dollar range. Dudley J. Kingsnorth, executive director of Industrial Minerals Co. of
Australia, based in Mount Claremont, reports that worldwide demand for rare-earth
oxides in 2007 was on the order of 124,000
metric tons and valued at $1.3 billion.
Even more valuable are the products
made from these compounds. For example,
the rare-earth magnet market is estimated
to be worth $9 billion. Yet the world’s
supplies of neodymium and other
rare-earth materials are provided
almost exclusively by manufacturers in China.
“Today, nearly 100% of the
world’s rare-earth metals and more than
94% of rare-earth oxides come from China,”
says Peter C. Dent, vice president for business development at Electron Energy, in
Landisville, Penn. Electron Energy designs
and manufactures high-performance rare-earth magnets and magnet assemblies, specializing in samarium cobalt products.
“In 1970, we were one of the first companies in the world to produce rare-earth
magnets,” Dent says. By the late 1980s and
early 1990s, the American magnet industry
reached its peak, with more than 20 companies manufacturing a large variety of magnets. But then the 1990s witnessed a decline
and eventually a wholesale migration of this
industry to China, according to Dent. “Now
we find ourselves to be the last rare-earth
magnet maker in the U. S.,” he says.
According to industry watchers such
as James Kennedy, owner and president
of Wings Enterprises’ iron ore mine in
Sullivan, Mo., China has maneuvered effectively since
the mid-1980s to establish
a worldwide monopoly on
rare-earth resources. Aiding its effort to corner the
market is China’s tremendous rare-earth
mineral wealth.
U. S. Geological
Survey reports indicate that
China possesses roughly 52% of the world’s
known rare-earth reserves. By comparison,
the U.S. is believed to have the second-largest share, at about 13%. Russia and Australia each have 5–6% of the known reserves.
India, Canada, Greenland, and a few other
countries also have appreciable quantities
of rare-earth minerals.
In the 1990s, China’s low production
costs rapidly deflated rare-earth prices, driving many non-Chinese mining and processing operations out of business. Molycorp,
SHU T TERSTOCK (ALL)
RARE BUT NOT UNCOMMON
Contrary to their name, some rare-earth minerals are common. Many
products that depend on their unique
properties are also common.
Hybrid-electric cars typically contain
about 10 kg of lanthanum in the form
of nickel-metal hydride batteries
and smaller amounts of neodymium,
praseodymium, dysprosium, and
terbium in electric motors and
generators. Cerium is used to polish
automobile glass and is found together
with zirconium in catalytic converters.
Electricity-generating windmills
depend on magnets that weigh 1 ton
or more and contain hundreds of
pounds of neodymium.
Lightweight and strong
neodymium-iron-boron magnets
in today’s computer disc drives
help keep laptops small, and flat-
panel displays and compact
fluorescent light bulbs depend
on europium and other
rare-earth phosphors
for color contrast.
Rare earths also play key roles in lasers,
radar equipment, precision-guided
munitions, and other weapons systems.
owner of the largest U. S. rare-earth mine—
Mountain Pass in southern California—
mothballed its mining operations in 2002.
In 2005, prices started to rise as China began
limiting production and imposing export
tariffs on some rare-earth products. Then
China began restricting rare-earth exports
in 2006 and further tightened export
quotas in the first half of 2010.
The rare-earth news from China
continues. Just last month, China’s
Ministry of Commerce announced
plans to further cut export quotas
by 72% for the second half of 2010.
That move caps foreign shipments
at 7,976 metric tons, down from 28,417 tons
for the same period last year. And earlier this
month, two of China’s largest state-o wned
rare-earth mining companies announced
plans to launch “a new unified pricing system,” a move that will likely give China even
greater control over the availability and supply of rare-earth compounds. No doubt the
action will drive up prices of these valuable
resources around the world.
NOT SURPRISINGLY, the news from Chi-
na this summer is making Electron Energy
and other U.S. companies jittery. “We’ve
seen rare-earth prices increase steadily in
recent years,” Dent says, “but until now, we
have been able to get the supplies we need.
We’re very concerned now about the long-
term availability of these materials.”
So is Molycorp CEO Mark A. Smith.
“China is doing what it feels it must in order
to maximize the value of its resources,”
The view from China is somewhat
different. “China’s new policy is beneficial
to rare-earth industries across the world”
in that it will force other countries to de-
velop alternative sources of rare-earth ma-
terials, says Chun-Hua Yan, a professor of
inorganic chemistry at Peking University.
Yan also heads the State Key Laboratory of
Rare Earth Materials Chemistry & Applica-
tions, the country’s premier research facil-
ity in the field.
Yan describes China’s near monopoly in
rare-earth production as “an unreasonable
