Rare Earth Metals – Rare or in Short Supply?

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At Admiral, we’re always keeping an eye on metal markets and related industry news and lately we’ve found several interesting articles and discussions about rare earth metals: the mining and processing of them, the effect of China’s stockpiling and the alternatives that are in development as a result. They are 17 elements highly valued for their uses in high-tech applications, such as wind turbines, laser-guided weapons, consumer electronics and hybrid-car batteries. In truth, rare earth metals are not really rare at all. The Rare Earth Metal Cerium, for example, is the 25th most abundant element found in the Earth’s crust with 68 parts per million, similar to copper. Unlike copper, however, rare earth metals are not found in concentrated amounts and are expensive and time consuming to mine.

The process of bringing rare earth metals to an exploitable form includes mining (mostly from bastnaesite mineral deposits), separation, refining oxides into metals, fabricating alloys, and final manufacturing into various components. Until the late 1980’s, the US dominated global production mostly through mining in Mountain Pass, California. In the past 20 years, US production has slowed due to environmental and safety concerns, the resulting regulations and restrictions causing prohibitive mining costs. Now, US development is improving, but ramping up mine production is expensive and time-consuming (about $500 million to $1 billion to start a mine which could take 8 years).

The US slow down left room for China to become the dominant player in all aspects of the rare earth supply chain. In recent years, China has actively expanded its rare earth metals reserves and tends to manage its exports with little transparency. A Reuters report from the US Geological Survey estimated that China holds about half the world’s rare earth metals reserve and produces more than 95% of the world’s supply.

At the same time, demand has been growing annually. Currently, worldwide demand is at about 134,000 tons each year while production is only at 124,000 tons. The rest comes from above ground reserves. If this trend were to continue, by 2014, demand could reach close to 200,000 tons. Supply shortages are expected in those countries without reserves or alternative technologies.

We have already seen alternatives to rare earth metals and innovation in the way they are are mined in the auto and energy-related industries, the two largest consumers. Countries around the world are seeking to reduce demand through urban mining, or recycling, particularly in Japan. Mitsubishi is studying the cost of reusing neodymium and dysprosium from washing machines and air conditioners, and Hitachi is hoping that by 2013 it will meet 10 percent of its demand through recycling. Toyota is developing an induction motor and car batteries for its electric and hybrid cars that reduce its rare earth dependence. General Electric is working to engineer out rare earth metals from the magnets required to run its wind turbines. As a result, throughout 2011, rare earth metals’ prices have been dropping.

Industry experts tell us we needn’t be concerned that our Prius cars and Blackberries will become relics nor will wind turbines stop turning. Says Jack Lifton, founding Principal of Technology Metals Research, “If you think you can keep raising the prices for those materials and still keep your customers, you’re crazy. That industry will engineer this stuff out.” It appears this has already begun to happen.

At Admiral Metals, we like to keep you abreast of trends like these in related industries. Whether it’s rare earth metals, copper or aluminum, the affect of globalization and the resulting innovation has profoundly impacted the metals industry. We can envision this trend continuing.

Common Uses for Rare Earth Metals

  1. Scandium:  Mercury vapor lamps, athletic equipment and fuel cells.
  2. Yttrium: Color TV picture tubes, microwaves and acoustic energy, ceramics, glass, aluminum alloys and magnesium alloys.
  3. Lanthanum: Carbon arc lamps for studio and projector lights, batteries, cigarette-lighter flints and specialized types of glass, like camera lenses.
  4. Cerium: The most widespread of all rare earth metals. Used in catalytic converters, diesel fuels, carbon arc lights, lighter flints, glass polishers and self-cleaning ovens.
  5. Praseodymium: Alloying agent with magnesium to make high-strength metals for aircraft engines., a signal amplifier in fiber-optic cables, and the hard glass of welder’s goggles.
  6. Neodymium: Neodymium magnets for computer hard disks, wind turbines, hybrid cars, earbud headphones and microphones, to make lighter flints and welder’s goggles and to color glass
  7. Promethium: Added to some kinds of luminous paint and nuclear-powered microbatteries, with potential use in portable X-ray devices. It is artificially produced via uranium fission.
  8. Samarium: Crucial for building “smart” missiles; also used in carbon arc lamps, lighter flints and some types of glass.
  9. Europium: The most reactive of all rare earth metals. Used for decades as a red phosphor in TV sets, computer monitors, fluorescent lamps and some types of lasers.
  10. Gadolinium: Control rods at nuclear power plants, medical applications such MRI’s, and industrially improving the workability of iron, chromium and various other metals.
  11. Terbium: Solid-state technology (advanced sonar systems to small electronic sensors), fuel cells, laser light and green phosphors in TV tubes.
  12. Dysprosium: Control rods at nuclear power plants, lasers, high-intensity lighting, and to raise the coercivity of high-powered permanent magnets, such as those found in hybrid vehicles.
  13. Holmium: Has the highest magnetic strength of any known element, making it useful in industrial magnets and nuclear control rods, and in solid-state lasers and to help color cubic zirconia and certain types of glass.
  14. Erbium: Used as a photographic filter and as a signal amplifier in fiber-optic cables., and nuclear control rods, metallic alloys, and to color specialized glass and porcelain in sunglasses and cheap jewelry.
  15. Thulium: The rarest of all naturally occurring rare earth metals used in some surgical lasers and portable X-ray technology.
  16. Ytterbium: Portable X-ray devices, lasers, stress gauges for earthquakes, and as a doping agent in fiber-optic cables.
  17. Lutetium: Specialty uses, such as calculating the age of meteorites or performing positron emission tomography (PET) scans, or used as a catalyst “cracking” petroleum products at oil refineries.

Wishing you the very best in business,

Jim B Signature

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