Rare Earths And America’s Green Future

Rare Earths And America’s Green Future

The closure of Bay Area-based solar panel maker Solyndra, a year after the company received federal stimulus funds of $535 million, has highlighted growing concerns about America’s long-term ability to compete with China in the green economy. A key component in the manufacture of green tech products, including solar panels and batteries for hybrid vehicles, are rare earth elements, 97 % of which are currently supplied by China. The significance of Beijing’s near-monopoly over this critical resource and how it affects American competitiveness in the industry is very interesting.

What exactly are rare earths and what is their history with regard to global manufacturing. What are the industries that rely most heavily on these elements?
Rare earths, or rare earth elements (REE) as they are often called, are a group of 17 uncommon minerals including lanthanum, cerium, neodymium, samarium, and europium. Although not exactly “rare,” as their name implies, the rare earth elements are not usually found in concentrated deposits but typically are mixed with other minerals (including radioactive substances), making them hard to find and extract. Each of these elements possesses distinctive characteristics that make them useful for various high-tech industries: lanthanum, for example, is used as a catalyst in petroleum refining, while both neodymium and samarium are used in high-temperature magnets.

What is the relationship between rare earths and the green economy? How are they used in the production of such things as photovoltaic cells and batteries for hybrid vehicles?
The rare earth elements have become especially important in the green energy economy for a number of critical applications. Because certain of the REE retain a magnetic charge even under high temperatures, they are highly prized for use in wind turbines and hybrid-electric and all-electric vehicle motors. Batteries made of lanthanum and nickel also retain their charge longer than conventional batteries, and so are ideal for such vehicles. It is estimated that the Toyota Prius, the world’s most popular hybrid, requires two pounds of neodymium and 20-30 pounds of lanthanum.

Are rare earths found more or less everywhere or, like oil, are they concentrated in certain regions of the world? Aside from China, who are the major players in the mining of rare earths?
The rare earths are dispersed in many locations around the world, including Australia, Brazil, China, India, Mongolia, Vietnam, and the United States. But concentrated deposits of these materials are rare. Extracting REE from composite ores is a hazardous process, involving the use of toxic chemicals and the disposal of toxic and radioactive wastes. China became a major REE producer not because it possesses the largest concentration of these materials but by employing low-cost production methods and overlooking environmental concerns – a move it now appears to regret, as the government is clamping down on small-scale, unregulated producers.
In the United States, a major REE concentration is located at Mountain Pass, Calif., near the Nevada border. A mine at Mountain Pass was once the world’s leading producer of REE, but it was closed in the 1990s due to rising costs and increasingly strict environmental regulation. The mine is now set to be reopened in 2012 following $500 million in new investment.

A recent article in the New York Times noted that China accounts for 97% of rare earths production. What impact does this have on the competitiveness of America’s green industries?
The United States, like Japan, will remain dependent on Chinese rare earths for some time to come. But it is not only rare earths on which the USA has become dependent — many of our solar panels, wind turbines, and other green devices are also supplied by China. President Obama has sought to promote the growth of green technology in the United States and secured billions of dollars in loans and grants for this purpose in the 2009 stimulus package, but most of those funds have now been spent and Congress appears unwilling to vote any additional funds. The USA still holds an advantage in some areas of green technology, but since the Chinese government is willing to pour a lot more money into this field than the American government, China will inevitably make greater strides in the years ahead.

This recent closure of Bay Area-based solar panel manufacturer Solyndra and the loss of some 1,100 jobs, despite a $535 million loan guarantee for the company last year as part of Pres. Obama’s stimulus program. How will China’s near-monopoly on the production of rare earths impinge on Obama’s “green jobs” strategy?
America’s dependence on Chinese rare earths is not, by itself, a cause for alarm, since new mines are being developed at Mountain Pass, Calif. and in Australia, India, Vietnam, and elsewhere. What is far more worrisome is China’s determination to take the lead in ALL facets of green energy technology, including wind, solar, and all-electric vehicles. Unless the United States recognizes the vital importance of retaining leadership in this field and allocates the funds needed to pursue cutting-edge technologies, we are destined to become a second-class industrial power while China will zoom ahead of us.