Rare earth metals are essential components in modern technologies like cell phones, DVD players, rechargeable batteries, catalytic converters and magnets. Furthermore, rare earths play an essential role in efforts to reduce greenhouse-gas emissions enough to avert catastrophic climate collapse.
China's 2010 export restrictions caused a global supply crisis and skyrocketed prices; consequently, Western nations have made strategic investments that will reduce their reliance on China.
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An excavator was used to move giant boulders down a sandstone mountain in Nevada and into a machine designed to reduce them into pebbles the size of marbles, producing rare earth minerals containing 17 essential elements used as building blocks in many modern technologies. Lanthanum reduces distortion in smartphone lenses; Neodymium magnets boost sound from tiny speakers; while Yttrium and Erbium Phosphors produce vibrant colors on energy-efficient screens.
European chemists used rare earth compounds in the 1800s to identify new elements like cerium and thorium by analyzing their light spectrums, eventually leading them to create more advanced devices like rechargeable batteries, catalytic converters and fluorescent lights.
Rare earth metals have seen explosive growth over recent years. There are currently over 5 billion mobile phones active worldwide and their batteries require multiple layers made up of lithium, nickel and cobalt which all use rare earth elements as components.
Production of these essential raw materials is highly concentrated geographically; for some critical raw materials like lithium and cobalt, only two countries account for over three-quarters of global output. Such concentration makes these commodities particularly vulnerable to sudden policy shifts - restricting exports by just one country can cause the price of the commodity to spike dramatically - this was exactly what happened when China dramatically restricted rare earth exports and caused prices to jump several hundred percent instantly.
As Rare Earth Metal usage expanded throughout the 1990s and 2000s, people and companies came to appreciate their importance. Rare Earth Metals became integral components of high-tech products like energy-efficient television screens; phosphors for energy-saving television screens; lanthanum to reduce distortion in tiny camera lenses; neodymium magnets used by electric cars; fiber-optic cables used worldwide and more thorium and yttrium used as fiber optic cables that connect long telephone calls or Internet data transmission networks.
As demand skyrocketed, mining companies scrambled to open new mines and processing plants - but given it takes several years before any mining property can begin producing metal, too much demand could cause supplies of metal to decline and prices to soar rapidly.
Many governments fear they'll soon run short on these essential metals, and some are taking measures to ensure they have access to what their nation requires. President Biden issued an executive order last week seeking to identify any gaps in domestic supply chains for rare earths and minerals essential to clean energy technologies and national security products.
Even though some of the metals used to produce rare earth elements aren't actually rare, they're extremely difficult to source and mine - this often results in environmental impacts which require expensive mitigation costs. Sustainable and socially responsible production of these critical metals are thus vitally important, though more work needs to be done in order for this process to happen effectively.
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Rare earth metals are ubiquitous throughout Earth's crust, yet only occasionally concentrated into economically mineable deposits. From discovery to commercial development can take years - an extended process for such an important commodity as rare earth metals are.
As technology has advanced over the last decades, rare earths have seen their demand skyrocket. Rare earths are used in manufacturing electronic and optoelectronic devices (like lasers), defense industry chemical catalysts, telecom fiber optic cables that reduce long-distance phone call costs, rechargeable electric car batteries, silicon chips and wind turbine motors; among many other uses.
Rare earths have long been in short supply due to the difficulty associated with mining them. But in the 1980s and 90s, as U.S. dominance in this business declined, China began developing domestic manufacturing capabilities as part of a plan to ensure political stability while creating prosperity without undermining Communist Party control of their economy.
Chinese restrictions on rare earth exports in 2010 caused panic buying that sent prices skyrocketing, prompting Japan, the European Union, and the United States to file complaints against this move with the World Trade Organization.
Rare earth metals present several environmental and social risks that make investing in them questionable. Mining for them is often time-consuming and challenging, leaving behind toxic waste while damaging habitats. Furthermore, rare earth companies face political risk because if a country introduces cheaper or better alternatives than rare earths their demand may decrease and affect profits negatively.
China's dominance in rare earths export is of particular concern. In 2010, they held near monopoly of this industry, exporting about 80% of global rare earths. Unfortunately, that trend was short-lived: following an incident between Chinese and Japanese patrol boats near an contested chain of islands, Beijing cut rare earth exports to Japan significantly; creating shortages which in turn increased prices significantly.
As a result, Molycorp and Mountain Pass Mine's plans to produce rare earth elements (REEs) domestically were cancelled, leading most production of REEs to go to China for processing instead. As Air & Space Forces Magazine pointed out, REEs are critical components in clean-energy technologies as well as military hardware - an issue worth keeping an eye on.
Researchers at the University of North Dakota are conducting experiments to extract and refine rare earth elements (REEs) from coal byproducts, hoping that one day UND could become a major producer and help diversify US supply.