Last week, US President Donald Trump signed an executive order. It was about securing the future supply of critical minerals such as ‘rare earth’ minerals. The executive order and the statement following it is unambiguous, “Our dependence on one country, the People’s Republic of China (China), for multiple critical minerals is particularly concerning. The United States now imports 80 percent of its rare earth elements directly from China, with portions of the remainder indirectly sourced from China through other countries.”
According to the American Geosciences Institute, rare earths are used in the manufacture of mobile phones, cameras, computer hard disks, light-emitting diodes, missiles and many other items. It is safe to say that a lot of modern technology depends on rare earth elements. These are a set of seventeen chemical elements including Scandium and Yttrium. Even though the names sound like something Arthur C. Clarke would have made up, these elements are real. Lack of an alternative makes these elements coveted raw materials.
But rare earth elements are actually not so rare. The elements are found in abundance throughout the earth’s crust with two or more of the elements occurring together in its mineral form due to their chemical similarities. The challenge lies in extraction. Separating these elements from one another is often quite difficult.
Mining these elements has only become economically viable in the last couple of decades.
Today, China has the largest reserve of rare earths and produces about 70 per cent of the minerals available in the market. By 2025 the industry is predicted to be worth over $14 billion (£10.9 billion). In comparison, Australia, the second-largest producer, supplies just 15 per cent. China has an unopposed dominant standing in the rare earth market – allowing it a dominant position in this market.
In 2006, China levied duties and limitations on its exports citing protection of the environment and scarce natural resources. By 2010, they had cut down their export by 40 per cent. Moreover, China is taking measures to prevent smuggling and further aims to reduce its production. This has created a gap in supply and market prices have soared as the demands are at an all-time high.
Other producers of rare earth minerals such as Myanmar, Australia, the US, Russia and India cannot sufficiently meet the global demand. This has led to rising trade tension between China and the US. According to Research and Market, 78 per cent of rare earth elements used by the US are imported from China.Secretary of Energy Dan Brouillett explained: “It’s vitally important that America develop a viable domestic supply of rare earth elements, critical minerals, and other valuable products from our vast coal resources.”
The US has reopened its light rare-earth mines in Mountain Pass and amped-up production (this according to MP materials, the company that operates this mine). In its bid to further reduce their dependency on China, the US has commissioned the eco-friendly rare earth Australian mining company Lynas to build a processing plant in Texas, US. Lynas said, “The facility will help break reliance on China for materials used in high-tech products from phones to MRI machines, potentially opening the market for new opportunities.”
The US Department of Energy is keen to invest in this area. It is investing $122 million to establish coal and rare earth extraction and processing plants.
Moreover, ongoing research by Japan to look for oxides offshore as well as new sites discover and mine development in Steenkampskraal, South Africa, Thor lake in the Northwestern Territories of Canada, Kvanefjeld in Greenland and several sites in Vietnam may reduce the global market’s dependency on China’s reserves in future.
Some companies are also exploring another option: recycling rare earth elements from electronics. The chemical company Solvay Group has set up a recycling plant in La Rochelle and Saint-Fons Chimie, France. It will extract and process rare-earth elements out of fluorescent lamps and LCDs. Du Hua, director of the Rare Earths Global Business Unit of Solvay said: “Recycling allows us to develop a new source of supply, and we aim to become the leading European player in that field.” The recycling plants are expected to process 1000 tons of hazardous waste each year.
As for in UK companies like Galileo Resources are very much at the forefront of trying to resolve the rare earth crisis. Its subsidiary is looking for rare earths in the Limpopo province of South Africa. Colin Bird, CEO of Galileo said: “In 2011, the west was much concerned with China’s dominance of rare earth market against an increasing western requirement for REs including in military use. This concern prompted several western governments to take initiatives including the USA having a special senate committee and other steps to develop western RE production capability. This alternative source requirement did not dissipate but was overtaken by subsequent relative geo-political calm thereby negatively impacting on the RE price. This calm has now evaporated and the spectre again of a RE deficit, particularly, the heavy REs, is again emerging.” (He made these comments in 2019).