Rare earth supply and trade implications
Dan here…Lifted with permission from an e-mail from Tim Worstall, an expert in rare earth issues and resources, in response to my sending him the NYT article suggesting China was using rare earth resources as both a trade issue (notice NYT suggestion the pass on processed product versus raw material export)) and political leverage with Japan using their detention of a Chinese fisherman.
by Tim Worstall
In brief, the Chinese have just f**ked themselves over if the NYT take on the issue is accurate.
By showing that they’re willing to use RE supplies as a political lever they’ve just made them political for everyone else.
Thus there will be a political insistence that non-Chinese sources will be found.
It will make Mountain Pass’ environmental problems easier to overcome, make funding Mount Lynas easier. It’ll make it more likely that I’ll get my grant to extract REs from the wastes of alumina production (yes, it does work, we just don’t know whether it’s economic as yet, thus the grant).
Most importantly perhaps, it’ll make the politicians concentrate on what’s actually important here. REs aren’t rare but the ability to separate them is. There are any number of places around the world where I could scare up a few tens of thousands of tonnes of rare earth ores. Really, almost trivially simple.
However, separating them can take thousands (yes, really, thousands) of iterations of boiling them in hot acid. And when you’re done you’ve still got the thorium almost always associated with them to dispose of. So, politicians will have to accept that if they want windmills and electric cars then they’re going to have to allow people to play with boiling acids: and they’re going to have to find a repository for all that thorium (for it is radioactive, if only mildly so).
There is, other than the boiling acids thing, a possibility that we’ll go off and find another way of separating the rare earths. While there have been academic advances in this subject over the past 30 years there haven’t been any practical ones, no attempts to apply them. Why bother when China is doing it all for us? I could even tell you what one of the likely and useful methods to investigate is: but then I’d have to kill you as that’s the subject of my next grant application.
Finally, a political point. No, this doesn’t show that we must at all times maintain a domestic industry to do this or that for the fear that someone will start to play politics with our supply of this or that. We do have a few years ahead of some fairly serious amounts of money to be spent on getting RE supplies. But we’ve saved 30 years’ worth of subsidy, a far larger sum, by not maintaining a domestic industry until we needed to.
For almost all commodities, metals, foods and so on, there are so many alternative sources we could develop if we needed to that no one can actually, in anything other than the short term, control our access to them.
If Chile started to use tellurium supplies as a political weapon then I might get a little more worried: anything else I just don’t see it being possible. And it’s certainly not a serious medium or long term threat to anyone other than the Chinese RE producers themselves that China is playing politics with the supply. All they’ve done is increase the funding available through political channels for the creation of alternative sources of supply.
Sensible advice to China would have been that if you want to start behaving like a monopolist you’d better make sure that you actually are a monopolist first. And they aaren’t, not over any reasonable timescale.
Tim
(Dan…slightly edited for readability)
Update: h/t MG for the following links:
Alexis Madrigal provides an update on restarting U.S. production. Of course, it will take $500 million and perhaps as long as 15 years to put all production back in place.
Worried About China’s Monopoly on Rare Elements? Restart American Production
Sep 23 2010, 12:25 PM ET
http://www.theatlantic.com/technology/archive/2010/09/worried-about-chinas-monopoly-on-rare-elements-restart-american-production/63444/
In the U.S. House, there is the Rare Earths Supply-Chain Technology and Resources Transformation Act of 2010 or RESTART Act which was introduced in March 2010. No major action…yet.
H.R.4866 – RESTART Act
http://www.opencongress.org/bill/111-h4866/show
Nice analysis. Thanks Dan and Tim.
Just out of curiosity, will I see Maria Bartiromo on my TV whining about corporate uncertainty due to RE supplies?
My guess is no; unlike our weak-minded congressmen, the Chinese don’t give a damn about right wing American CEO’s or their paid shills.
Perhaps the creation of a large surplus of Thorium wanting disposal would give a boost to the attractiveness of Liquid Fluoride Thorium Reactor technology.
The discussion of the Thorium issue and rare earths suggests the problem in general with environmental activists, they can’t decide what is more important. Is a viewscape more important that wind energy (transmission lines)? How about solar in the mohave desert again to reduce co2 versus desert tortosies. Unfortunatly in life there are issues that run into conflict and someone has to decide them. Or on the rare earths, the thorium versus the various uses of the rare earths. While both sets of objectives are laudable they collide with each other, it seems a lot of the environmental movement wants their cake and wants to eat it also.
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it seems a lot of the environmental movement wants their cake and wants to eat it also.
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There are quite a few environmentalists who are willing to accept nuclear power; OTOH, good luck finding a CEO who agitates for smaller government who also supports having his DoD contract canceled.
Lyle makes a great point: “…a lot of the environmental movement wants their cake and wants to eat it also. ”
What we have is this conundrum – wean vehicles off of one limited resource — petroleum — and get them hooked on another even more limited: lithium.
Not that bad really. There are other new battery chemistries in development. Big problem is we need something better than $12,000 lithium battery packs. But we shouldn’t just think we need a whole fleet of a single engine technology. We can have a mix of hybrid gas, all electric, NG, and diesel. And if we could do carbon sequestering (assuming greenies win that argument), we can use coal to make diesel, and even electricity!
But Yucca Mountain went on indefinite hold again, so that’s bad news for thorium, new nukes, and also the tons and tons of waste being held in temporary storage at nuke plants now.
We have any MG?
You are correct on goals for gov. policy, however, something free traders prefer not to address out loud.
MG,
maybe the generals think we could do without flat-screen monitors, cellphones, hybrid car batteries and wind turbine magnets for 15 years, but we must have some kind of stockpile for the military applications. right?
They need either samarium-cobalt magnets or neodymium-iron magnets for all my DC permanent magnet servo motors.
Otherwise they go blind.
rjs,
I expect that the flag officers (generals and admirals) are among those very concerned about the lack of U.S. production.
The U.S. Government does maintain stockpiles of certain commodities, and I had the opportunity to see some of them years ago. I have never seen any Government stockpiles of rare earth elements. If such stockpiles exist, we probably won’t hear much about them, other than what the Administration and Congress want us to hear.
This is an issue I’ve been following for more than a year.
China has a 95% share of the world market in rare earth metals. The main reasons for this is that China’s supply is the least contaminated with other elements. But it’s also because China doesn’t give a damn about environmental damage or fair labor practices. They exploit the resource because they can.
RE metals are used in relatively large quantities in electric motors and batteries, particularly those found in hybrid vehicles and wind turbines. RE metals will also be a chief component of the next generation of computer memory: MRAM.
There are RE supplies all around the globe, but they are either too costly to extract or don’t exist in commercial quantities. We can certainly begin exploiting local supplies of RE metals, but then the environmental damage and the costs would be IN YOUR FACE, not halfway around the world where you can assuage your guilt – out of sight, out of mind.
The Chinese monopoly is REAL, and we will start seeing them flex that muscle very soon. Everyone who bought into hybrid vehicles and wind turbines simply substituted an oppressive monopolist for RE metals for an oppressive, minority cartel of oil producing nations without regard to the environmental costs. Way to go!
Dysprosium literally means “hard to get.” There’s a reason for that.
The worse news is that China is also cornering the market with contracts in all the other world markets for RE metals, lithium, nickel, etc.
Environmentalists want to have their cake, have it low fat and low calorie and low cholesterol, have it high in vitamins and minerals, and have it government subsidized so everyone can eat cake.
Pow,
Can you e-mail me?
“Dysprosium literally means “hard to get.” There’s a reason for that. “
Yes, there is. It’s that by the standards of chemical knowledge in 1888, when it was first discovered, it was hard to get.
Today it’s no more difficult than any of the other rare earths.
As an environmentalist, I can tell you ‘we’ are not all alike, and ‘we’ don’t appreciate your assumption that all of us want an impossible NIMBY solution.
Plenty of us posess critical thinking and analysis skills, and seek sustainable solutions – with an open mind. I am just fine with well-run nuclear plants and well-run chemical plants on US Soil. It’s a big country – there will be some parts used for industrial purposes that will never be pristine again. And lots of it can be kept ‘pretty’, too.
Now I’ll go back to hugging my trees.
So there is lots of Thorium in the ore that REs come from. Has anyone ever considered using that Thorium for LFTR nuclear powerplants?