Shifting from Arab oil to China's neodymium?

Deep into the periodic table, where the elements take on unfamiliar names like neodymium, erbium, terbium and ytterbium, lies a row of metals that are crucial to building wind turbines and electric cars. A new group wants to make sure that the United States has enough of these so-called rare earth elements to carry out its clean energy plans.

The metals already show up in many parts of daily life, such as a computer's hard drive or the earbud headphones of an iPod. But their mass production carries a secret: Virtually all rare earth materials get mined and processed in China.

The Rare Earth Industry and Technology Association (REITA), which is less than a year old, wants to make companies and the government aware of the issue -- before a clean-energy scale-up leaves the United States dependent upon a near-monopoly.

Keith Delaney, REITA'S director, managed to get onto a panel at an electric-car conference in Washington this week. He delivered a stark message to the enthusiasts whose usual focus is rushing the pricey cars into the mainstream.

The current Toyota Prius, a hybrid, uses about 4 pounds of rare earth materials, he said. A car with a heftier battery, such as the Chevy Volt, needs more. And a single wind turbine uses about 500 pounds.


Engineers have no way around this, he said: To keep these machines light and efficient, the metals are irreplaceable. Specifically, their magnetic properties are needed for the best-known technologies for electric motors and wind turbines.

"We're stuck with rare earth technology for the foreseeable future," he said. "The green energy goals of the nation really can't be met without rare earth. They're indispensable in so many applications."

"Rare" earth metals are no rarer than many other metals in the Earth's crust, such as copper and tin. What's rare about these metals is that they don't often cluster in rich lodes that are easy to mine.

Not in your backyard, in quantity

As Delaney put it, rare earth metals would likely turn up in any backyard -- though not in any concentration worth digging up.

Through sheer geological fortune, China has the densest veins of rare earth in the world -- a resource that has made it not only a major exporter, but also a major supplier of the second- and third-place exporters.

In 2007, 90 percent of the United States' imports, measured by weight, came from China. Only one company has any production in the United States, and in 2008, it didn't produce any.

That could spell a dangerous trend, Delaney said. By his estimates, world demand for rare earth metals is growing 10 to 15 percent each year, thanks largely to a growing appetite for electronics.

But as the world shifts to low-carbon technology, he said, China's rare earth reserves will gain importance -- not least to the Middle Kingdom itself.

Wind is the wild card

"The wild card is wind," Delaney said. Two companies -- one American and one Australian -- are poised to open new mines in the next few years, but he said the accelerating Chinese renewables sector could sweep up the supply: "If demand for wind turbines goes through the roof, all bets are off."

Delaney doesn't just want to raise awareness: He hopes companies and governments will begin the search for more reserves.

Automakers have tended to consider rare earth a distant part of their supply chain, he said -- one that they aren't in a rush to scrutinize and protect.

But REITA has gained the attention of General Electric, a leader in wind turbines and a company that will be counted on for much of the clean technology built by the United States. Other members include Molycorp and the Colorado School of Mines.

Arctic veins, but investors seem chilled

Delaney wants to spur research that can locate more mines, as well as infrastructure spending. He said a ribbon in the northern reaches of Canada, near the Arctic Circle, holds promise. But the site is so remote that miners would need roads and water pipes before a single pound of metal was reaped.

Observers say dozens of exploration companies have pitched sites to investors, but they've found it difficult to prove their worthiness. Any potential mine demands a thorough feasibility study. The absence of nearby infrastructure means additional costs. And rare earth mines tend to be smaller than those for other metals, meaning they yield less cash for every infrastructure dollar invested.

The entire process can take up to 12 years, said Dan Cordier, a rare earth specialist for the U.S. Geological Survey.

But given the sudden burst of interest, he said, it wouldn't be surprising if current evaluations went faster than usual.

"It's happening so fast, I think it would be a matter of time before you could get a full understanding of whether those could compete against the larger deposits," he said.

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