US Faces Substantial Obstacles to Increasing Rare Earths Production

Reader James S. highlighted a useful article at the MIT Technology Review, “Can the U.S. Rare-Earth Industry Rebound?” Our only quibble to this solid piece is its summary, which underplays some critical aspects of the article:

The U.S. has plenty of the metals that are critical to many green-energy technologies, but engineering and R&D expertise have moved overseas.

In fact, the while the article does discuss US versus foreign engineering expertise in rare earths mining, it describes in some detail how difficult rare earths mining is in general (more accurately, not the finding the materials part, but separating them out) and the considerable additional hurdles posed by doing it in a non-environmentally destructive manner. Thus the rub is not simply acquiring certain bits of technological know-how, but also breaking further ground in reducing environmental costs.

And this issue has frequently been mentioned in passing in accounts of why rare earth production moved to China in the first place. It’s nasty, and advanced economies weren’t keen to do the job. China was willing to take the environmental damage. For instance, the New York Times points out:

China feels entitled to call the shots because of a brutally simple environmental reckoning: It currently controls most of the globe’s rare earths supply not just because of geologic good fortune, although there is some of that, but because the country has been willing to do dirty, toxic and often radioactive work that the rest of the world has long shunned.

From the MIT Technology Review:

Getting from rocks to the pure metals and alloys required for manufacturing requires several steps that U.S. companies no longer have the infrastructure or the intellectual property to perform….

In the 1970s and 1980s, the Mountain Pass mine in California produced over 70 percent of the world’s supply. Yet in 2009, none were produced in the United States, and it will be difficult, costly, and time-consuming to ramp up again…

The two mines that will be stepping up production soonest are Mountain Pass, being developed by Molycorp, and the Mount Weld mine, which is being developed by Lynas, outside Perth, Australia. Mountain Pass has the edge of already having been established. But the company cannot use the processes used in the mine’s heyday: they’re both economically and environmentally unsustainable.

Several factors make purification of rare earths complicated. First, the 17 elements all tend to occur together in the same mineral deposits, and because they have similar properties, it’s difficult to separate them from one another. They also tend to occur in deposits with radioactive elements, particularly thorium and uranium. Those elements can become a threat if the “tailings,” the slushy waste product of the first step in separating rare earths from the rocks they’re found in, are not dealt with properly…

Mountain Pass went into decline in the 1990s when Chinese producers began to undercut the mine on price at the same time as it had safety issues with tailings. When the Mountain Pass mine was operating at full capacity, it produced 850 gallons of waste saltwater containing these radioactive elements every hour, every day of the year. The tailings were transported down an eleven-mile pipeline to evaporation ponds. In 1998, Mountain Pass, which was then owned by a subsidiary of oil company Unocal, had a problem with tailing leaks when the pipeline burst; four years later, the company’s permit for storing the tailings lapsed.

Meanwhile, throughout the 1990s, Chinese mines exploited their foothold in the rare-earth market. The Chinese began unearthing the elements as a byproduct of an iron-ore mine called Bayan Obo in the northern part of the country; getting both products from the same site helped keep prices low initially. And the country invested in R&D around rare-earth element processing, eventually opening several smaller mines, and then encouraging manufacturers that use these metals to set up facilities in the country.

Yves here. I’d be curious for input on this point from any informed readers. China has allegedly made R&D advances, but are these processes aimed at increased efficiency? If so, they’d give China a cost advantage, but not contend with environmental issues; indeed, it’s conceivable that the toll with these new processes is even worse. Back to the article:

By 2012, Molycorp expects to produce 20,000 tons a year, and under its current mining permits could double capacity to 40,000 tons. Sims also says the company will produce rare-earth products at half the cost of the Chinese in 2012. According to the company, these savings will be made possible by several changes, such as eliminating the production of waste saltwater. Molycorp will use a closed-loop system, converting the waste back into the acids and bases required for separation and eliminating the need to buy such chemicals. The company will also install a natural-gas power cogeneration facility onsite to cut energy costs.

But Ames Lab’s Geschneidner notes that one major source of cost in the separation process can’t be eliminated–the fact that it simply takes a long time. Milled rock is shaken again and again in a mixture of solvents to separate the elements by weight; depending on the ultimate purity that’s required, this must be done 10,000 to 100,000 times. The result is then sold as a concentrate or treated to produce rare-earth metal oxides.

Even if Molycorp does succeed in reducing the costs of separation by half, the next step in production may cause a hiccup. Rare-earth oxides and concentrates do have a market, for example as catalysts for the petroleum industry, but they can’t be made into magnets. To make magnets, rare-earth oxides must first be converted into pure metals, a process that produces caustic byproducts, and is done solely in China today. Sims says that Molycorp is investigating pathways that are environmentally friendly and aren’t covered under intellectual property owned by foreign companies. These metals must next be made into alloys suitable for the magnets, another capability that’s concentrated overseas, mostly in Japan and Germany.

The story is not quite as dire as one might conclude from this article, which focuses strictly on the US mining question. The US is not the only country looking to gear up its rare earth production. Rare earths can be extracted from used products, particularly cars. And some products can be designed to eliminate the use of rare earths, although the tradeoff is typically more bulk and weight. Nevertheless, it is clear that advanced economies will need to make a lot of adjustments, including more investments in R&D and product design, to contend with the challenge of rising demand versus constrained supplies of rare earths.

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  1. ebear

    “The nation is losing the Rare Earth Elements race with China because of complacent miscalculations, penny-pinching, budget cutbacks, incredibly confused mismanagement, and wasteful rivalries and jealousies. . . We are facing a gap on which we are gambling with our survival.”


    1. LMM

      Multiply this times an untold number of different industries. We learn the the North won the civil war because it had all the industry. The South was agrarian. Our factories are rusting and the intellectual know how is gone.

    2. ebear

      I was hoping someone would notice the quotes and try and figure out where I stole that from. It’s from John F Kennedy’s infamous “missle gap” speech back in the 60’s. So, was there really a “missle gap” and is there really an REE shortage? I have my doubts.


  2. jim

    Design the dang stuff out of products, and start going to hydrogen cars while were at it!

    No point in carrying around big heavy batteries which limit driving range, when a source of hydrogen can be used instead. The only exhaust product is water from hydrogen cars anyways. Clean and green….

    1. CingRed

      Jim you have no concept whatsoever of where hydrogen comes from or what it takes to get it. You have not studied the problems the use of hydrogen in vehicles face nor why it is in fact a rather poor fuel. Let me give you just a very “brief” summary of some of the issues surrounding hydrogen as a fuel: 1. There are no hydrogen mines. You can get it from 1 of 3 primary sources, water via electrolysis, which requires more electrical energy than you will get back from burning the hydrogen. Currently over 70% of electricity comes from the burning of fossil fuels and you want to do even more of that to get hydrogen. Intelligent. You can distill it out of the atmosphere, this requires massive amounts of electrical energy, again largely obtained from burning fossil fuels. You can get it by the dehydrogenation of fossil fuels. This also takes more energy that you will get back from the reaction and you have a nasty by product call carbon dioxide your favorite green house gas. In short, there currently is no easy way to get the hydrogen you want to burn without inputting a ton of energy into getting it mostly from burning fossil fuels. 2. Hydrogen is a very low energy density fuel compared to hydrocarbons. You have a couple of ways to carry it in your car, under high pressure (have you seen a high pressure canister explode as a result of impact rupture? Not pretty.) or in a hydrogenated matrix (sort of like a sponge) and you’ll be stopping every 100 miles to fill up because you can’t get very far on it unless your vehicle is the size of a chevy suburban with most of the back made up of the “sponge” material. 3. Hydrogen wrecks havoc with many metals. It is called hydrogen embrittlement. It means that your engine is going to start coming apart in pretty short order. So go out and get yourself a high powered engineering degree and come up with solutions to these problems that have not been able to be solved so far by all the brilliant engineers we already have and then start talking about your hydrogen powered cars.

  3. OHOA

    This is an issue where non-technical people seem to shore up arguments with no real technical basis to serve their agenda.
    I am no chemical engineer or a material scientist or a metallurgist. However, these arguments about technical difficulties implying that sky will fall are so weak. Let us take them one by one.

    1. Thorium contamination of rare earths and the hazard it poses to environment etc.

    Thorium is not exactly useless.
    Thorium has been processed and used in lamp mantles and welding rods since the late 1800s. In those days the monazite deposits used to be processed for isolating thorium and throwing neodynaium and other rare earths away. The process now is to keep the rare earths. Thorium can also be used to replace Uranium in the nuclear industries. The main obstacle has been the contamination with U232, but there is a large effort to start replacing uranium with thorium because useful Uranium deposits will last for a 100 years, whereas there is enough thorium in the Americas for several thousand. In fact US maintains a stockpile of about 3000 tons of thorium for this very purpose.

    If US can overcome the mammoth task of developing the PUREX process (pluotonium uranium extraction) How difficult can be the puny obstacle of merely isolating the rare earths. We may be lousy at financial engineering but in terms of real engineering we are the greatest country on earth, Germans and Japanese included. And when you consider that Germans and Japanese will be working in tandem with the US on this, technical hurdles should be a very minor issue.

    2. Cost and the time involved: This is another one where the NYT op-ed people have no clue about how much time it takes to set up a plant. As long as there is a demand guaranteed by US and Japanese state agencies, this should be a short order. Metal isolation in the most part is a proven, age old, well healed technology. It is really not “rocket science”. Shaking milled rock 100000 times seems mind boggling, but these are automated processes on a a conveyer belt system. If you have a thousand shakers with material going from one to the next and so on, and if the material stays in the shaker for one day, it is out in about 3 months and after the initial 3 months, there is a continuous flow of production on an instantaneous basis. Perhaps they should have a real mining engineer comment on this rather than journalists raise buggaboos.

    3. Loss of technology and intellectual property etc. This is so ridiculous. Just because the tech was sent to China, that does not mean the documents were burned afterwards to the last page. Most of the technical info is kept and can be retrieved. It is probably in the public domain, even. It’s not as if the Chinese are going to come sue the US companies for not being kosher on the IP issue. That would be ridiculous.

    4. Moving on to technologies not incorporating rare earths: This is again people commenting on technical things that they know nothing about. The Neodynium iron boron magnets are incomparable in their magentic stength on weight basis, they cannont be replaced with electromagnets and there is no need to. The Samarium cobalt magnets have a high thermal resilience and the best there is. One does not go from lithium to lead batteries just because lithium becomes difficult to obtain. That is retrogressive.

    As long as there is a will to get rid of this pseudo leverage for the increasingly recalcitrant and obtuse chinese, it can be easily done and probably in a short time. And even if it was difficult and slow, it HAS to be done so we need to start yesterday and not cogitate about how difficult it is going to be.

    1. Yves Smith Post author

      This is not a NYT op ed, the article is from the MIT Technology Review. There is only a teeny snippet from the Times (and that was an article, not an op ed). So you are saying the Technology Review is incompetent re engineering?

    2. Glen

      Well, as a mechanical engineer/material scientist that specialized in metallurgy and has been a manufacturing engineer for thirty years, I can tell you there is a significant price to pay for outsourcing industries. You loose hands on expertise, your trained workforce, and at some point your practical R&D goes away as well. Our rule of thumb is that if you outsource an industry, then in five to ten years (depends on the industry. technology and government backed R&D effort) the “cheap labor” that runs the plant is going to know the industry, not you. Engineers have watched American industry being outsourced for thirty years now, and the end results are very predictable – you become a third world country at some point.

      Strip mining the world’s largest economy for a quick buck is no way to run a country’s industrial policy, but that’s really all we’ve had since Reagan.

  4. OHOA

    A correction in the above post, It should be MIT review instead of NYT-op ed.
    Also the scientist that they interviewed was Dr. Karl Geschneidner whose expertise is in sophisticated cutting edge applications of the rare earths. This does not mean that he has any real experience at all of the issues involved in actual mining of these materials. It is like asking an eminent and highly specialized Nobel winning scientist who uses a sophisticated biological agent to probe the intricate workings of genetics, about the difficulties involved in setting up of a plant for making the stuff in large quantities. In terms of rare earth production, the answers need to come from people who actually are on the production line.

  5. emca

    I tend to agree with OHOA, but take issue with his (her?) rhetoric on non-technical opinion. Much information is online and is digestible by a non-technical person, given the time and will (even NYT writers).

    With that in mind, the problem from the U.S. standpoint is not technical, intellectual, environmental, or capital (although currently it may be a problem), but priorities and will. By those close to the action, the realization of what was occurring dates back to at least 2005, when the Chinese began to restrict exports of the commodity, perhaps even earlier (certainly China were cognizant of the situation when they began ramping-up her REE supply chain in the 80’s and 90’s).

    The first leg, extraction, was and is already in the process. It is being boosted now by a sharp increase in world price. (Some would argue this is do to China’s overplaying their hand in territorial disputes with Japan then compounding their error by pushing it into other arenas; leave that as it may, REE and non-Chinese sourcing of materials and goods should have been a discussed topic before NYT headlines).

    The next step is a decision, not by scientists or by highly skilled technicians, but by investors and politicians (and citizens who vote for them). This is something that is doable in this country (and other countries with similar concerns, it is of a strategic concern also) and if not immediate gratification (you dig your hole, now you climb out of it), then over a long haul is a prudent decision.

    The bigger issue is not China, but the U.S. Will the U.S. think and do long term, or again sell for short-term profit and convenience?

    This is a question on which the U.S. has faired poorly on in the past. With REEs though, I’m a little more optimistic.

  6. Snowman

    OHOA, you say, “Most of the technical info is kept and can be retrieved.” This is far from sufficient to recreate the working extraction process. Engineers learn from books and documents, but it takes years of practice to best apply this knowledge. This is why we have internships, practicums, and an engineer-in-training designation. Once you loose the skilled practitioners and their meta-knowledge of how to apply the documented learnings of the profession, it can take years to get it back. I have been a practicing engineer for over 30 years. Your dismissal of Dr. Karl Geschneidner is quite disheartening as he is a well respected metallurgist, and by your own admission you are not.

    1. Glen

      Thank you. As another engineer that’s watched our manufacturing base being gutted for a long time now, these guys that think you can just read about it and do it are, well, clueless.

      I’ve seen all sorts of things “blamed”, environmental law, unions, etc, but underneath it all always seems to be a CEO going for cheap labor even in industries where labor costs of the finished produce are very small, only a couple of percent. Henry Ford could squeeze a nickel better than any of the current clown CEOs we’ve got and even he was smart enough to RAISE wages so that his workers could afford his products.

  7. Richard Lyon

    The neoliberal agenda has been as much about outsourcing environment “externalities” as about outsourcing jobs. So far the people behind the curtain haven’t had to bear much cost for the impact on American labor, but here is an example of the power of control being shifted to China. It may be only a crack in the wall, but it could be a harbinger of things to come.

  8. hedda lettuce

    ‘Environmental damage’ is a code word for ‘killing human beings’.

    You can do mining safely, or you can do it cheaply, not both. If you choose option number 2, more people will die. It’s happening right now in China.

    They didn’y have 30 guys come out of the hole, they had 30 more guys die in a mine that is notorious for killing people.

    As much as Yves talks about how she foresaw the financial crisis, Chinese dissidents have been talking about this for 20+ years.

    It is very simple. You control the media, you can use forced labor, you just kill people. Call it an ‘accident’ when you have no safety procedures in place, when you ignore engineering principles, when you spew poison into people’s drinking water, when you have no meaningful FDA or EPA equivalent.

    Go read A Day in the Life of Ivan Denisovitch if you can’t get the picture. Or better yet The Jungle, then realize that if Upton Sinclair lived in modern China, he would be in a labor cap.

    god finance people are so @#$@ stupid.

    1. Yves Smith Post author

      I have never said I predicted the financial crisis. I have put some of my old posts with no added commentary as Summer Reruns.

  9. Orkut Cornimus

    Dear Financial Folks,

    It is very simple. You get rid of the EPA, you get rid of independent labor unions, you get rid of the FDA and the NRC and every other regulatory agency, then you take us back to the 1800s. Production was cheap. People could be killed easily in ‘accidents’, and you simply get more to do the job.

    Please watch Matewan or North Country or read A Day in the Life of Ivan Denisovitch or The First Circle or One Dies, Get Another, or read articles about the shipbreaking yards in India if you don’t understand.

    It’s called human life = expendable, for profit. That’s the way dictatorships work.

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