For years China has held back its precious supply of rare-earth elements, crucial to high-tech gadgets and green technologies. Is this about to change?
In 2010, China sent world markets reeling when it blocked exports of rare-earth elements to Japan following a territorial spat, and suspended shipments to the US and Europe. Citing a need to preserve mining resources and protect the environment, the nation soon returned exports to the US and Europe, but Japan's ban is reported to have remained in place for months.
Severing supplies of rare-earths to the rest of the world was, and still is, an unpalatable prospect. The elements are used in just about every high-tech gadget and 'green' technology invented in the last few decades. For example, powerful magnets based on neodymium are used in computer hard drives and smartphones while the same magnets doped with dysprosium and terbium are found in high-performance motors in electric cars and gearless wind turbine generators.
But with rare-earth elements now crucial to so many modern technologies, is China's global monopoly on them – it currently supplies a hefty 97 per cent of the world's demand – sustainable? Export bans aside, past supplies have satisfied global needs, but the nation's fast-paced economic growth twinned with new environment constraints on mining practices could stretch these resources. Indeed, the US Department of Energy and the European Commission recently reviewed available rare-earth supplies and future demand for the elements; each organisation forecasts imminent shortages that look set to hamper the deployment of clean technologies including wind generation and electric vehicles (see box 'Meet the family').
Luckily, the rest of the world hasn't just been sitting back and waiting for China to dole out its precious rare-earth supplies. "The last few years have seen an explosion in the number of new rare-earth exploration and development projects around the world," says Dr Gareth Hatch, founding principal of US-based rare metals consultancy Technology Metals Research. "Right now there are more than 420 projects around the world, outside of China, in which [engineers] are actively exploring and developing rare-earth deposits."
Clearly, not all projects are equal. As Hatch points out, some of these mining projects are being pursued after having just found a handful of rare-earth samples at the site but others actually have proven mineral reserves known to be economically mineable.
Take US-based rare-earth business, Molycorp, which reopened its Mountain Pass mine in California in 2010. The company currently has more than 1,000 construction workers completing its manufacturing and processing facility and soon hopes annual production will reach 19,500t of high-purity rare-earth oxides, including the much sought-after dysprosium used in wind turbines. This annual production rate is on a par with China's export quota for 2012, which came in at 24,904t.
Further production is also expected to start at mines across Australia, Canada, South Africa and Greenland in the coming years. For example, Greenland Minerals & Energy, owners of the Kvanefjeld project with its estimated 619 million tonne-plus minerals resource, is expected to start production by 2016. Meanwhile Australia-based Lynas Corp hopes to process up to 22,000t of rare-earths a year from Mount Weld in western Australia. The company must first, however, resolve environmental issues at its Malaysia-based processing plant.
"It's going to take a little time before we can rely on these new sources of rare-earth elements but I still get a little bemused when folk say we have a problem," says Hatch. "Politicians say the sky is falling... but the number and diversity of projects outside China shows the so-called rare-earth crisis is theoretically solvable."
Theoretically solvable or not, there is more to supplying rare-earths than simply digging them out of the ground. The elements are not found as free metals but rather as 'cocktails' of around 15 elements that can only be mined together. What's more, the relative amount of each element varies from deposit to deposit.
As a result the commercial separation of the mined rare-earths has numerous process steps, varies across sites, and is incredibly expensive. Molycorp, for example, has just bought rare-earths processor Neo Material Technologies for $1.3bn to get its 'mining-to-magnets' supply chain in place. Meanwhile Canada-based Avalon Rare Metals has put the development costs of its Nechalacho project in the Northwest Territories at a hefty $889.7m.
"The number [of projects] belies the formidable challenges associated with the successful commercialisation of these projects," says Hatch. "There's a whole infrastructure that isn't yet in place... to get the heavy rare-earth elements, people are looking to process minerals that have never been commercially processed before so they are starting from scratch with the chemistry. It costs money and there are not a lot of people that know how to do it."
Indeed, Hatch estimates that North America and Europe combined have no more than 40 to 50 skilled mining engineers compared with literally thousands in China. One option is to head east for the expertise, a possibility that hasn't escaped the Chinese government.
Wang Caifeng is a former official for the rare-earth industry at China's Ministry of Industry and Information Technology, and is now setting up a rare-earth association in China. She asserts that the Chinese government is encouraging its companies to develop rare-earth mines abroad to help ease pressure on domestic producers. As she highlights, China has the technical expertise and human resources in mine development and processing that the rest of the world is crying out for.
But China's moves to form partnerships with the rest of the world have not been embraced. For example, in May 2009, state-owned China Non-Ferrous Metal Mining offered $252m for a 51.6 per cent stake in Lynas Corp, which at that point in time needed cash to resume development of its Mount Weld rare-earth mine. Australia's Foreign Investment Review Board, stepped in and blocked the bid.
Given potential industry reticence to borrow Chinese expertise, as well as the difficulty of raising hundreds of millions of dollars to set up processing facilities, how will the fresh supply of rare-earths get processed? One answer could lie in a new business set up by Hatch. Innovation Metals aims to provide a centralised, independent separation facility that will process the rare-earth concentrates – mined ores that have been milled but not chemically treated – for producers, for a relatively small fee.
According to Hatch, the key technical challenge is whether you can take in the feedstock from a range of different sources and produce separate, high-purity rare-earth oxides. However, recent studies have demonstrated high recovery rates and the business is looking to set up a first processing facility for light rare-earth oxides in south east Asia and a second, for heavy rare-earth oxides, in eastern Canada close to several deposits.
Alongside progress in exploration and mining, industry players are also developing new ways to recycle rare-earth materials. Traditionally, the process of extracting rare-earths from, say, magnets has been performed manually using acids. This produces liquid waste that is neither cheap nor environmentally-friendly to dispose. However, this looks set to change, largely thanks to Japanese research.
In response to China's export ban, the Japanese government set aside some $1.2bn for research into rare-earth recycling, as well as opening new supply routes and the stockpiling of REEs. As part of this push, Japan's Ministry of Economy, Trade and Industry selected Hitachi, to find new ways to recycle rare-earth elements.
The Japan-based electronics giant has since been developing a dry-extraction process that will recover neodymium and dysprosium from the rare-earth magnets used in its hard-disk drive motors and air conditioners. It hopes to start full recycling operations by 2013.
"Recovering these elements is very important," says Dr Patrick Wäger, a scarce metal researcher from the Technology and Society Laboratory at Switzerland-based research institute, EMPA. "Recycling is a lot less energy intensive than primary production, so you have less of an environmental impact. Also, you just don't want to lose this material; from the point of view of sustainable management, recovering them is critical."
But exactly how much rare-earth material can by recycled from spent products? As Wäger admits, hardly enough to supply an entire industry. "I believe it's a few per cent [of total production] in the end," he says.
But despite the small volumes, the recovery of rare-earth elements from spent products can contribute to relieving the risk of rare-earth shortages, and companies worldwide are recognising this. Siemens is leading a project, 'MORE' or MOtor REcycling, that is looking at the entire life of an electric motor to best determine how to recycle the rare-earth elements.
Meanwhile, Belgium-based materials recycling business Umicore has unveiled a process for recycling rare-earth elements from nickel metal hydride rechargeable batteries.
Back in Japan, automaker Toyota has joined forces with electronics heavyweight Panasonic to recycle Prius hybrid vehicle batteries and retrieve the lanthanum and neodymium. The government there has just drafted a bill to promote the re-use of rare-earth elements from used products.
Given the world's strident efforts to mine and recycle rare-earth elements, how much longer can China maintain its strangle-hold on these very precious materials? At the time of writing, the European Union, US and Japan had formally asked the World Trade Organization (WTO) to investigate China's restrictions on exports of rare-earth elements. The request comes after a WTO ruling that China has been violating global trading rules by curbing exports of other raw materials including magnesium, manganese and zinc.
Recent developments in mining and recycling twinned with fairer trading, surely mean the days of China's rare-earth supremacy are numbered.