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EDN Europe's Editor Graham Prophet posts a selection of comments and insights prompted by the many items of industry news and rumour that cross the editorial desk or are gathered on his frequent travels to interviews, press conferences and events around Europe - and further afield - and somehow never find their way to the magazine or the web site, recovering some of the information otherwise lost in the noise level...

Monday, January 03, 2011

Rare and rarer

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2011 –and may it be a good year for you – began with the subject of rare earth minerals back in the news. China – which some commentators estimate accounts for 95% of the world’s supply – announced that it will cut exports of rare-earth metals and ores by some 35%.
You may not regularly hear of most of the rare-earth elements, at least, not since your last chemistry class, but they comprise the lanthanide group of the periodic table plus element Y, Yttrium. They tend to get used in small quantities in applications that exploit particular properties of each respective element. Can’t think of any? – how about, as an example, an erbium-doped optical amplifier – it won’t work without that dopant (a typical rare-earth role) so in that sense the material has strategic importance.
Most of the rare-earth minerals (a web search will tell you) aren’t all that rare – they are substantially more abundant than most of the precious metals – but they don’t occur in convenient deposits of concentrated ore. Therefore mining them tends to be environmentally problematic; this has been an issue in the US where existing mines are closed and permits for new ones, contentious. For China, it has been both a benefit – leading to near-monopoly status – and a burden, with issues of illegal and damaging mining. Rare-earths tend to occur together and, with similar chemical properties, are difficult to separate and refine (more environmental impact).
So what is China up to? We can dismiss the idea that it intends to restrict the growth of the electronics and other technology sectors that rely on these elements – even in trace quantities - because its own economy is too heavily dependent on that trade. It’s more likely to be an attempt to move up the component food-chain; something like, “We won’t sell you the raw minerals to make key components – but we will begin to make more of the components locally and you’ll have to buy those instead.” Or perhaps, “You’ll find it hard to buy the metals on the export market – but do look at upsizing your inward investment to build more products within China.”
Are we likely to see supplies of key components whose function depends on rare-earth elements become impossible to source? Unlikely – the regular function of the market will see to that.
What might happen over time, if China sticks to its forecast, is that you might find yourself having to go back into project files and re-qualify components and parts from new suppliers, or from existing suppliers but out of new manufacturing sites.

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