Wednesday, November 3, 2010

The Beijing Rare Earth Embargo: Threat or Menace?

As the only commercial producer of rare earth metals, will Beijing’s decision to reduce export quotas of the valuable materials endanger the global economy?

By: Ringo Bones

It started over a diplomatic row when Chinese fisherman were caught illegally fishing in Japanese territorial waters back in September 2010. In protest, the Beijing government swiftly stopped selling rare earth metals to Japan, endangering the countries ability to manufacture hybrid cars. Thus making the press and the rest of the world take notice back in October 21 2010 the importance of rare earth minerals, but will Beijing’s decision to curb their rare earth metal exports eventually endanger the global economy?

Even though rare earth metals has recently became the commodities traders’ investment (or is it speculation?) hotspot du jour, from the perspective of the International Union of Pure and Applied Chemistry or IUPAC, the elements often referred to as “rare earths” are neither rare nor earths. The rare earth family of elements are in fact composed of soft, malleable metals – and most of them are not at all in short supply. Cerium, the most abundant, is more plentiful than tin or lead – while thulium, the scarcest, is only slightly rarer than iodine. The rare earth misnomer came about because the oxides of the elements – with its earth-like consistency – were at first mistaken for the elements themselves.

All of the 15 rare earth elements have two outer electrons and eight or nine in the second shell in. They only vary in their electron compliment in the third innermost shell. But among the rare earth atomic structure, the third-shell electron difference is very slight indeed, which make the 15 elements belonging to this group a very close-knit family indeed. A typical mineral containing a single rare earth element more often than not also contains all the others.

The rare earth elements are so nearly identical in their chemical properties that separating them can easily involve thousands of steps. Because of this quirk, the individual rare earth elements in their chemically pure form did not become available in commercial quantities until the late 1950s. Nevertheless, the rare earth family in their less than chemically pure form has been used industrially since the early 1900s in the form of their mineralogical mixtures that occur naturally. Purer forms go into the making of powerful ceramic rare earth magnets like the samarium cobalt magnets used in the electric motors of today’s hybrid cars.

For much of the 20th Century, more than a million pounds of rare earth elements I their low purity form still go annually into the production of an alloy called “misch metal” – German for mixed metal. Combined with iron, misch metal products are used in cigarette-lighter flints. But the main use of low purity rare earths is in iron and steel-making where it is used to absorb impurities and improves the steel’s texture and workability.

A mixture of rare earths combined with carbon produces the intense carbon arc lights once used to light up Hollywood before being replaced by more energy efficient light sources. And a large number of rare earth compounds go into the making high-quality glass for computer monitor use by making the glass completely colorless. Or in other applications, by adding deep color depending on the combination used.

When the news of the People’s Republic of China’s decision to reduce its rare earth metal exports reached the press back in October 21, 2010, the global consumer electronics industry and hybrid car makers almost panicked since they are today’s primary users of rare earth metals in the manufacture of their goods. Unmanned drones and smart bombs made indispensable in America’s “War on Terror” can’t function without rare earth metals.

Even though the United States’ rare earth metal deposits are as abundant as the ones in the People’s Republic of China, the U.S. had since closed its rare earth mines and related processing facilities since 1990 because these can never economically compete with Mainland China due to stricter Occupational Safety and Health Administration (OSHA) rules. Not to mention tougher Environmental Protection Agency guidelines and unlike Mainland China, U.S. miners won’t work for slave wages. Only Mainland China’s wanton disregard of worker safety and environmental protection had allowed it to produce and sell rare earth metals to the global markets at literally rock-bottom prices and restarting the United States' dormant rare earth metal mining industry is not very economically viable at this time.


Sherry said...

I just herd from the BBC a few hours ago that Mainland China has just ended the embargo of its export of rare earth metals to Japan. Was it due to the shelling of South Korea's Yeonpyeong Island by North Korea? Anyway I wonder if rare earth mining is even economically viable - I mean the rare earths are about evenly and rather thinly distributed across the Earth's crust that a typical rare earth mine seems to violate established methods of commercial mining valuation methods. Did the Cold War era production of nuclear weapons subsidized America's rare earth metal industry back then? After all, rare earth metals tend to also occur in commercially viable uranium ores.

Sans Ferdinand said...

The Beijing government reducing their quota of rare earth metal exports not only affects the laptop / hand-held gadget / mobile cellular phone industry, but also the hi-fi industry as well as in the rare earth magnets used in dynamic loudspeakers. Not to mention in the world of Airsoft gaming where the Airsoft gun electric motors are full of rare earth magnets. Plus the petrochemical industry - where the extraction of gasoline from crude oil involves cerium and lutetium based chemical catalysts.

Ringo said...

I'll be examining the full extent of the supposed economic viability of rare earth metal mining and processing soon - especially in relation to the Cold War era "Nuclear Industry". Please check out this site for further updates.