Mined in China: Reducing Dependence on Chinese Rare Earths
China has been a hot topic since the start of the pandemic. The world has looked to China for answers in the battle against the virus and its origin, while still depending on them for major resources to keep businesses running. In the first of our COVID-19 blog series, we discussed how shutdowns across China have forced many companies in the US to realize the depth of their dependence on Chinese imports.
Global interdependence is not a new concept. There are several industries in which global powers are at the mercy of China’s supply chains. China’s supply of rare earth elements is particularly troubling since these elements are used in many industries that make up the backbone of the US economy. From 2014-2017, China supplied 80% of the US’s rare earth consumption. These elements made their way into aircraft engines, medical devices, TV and computer screens, and high strength magnets for cell phone speakers, wind turbines and electric vehicles.
China has been the primary global supplier of rare earth elements for decades. They are responsible for 70% of global output despite only controlling 1/3 of the world’s rare earth element reserves. China’s government has poured significant resources into developing rare earth mining and processing infrastructure, and their lax regulations in the REE industry have created serious problems. In 2012 even China’s State Council reported that rare earths operations in the country cause “increasingly significant” environmental problems year after year. 50 years of mining and processing has “severely damaged surface vegetation, caused soil erosion, pollution, and acidification, and reduced or even eliminated food crop output.” The council also stated that most Chinese rare earth plants produce wastewater with a “high concentration” of radioactive and toxic residue.
Rare earth mining and processing are uniquely challenging. While not exactly rare, these elements only exist in high enough concentrations to be pit-mined in certain locations – like the Bayan Obo region of China or the Mountain Pass mine in California. The fact that REEs are so chemically similar to each other, means that they usually coexist in a single geological ore formation. That similarity between elements also makes them very difficult to separate from each other. This attribute of REEs called companionality makes it nearly impossible to isolate a single metal for mining and results in large amounts of waste as the refined rare earth oxide is extracted from ore. Mining and separating rare earths and companion elements require massive amounts of chemical solvents, acids, bases, energy and fresh water. The process is very wasteful and harmful to the environment if it is not managed properly.
While mining is the known and accepted method for acquiring these metals, it is important to consider other options – replacement and recycling. Rare earth elements are notoriously difficult to substitute because of the unique properties and performance-enhancing capabilities derived from their electron structure. Despite these challenges, Hitachi and Nanosys were each able to develop products that successfully replaced rare earths in their application. Apple designed a robot to recover rare earth metals from devices that typical recyclers did not have the capability to separate. It is this type of research and deployment into earth-abundant alternatives and recycling that will contribute to the successful shift away from China’s rare earth supply.
China has succeeded in rare earths by continually driving down costs, and by willingly taking on the environmental damage and human health risks associated with such low costs. Paired with the high costs and regulatory difficulty of establishing new mines in other places with REE deposits, China maintains dominance while other countries struggle to even get a foothold in the market.
This time last year, China’s President Xi Jinping alluded to a cutoff of rare earths sent to the US and prioritization of China’s domestic consumption of rare earths. These comments raised concerns in the US and spurred efforts to secure a domestic supply of rare earths. Last week, Ted Cruz (R-TX) proposed a bill to fund and revive the US’s domestic rare earths industry with tax breaks for mine developers and the companies who purchase their products. While this moves us away from dependence on China, returning rare earth mining to the US will require diligent planning and management to avoid the environmental and human fallout seen in China.
Onshoring rare earth production back to the US has several implications when compared to the current situation. The US generally has higher standards for workforce safety when compared to much of the world, meaning domestic rare earth production should come with a much lower human health cost. But the market needs to be prepared for a higher price tag. US-mined rare earths will likely be much more expensive due to the startup costs of new mines, tighter safety regulations, more expensive labor and higher standards for environmental consciousness in mining and processing. Cruz’s proposed bill would place the burden of the higher prices on taxpayers.
The bill incentivizes mines and manufacturers with large tax cuts in order to jump-start the rare earth industry domestically. It eliminates the sticker shock for manufacturers with a tax break of up to 200% of the price tag of US rare earths, but that break is just another subsidy that comes out of American public’s pockets. The new price tag will reflect something much closer to the full cost of using REEs. No more outsourcing waste, human health problems and environmental damage to another country just because they’re willing to take it on.
By mining for rare earths in the US, we will reduce the global environmental and human rights impact of our consumption. Bringing rare earth production back to the US will also diminish some dependence on China’s rare earth supply but it does not fully address the bigger issue: we need to reduce our consumption of rare earth materials. In order to lessen the environmental risks that are unique to rare earth mining, demand for rare earths must decrease. Through the exploration of alternative earth-abundant materials, technology that makes more efficient use of rare earths, and recycling programs, we can decrease the amount of mining required to fill domestic demand and reduce those impacts even further.