Clean Tech: California Leads Rare Earth Digs

By Published On: April 11, 2014

Rare earth metals keep wind turbines, electric cars, and energy efficient technology spinning and humming. Yet, it’s only recently the U.S. began producing rare earths again at a mine in the Mojave desert. The mine’s production was largely idled in 1998 at a time when China was firmly on its way to becoming the dominant supplier of the metals. Reopening California’s Mountain Pass mine marks progress, according to a coalition of industries that rely on rare earths. But, it’s only the first of several steps needed to assure an open and competitive market for the materials so integral to the cleaner energy future. “More diversity in global supply lines is a good thing,” according to Jim Sims, vice president of Molycorp, operator of the Mountain Pass mine in the Mojave. China—the only nation mining rare earths in substantial quantities until recently—is down to supplying 85 percent of the worldwide rare earths metal market, said Sims. For at least a ten years before Molycorp reopened in 2013 and Australia began to ramp up production, China was the only significant supplier. Expanding the supply of rare earths is important because an increasing number of products—particularly clean energy technologies—include the metals. In 2013, for instance, rare earths were used in the U.S. to make $286 billion worth of products, according to an April 2 report by the industry coalition, known as the Rare Earth Technology Alliance. Companies that mine, process, and use rare earths launched the alliance in 2012 amid concern about a decline of the industry outside China, which still dominates the $5 billion/year worldwide rare earths production industry. The report notes that rare earths are used in magnets for electric autos and wind turbines, compact fluorescent and LED lighting, alloys used to lighten cars in order to reduce fuel consumption and greenhouse gases, batteries for storing electricity in electric and hybrid cars (and perhaps soon for the grid), and myriad other products. Clean energy applications are one of the fastest growing markets for rare earths, according to Kevin Swift, chief economist for the alliance. Within the clean technology category, growth in wind power and electric and hybrid cars—which use magnets containing rare earths—are the biggest sources of growing demand for the metals, according to Karl Gschneidner, chief scientist at the Critical Materials Institute at Ames National Laboratory in Iowa. Already, a fifth of the rare earth metals mined in the world are used to make magnets, according to Sims, and growing demand for light weight super-efficient magnets is driving growth in demand for rare earths. Magnets already account for 30 percent of the dollar value of rare earths sold, Sims added, and that’s expected to grow in the years ahead. Despite their importance, however, 90 percent of magnets with rare earth metals are made in China and Japan, according to Sims. To further enhance worldwide supplies, alliance members said mining companies are investing to ramp up both rare earth mining and processing operations not only in Australia and the U.S., but also in Brazil, India, Kazakstan, Malaysia, South Africa, and Vietnam. Fears of rare earth shortages erupted in 2010 when China—which by then had become the largest and most economical producer of rare earths, causing competitors around the world like Molycorp to shutter facilities—began to limit and tax exports of rare earths. By that time, it also had become the biggest consumer of rare earths to make magnets, batteries, lighting, and other products and was concerned it would not have enough of the metals to feed its domestic manufacturers if it continued to export as much (Current, Jan. 29, 2010). The alliance is pushing to create a more diverse and stable supply of rare earths around the world to eliminate any potential shortage, according to Pierre Neatby, its chair.

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