Monday, May 18, 2009

Wind: Why rare earth metals matter

Ten days ago I went on a bit of a binge with:

China tightens grip on rare earths

With a Name Like Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., it has to be good
( 600111:Shanghai)

Wind: So Why the Interest in Rare Earths?

As we saw in that last post, rare earths are a key to modern magnets used in wind turbines (and hybrid cars):

If China commits to producing 100 gigawatts of wind generated electricity by 2020 it will place this goal in its next two five-year plans as part of the official statement of the goals for the Chinese utility industry. If this happens then China's recent takeover of the Australian rare earth mining industry makes perfect sense. The Chinese, you see, like to make long term plans not only for economic goals but also for implementing the necessary steps in the value chain to achieve them.


To make the most efficient, lightest weight, lowest service wind turbine generator of electricity takes one ton of the rare earth metal, neodymium, per megawatt of generating capacity. This to to build the neodymium-iron-boron permanent magnet necessary for the generator to function.

The current production of neodymium is around 20,000 metric tons a year, and all of it is produced in China.

The world's demand for neodymium for current uses is now in balance with production.

If none of the world's current demand becomes obsolete, and in fact, if it grows then where is 100,000 metric tons of neodymium going to come from for China's projected 100 gigawatts of new wind generated electricity, if China opts for 100% neodymium-iron-boron permanent magnet type electric generators??>>>MORE
Today MineWeb reports:
Tom Vulcan, rare earth metals reporter for, recently had the chance to speak in Washington, D.C., with Mark Smith, CEO of Molycorp Minerals LLC. With its mine at Mountain Pass, Calif., Molycorp currently owns and runs the Western Hemisphere's only rare earth ore mining operation.
Mark Smith, CEO, Molycorp Minerals (Smith): Actually we don't produce metals as of today. We mine the ore out of the ground, crush and mill the ore to create a concentrate, and then we go through a very sophisticated processing step to produce the rare earth oxides. There is only one country in the world today that can take the oxides and convert them to metals, and that's China.

Vulcan: Has that always been the case historically?

Smith: No, as a matter of fact, at one point the U.S. did have rare earth metal production capacity. However, it hasn't had that capacity for probably about 10 years now. Japan had that capacity for quite some time as well. It was probably in the last three to five years that Japan stopped making rare earth metals, largely because of the high cost of electricity.

Vulcan: What would you say was the major factor leading to the demise of the U.S. rare earth metals industry?

Smith: I would suggest that the demise was due to the fact that more and more of the rare earth manufacturing supply chain moved from the United States to China, including metal production, alloying, strip casting, magnetic powder production and, ultimately, magnet production. We do not make any neodymium iron boron magnets in this country today.

Vulcan: Have we ever made any?

Smith: Yes, the U.S. actually invented the technology. It was a combined research effort between the Air Force and General Motors that discovered neodymium iron boron magnets. They created a new company called Magnaquench, which was located in Indiana. In the early 2000s, a Chinese company came in and bought Magnaquench. Within two years, they had shipped all of the manufacturing equipment over to China. That was our last capability of producing neodymium iron boron magnets.

Vulcan: Goodness!

Smith: I want to make sure, however, that we make one point absolutely clear on behalf of Molycorp Minerals, and that is that we have no hostility and no bad thoughts whatsoever about the Chinese rare earth industry. The Chinese have a wonderful rare earths resource in their country. They have done an excellent job for the last 20 years of taking the ores out of the ground, producing oxides, metals, alloys, powders and magnets.

In the last 10 years, they've taken what used to be a 40,000 tonne per year market for rare earth oxide equivalent, and turned it into what is now about a 125,000 tonne per year market worldwide.

Worldwide demand is predicted to be over 200,000 tonnes by about 2014. China has done an outstanding job of making those rare earths available and expanding the uses of rare earths. Our concern isn't the Chinese and their production capabilities, our concern is the Chinese and their consumption capabilities. Many experts have predicted that the Chinese will be internally consuming many of those rare earths, if not all of them, by about 2014.

Vulcan: So there's not going to be anything left over for anybody else....MORE

The May issue of The Atlantic came in from a different angle:

Clean Energy's Dirty Little Secret

The unincorporated community of Mountain Pass, California, has little to recommend it to tourists. A scraggly outcrop of rocks and Joshua trees alongside Route 15, it has no kitschy landmarks like the 134-foot-tall thermometer that nearby Baker, California, installed in the Mojave Desert, and no casinos like Las Vegas has an hour up the road. But behind a Band-Aid-colored industrial gate lies an attraction of sorts: a 55-acre open-pit mine created by a 21st-century gold rush, one result of the effort to keep the world from getting hotter than it already is.

Mountain Pass’s mine contains a rare-earth ore that yields neodymium, the pixie dust of green tech—necessary for the lightweight permanent magnets that make Prius motors zoom and for the generators that give wind turbines their electrical buzz. In fact, if we are going to make even a few million of the hybrid and electric cars that are supposed to help rescue the planet from global warming, we will need to double production of neodymium in short order.

But in 2006, nearly all of the world’s roughly 137,000-ton supply of rare-earth oxides came from China. And over the past few years, China has cut exports to nurture its own permanent-magnet industry, sending the price of neodymium oxide to a high of $60 a kilo in 2007. This worries analysts like Irving Mintzer, a senior adviser to the Potomac Energy Fund who sees shortages stifling clean-tech industry, and worse. “If we don’t think this through, we could be trading a troubling dependence on Middle Eastern oil for a troubling dependence on Chinese neodymium.”

Rare earths are actually fairly common. What’s rare is finding deposits that can be mined profitably, in part because most contain radioactive thorium. Relatively speaking, Mountain Pass—whose rare-earth deposits were discovered in 1949—is not too radioactive, and through the 1950s the ore was mostly used to make flints for lighters. In the 1960s, the pit grew deeper as demand increased for the rare-earth element europium, which was used to create the red tones in color TVs. In fact, until 1989, the expanding pit at Mountain Pass supplied most of the world’s rare earths.

But in the early 1990s, cheaper Chinese rare earths began eating into the mine’s market share. Deng Xiaoping famously compared China’s abundance of rare earths to the Middle East’s huge oil reserves. As Chinese ore came onto the market, the price fell from $11,700 a ton in 1992 to $7,430 a ton by 1996 (in constant dollars). Amassing strategic supplies suddenly seemed old-fashioned, and the U.S. government began selling off its stocks of minerals....MORE

I think we got us a meme!