DOE OSTI2011
There is a great deal of uncertainty for the future of rare-earth production. Rare-earths are a collection of 17 chemical elements in the periodic table, which include scandium and yttrium as well as the 15 lanthanides, such as dysprosium and ytterbium. China has a stranglehold on today's rare-earth market, which was worth about $3bn in 2010, with the country accounting for about 95% of worldwide production. Yet China's future actions can only be guessed at best. In September it halted shipments of rare-earth elements to Japan over a diplomatic spat concerning the detention of a Chinese trawler captain. Although the ban was later lifted, the episode raised concerns around the world about China's rare-earth monopoly and its use in diplomacy. China has already warned that it will not export any rare-earth material in the coming years as it expects its own consumption of rare-earth metals to increase. The country has introduced export taxes as well as production and export quotas, and also refused to grant any new rare-earth mining licences. Furthermore, because its reserves are limited and China's internal markets are growing so rapidly, the country has suggested it will no longer export products that require rare-earth elements, especially those that need heavy rare-earth elements, such as terbium and dysprosium. China's actions have led to huge rises in the cost of rare-earth materials and products. Dysprosium oxide, for example, has shot up from $36 per kilogram in 2005 to a massive $305 per kilogram by late last year. This could have a huge impact on much of today's electronics industry, given that rare-earth elements are ubiquitous in electric motors, computers, batteries, liquid-crystal displays (LCDs) and mobile phones. Neodymium-iron-boron permanent magnets, for example, are used as computer spindle drives. The question is: what can be done to ensure that China's dominance of the rare-earth industry does not affect the military and energy security of the US and other nations? Rare-earth elements are relatively plentiful in the Earth's crust but they are widely dispersed, which makes mining them economically nonviable. The rare-earth industry first took off in the early 1960s with the discovery of the intense red luminescence of europium when excited by electrons. This was quickly utilized by TV manufacturers in the US, which used the material to produce the colour red. Indeed, many of the rare-earth applications arise because each element is unique and so certain elements exhibit behaviours that match a particular application, such as neodymium for lasers and magnets or europium and terbium for the red and green colours in TVs. In the 1960s annual production of rare-earth elements was about 2000 tonnes, with the US company Molycorp supplying 50% of the rare-earth oxides from the Mountain Pass mine in California. This monopoly was broken in the early 1990s when China first began to export separated rare-earth oxides and metals. By the late 1990s China was moving up the supply chain to higher-value products such as magnets and phosphors. Since the turn of the century it has supplied finished products including computers, LCDs and mobile phones. Production of rare-earth elements, which has been increasing by about 10% every year since the 1960s, reached 97,000 tonnes by 2009. Fortunately, new deposits of rare-earths are being discovered all over the world, which means that China now accounts for about 30% of worldwide deposits, rather than 70% as widely thought in the 1980s. But to take advantage of this and break the monopoly, governments outside China need to open new rare-earth deposits, especially those with high concentrations of the heavier rare-earth elements. They also need to expand and open new manufacturing facilities for products that need rare-earths, as well as train scientists to replace the intellectual capital lost during the last 20-30 years because of the Chinese monopoly. The bottom line is that to reduce the rest of the world's dependence on China for a sufficient and continuous supply of rare-earth materials - as well as eliminating the recent Chinese-induced price spikes - mining companies outside China need to increase their output from 6000 tonnes in 2010 to 50,000 tonnes by 2015, according to a forecast by Dudley Kingsnorth of the Industrial Minerals Company of Australia. The Mountain Pass mine is expected to again be in full production in 2012, supplying about 20,000 tonnes per year, and the Mount Weld mine in Australia will start production this year at an annual rate of about 21,000 tonnes. These two deposits, however, contain predominantly the lighter rare-earth elements, such as lanthanum, but there are a number of smaller deposits with a large fraction of heavier rare-earth elements that are expected to come online in the next few years.
29 ENERGY PLANNING, POLICY, AND ECONOMY↗