3:33pm

Wed February 2, 2011
Business

Rare Earth Metals Crunch Prompts Concern in West

Rare earth metals such as cerium and tantalum are needed to make everything from iPods and hybrid car batteries to wind turbines.  China is the world’s biggest producer of rare earths.  And the country’s looming decision to cut off exports could put a major strain on global supply. This has some technical colleges in the West ramping up their curriculum to train students to meet future demand. 

Inside a well-lit, modern classroom at the Colorado School of Mines in Golden, about a dozen students and a few mining engineers auditing the course, are about to hear the big secret about rare earth metals. Their light-hearted professor, Corby Anderson, tells them, they’re not really that rare.

“There are a lot of rare earths in Colorado, we know where they’re at,” he says.

But Anderson says getting at them is another story.  So after an hour plus, technical lecture about the metallurgy of rare earth metals, Professor Anderson says don’t feel completely lost, the takeaway is this.

“Strangely enough, as demand for materials and energy has gone up, a lot of our institutions of higher learning that carry on the teaching and research in these areas; it’s diminished in North America and maybe worldwide,” Anderson says.

That’s because a few decades ago, most of the mining and manufacturing expertise around rare earth metals was outsourced to China. But now China is on the move, producing about 95% of the world’s supply and soon expected to gobble up everything it used to export. 

“A lot of the expertise is gone, and suddenly we find ourselves in a game without any training and in some cases without any resources,” Anderson says. “I don’t think it’s a political agenda, it’s an economic agenda.”

And while Anderson worries about not having enough trained workers here in the U.S., some are sounding the alarms about what the situation in China could mean for clean energy development.

“I’m not here to say that the world is going to come to an end because we can’t make our own wind turbines,” says Keith Delaney, executive director of the Rare Earth Industry and Technology Association.

The association is a non-profit based in Greenwood Village, Colo, that advocates for the development and commercialization of rare earth technologies.

“But what we are talking about is years and years of delay in rolling out these technologies,” Delaney says. 

However Delaney says, the good news is there’s great opportunity in rare earth metals for countries like the US and Australia.

And he would know.  He used to work for this country’s biggest player in the industry, Colorado-based Molycorp.

The company is about to reopen a long shuttered rare earth metals mine on the California-Nevada border. The prospect of a western supply chain opening has sent stocks for Molycorp and other companies soaring. 

But Tyler Hamilton looks upon this development with a bit of skepticism.   

“I think part of the panic is driven by companies that are trying to boost their stocks,” says Hamilton, a business columnist with the Toronto Star newspaper in Canada, who also runs a clean tech blog.

“I think that the impression out in the marketplace is that certain products or technologies are 100% dependent on rare earth elements, and that’s not the case,” he says.

Take for example hybrid cars and wind turbines, says Hamilton. Some rare earth metals are essential for batteries in hybrids like the Toyota Prius.  But the industry is moving toward fully electric cars which run on lithium batteries.

A spokeswoman for Danish wind blade manufacturer Vestas meantime said the possible export crunch isn’t on their radar for now. 

Nevertheless, a possible gold rush for rare earth metals here in the West is on the radar of conservation groups.  They worry permitting regulations could get loosened amid all the fear over China.  Glen Miller has been tracking the developments as chair of the graduate program for Environmental Science at the University of Nevada.

“I think the environmental community as a whole is going to oppose any reduction in permitting requirements,” Miller says. “They’re (the industry) fairly tried and true, and certainly not over-regulated, particularly on public lands.”

Miller says this kind of thing has happened before. In the 1980s, Congress drafted a list of minerals it said needed to be mined right away. 

But even Miller says rare earth metals might be different.  Molycorp’s California mine – the largest known rare earth deposit in the US – is already an established mine. And its reopening, Miller says, could ease up the stressed supply chain.

That would certainly buy some more time for institutions like the Colorado School of Mines, which is adding more and more rare earth curriculum.  The aim is to better prepare students like Carla Peabody for whatever the future in rare earths holds. 

“There’s going to be jobs in it, so, with the economy the way it is, it’s a good idea to go into a field where there’s jobs,” Peabody says.

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