Rare Earth and Lithium Supplies Cloud Renewables

By Kennedy Maize

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Rare earths—some 17 elements (some scarce and some abundant) found in Earth’s crust by themselves or combined with other chemicals—may be a major hurdle in the renewable energy supply chain. The metals and their compounds are used in battery technologies, windmills, catalysts, and communications technologies.

The majority of the commercially useful rare earths today come from mines in China. That’s a problem.

China’s Rare Earth Monopoly

The rare earths occupy 57th to 71st place on the periodic chart of the elements. Discovered largely in the 19th century, the minerals have proven useful for modern technologies because of their electrochemical properties. They are crucial to advanced, high-temperature superconducting technologies, in addition to being used in windmills, electric vehicles, and new lighting technologies.

China owns the market for the most important rare earth metals, producing almost 100% of dysprosium and terbium, both crucial to the advanced performance of electric motors and lighting (see figure). Today, demand for the rare metals is booming. But China has been exploiting its dominant monopoly of rare earths to manipulate the market, according to U.S. commodities analysts.

Geographic changes in rare earth production. Courtesy: USGS

These are not internationally traded commodities on transparent markets, so sussing out market price trends is difficult. Analysts surveying the market assert that China is using its market power to control prices and benefit its domestic producers and users.

The Chinese government late last year announced it would cease exports of rare earths to favor its own manufacturing of wind turbines. Following international protests, China backed off from its threat but said it would increase its restrictions on rare earths exports by 12% annually, in order to favor domestic producers.

China’s policy has caused several U.S. and international wind turbine developers, including General Electric, to shift turbine manufacturing from the U.S. to China to ensure access to rare earth supplies. Because the military uses rare earths in a variety of military applications, such as night-vision equipment, Congress ordered the Department of Defense to review the U.S. military’s reliance on imported rare earths, with a report due April 1.

Additionally, the environmental practices of rare earth mines in China have drawn public criticism. The PBS television network last December focused on the impacts of rare earth mining in China. Correspondent Lindsey Hilsum reported, “Rare earth processing in China is a messy, dangerous, polluting business. It uses toxic chemicals, acid, sulfates, ammonia. The workers have little or no protection.” The report included graphic images of allegedly unprotected workers.

The New York Times noted, “These elements come almost entirely from China, from some of the most environmentally damaging mines in the country, in an industry dominated by criminal gangs.”

What to do? Some suggest that the U.S. should revive its domestic rare earth mines, which supplied a major portion of the world’s demand until China’s lower-cost capacity undermined U.S. production. Jack Lifton, an analyst and documentary filmmaker, recently argued that the U.S. should respond to the world supply situation by reactivating “the rare earth mines we have and by starting new ones in the United States and North America. If we don’t start producing our own critical and strategic metals and minerals, we’re going to find that our industry, and anything we want that uses those materials, will be made in other places such as China.”