Thursday, December 30, 2010

Wanted: rare earth metals

From the 03 January 2010 Greater Niagara Newspapers

By Bob Confer

The history of mankind has been filled with numerous wars, of both the military and trade sort, over elements that come from the Earth. Gold and silver have long been at the epicenter of such struggles, many a civilization driven to destruction over their greed - or other peoples’ desires - for the metals.

There are other precious elements now taking their place as resources hungered by all and they are ready to test the balance of power in global trade. Rare earth elements (REE) are a collection of 17 members of the periodic table. All of them are not as well known as metals like copper and zinc yet they are just as important. REE like yttrium (cancer treatments), lanthanum (hybrid car batteries), cerium (catalytic converters), neodymium (magnets) and gadolinium (nuclear reactors) are crucial to our modern society and, truthfully, we could not live without them.

We’re going to have to find ways to make do with less very soon. China currently mines 93% of the world’s REE and the nation’s leaders have announced that they will be cutting exports of the metals by at least 40% before the end of 2011. That cut may not even be large enough: Some manufacturing experts believe that China’s growing industrial sector will consume all of the REE it produces by 2012.

Needless to say, having all of our eggs in one basket – especially one held by China - is dangerous for national security. Just ask Japan.

Back in September Chinese officials temporarily unleashed a trade embargo that prevented shipments of REE to Japan, scaring the dickens out of Japanese manufacturers. It was believed that China did this as a bargaining chip to secure the release of a Chinese captain detained by Japanese officials.

In the whole scheme of things, a political impasse like that is nothing in comparison to the potential for conflict that exists between China and the US. China controls nearly $900 billion in US debt and we’ve had strained relations of late as China criticizes our ever-weakened dollar and our escalation of the Great Recession while we accuse them of manipulating their currency to undermine our economy. It wouldn’t take much for an agitated China to impose REE restrictions.

China has so dominated the REE marketplace because of their less-stringent environmental standards. Most of the 17 elements are not rare as the name supplies. They are widely available throughout the world (China has only 36% of global reserves), yet are rare in finished, usable form because the excavation and processing of them can be toxic to the environment if not properly controlled. Recklessness with REE development has fit perfectly with China’s unfettered assault on nature, one that has seen Beijing and other cities overcome by vast clouds of pollutants.

America has basically been out of the REE business for years, most all of our mines shuttered because of warranted environmental concerns. The environmentalists in the Department of Energy and the Environmental Protection Agency now see merit in the development of REE projects because they know that, ironically, their clean energy technologies (like wind turbines and new-age automobiles) require rare earths. It’s a catch-22: One set of resources (REE) must be capitalized at cost to the environment to prevent other resources (oil, coal) from harming the environment.

Recently a company named Molycorp was finally given the okay to tap into a vast REE reserve in the Mojave Desert after an 8-year suspension of operations by the federal government. This mine offers the single largest deposit of REE outside of China. The forward progress of this project was brought on by a public-private partnership that saw the government and the corporation working hand in hand to develop guidelines and processes necessary for a relatively clean and safe realization of the mine’s potential.

It is hoped that other projects follow suit and quickly at that. We’re probably too little too late as it is. 2012 could mark the beginning of a new national crisis, one where we will suffer in the health, energy, and defense industries until we can get back on track in REE capture.

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