric/hybrid vehicles, rechargeable batteries and wind turbines; magnets used in computer hard drives, laptops and printers; as catalysts in air pollution control/oil refining operations/phosphor lighting technology as well as polishing compounds used to polish optical-quality glass surfaces; they play an essential role in national security by producing weapons, missiles and nuclear energy production.
China held an almost exclusive grip on rare earth metal production until recently. Their mining and processing facilities dominated globally, allowing China to increase prices by hundreds of percent for some minerals. Companies reliant on rare earths for their products turned elsewhere or reduced usage but struggled to break even due to high costs for alternatives used as replacement materials, leading them to quickly run out of steam in demand for rare earths caused by China's exorbitant prices.
In 2012, China finally relented under World Trade Organization pressure and loosening export quotas and prices fell back down to their 2009 levels. Mining operations at Molycorp's Mountain Pass Mine resumed that year while China Non-Ferrous Metal Mining Company purchased stake in Lynas Corporation - an Australian firm with one of the highest outputs outside China - as China Non-Ferrous Metal Mining Company held on to their stake.
But sustainable and socially fair production of rare earth metals remains a difficult challenge, due to an extraction process which is both energy-intensive and produces significant waste products. To make rare earths profitable for businesses, they must use them in various products while recycling when possible.
Rare earth elements might give off an impression that they're scarce in nature, but in actuality these elements are plentiful. Their name refers to a group of 15 lanthanides plus scandium and yttrium; their extraction requires high temperatures, long processing times and specialist equipment.
Rare earths had long been extracted from just a few types of minerals. Once mining began, demand skyrocketed as people sought products using them such as high-powered magnets; at the same time, environmental concerns spurred interest in renewable energy sources.
Price fluctuations led to an extraordinary surge in rare earth prices. Companies and governments began searching for solutions to supply issues, with some suggesting opening the Amazon rainforest up for mining or even retrieving resources off ocean floors or the Moon; Molycorp invested $500 million in pollution controls at Mountain Pass Mine in California before reopening it in 2012.
At the same time as China was ramping up production of rare earths, they began restricting exports in order to guarantee supply for domestic manufacturing - this caused international trade disputes and led Japan, the US, and EU member nations to file complaints at WTO.
One country holds almost all of the world's reserves for rare earths metals and, should it decide to restrict sales, this could quickly dry up their supply and skyrocket prices - as occurred when China restricted exports in 2010.
Mining companies see rising commodity prices as an opportunity, and attempt to diversify their sources of supply by opening new mines - however this process can take years.
Researchers are exploring new methods and technologies for producing rare earths. One option would be recycling metals; when done effectively, recycling could save costs while also creating an environmentally-friendly image for manufacturers. Another possibility involves mining rare earths from waste from power plants and coal mining operations or extracting them directly from thorium-based nuclear reactors.
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Rare earth elements are scattered thin across Earth's crust, making their extraction difficult and time consuming. Furthermore, they often form complex mixtures with other minerals that make mining and refining costly and time consuming endeavors.
Prior to the 1970s, rare earth element production primarily took place in India and Brazil. After this point in time, China mines emerged as primary producers from monazite deposits with rare earths bearing monazites deposits containing monazites bearing rare-earth elements. China's dominance in this industry was reinforced with their return into global trade in 1978 as well as Deng Xiaoping's efforts of turning China into a manufacturing powerhouse.
U.S. imports of rare-earth metals have reached 100%, with China accounting for 8 out of every 10 imports. This trend is particularly evident for "heavy" rare-earths like terbium and dysprosium used to produce permanent magnets that withstand high temperatures; and for samarium used in aerospace/defense applications.
Recently, rare-earth mining operations in Australia and the US have ramped back up, while exploration efforts across other continents continue. Unfortunately, however, most of this material had to be shipped back to China for refining and separation processes.
MP Materials has recently spent two years building one of the first rare-earth refineries in the US, which will eliminate this costly and time-consuming step in production. While its full operation won't begin until 2023, production should commence before then.
At present, however, the United States will depend heavily on China as its source of rare-earth metals. Although China holds relatively limited reserves compared to its rival nations such as Vietnam or Brazil, they account for nearly 36% of known rare earth resources and are the top producer of refined rare earth metals, giving China significant pricing and distribution power compared with lesser producers like Vietnam or Brazil that may develop mineral reserves in future but haven't established themselves as significant producers yet.
Rare earth elements are scarce due to supply and demand dynamics. Because their minerals occur in low concentrations that are difficult to separate from each other, mining them requires significant energy use as well as waste creation. As a result, most rare earth elements are produced via concentrated ore sources which require costly processing in order to extract their metals; expanding production or creating jobs depends on this cost-cutting measure.
Many countries worry about the security of their rare earths supply chains. A shortage of minerals could delay technological progress or even derail industrial policies, so governments and companies invest in building strategic reserves of ore or creating separation facilities capable of producing enough purified rare earths to fill short-term gaps in supply.
Companies that rely on metals, particularly China, attempt to diversify their sources by investing in technologies that use less precious elements for batteries; others try to entirely avoid using such resources by recycling old batteries and electronics.
Due to their high mining costs, rare earth elements' prices tend to be highly unpredictable and prone to sudden spikes and dives. Over the past decade, for instance, an ongoing fishing boat dispute that caused China to institute an embargo led to metals prices increasing by several hundred percent before gradually returning back down again.
As prices surge, investors rush in to take advantage of this boom. But this excitement quickly dissipates as lack of new sources of production and rising demand drive prices back down towards their 2009 lows. Once rare earth demand fades away, companies like Molycorp and its Mountain Pass mine acquirer stop investing in operations; instead sending their ore to China for final processing while only a handful of producers remain.