Ann Arbor (Informed Comment) – The green energy revolution so far is dependent on certain raw materials, including silicon for solar panels and lithium for lithium-ion batteries. Another group of such primary materials is rare earth minerals, essential to wind turbines. The largest producer of them is China, but Russia, Vietnam and Brazil also have substantial reserves, though they are not yet big exporters. Actually, 9% of such exports come from the US itself, and Malaysia is another important exporter. The aforementioned four countries, though, have the biggest reserves and so we may expect them to dominate the industry in the future. Geopolitically, the dominance of rare earth metals by China, Russia and Vietnam may be problematic, since the US has poor relations with Russia, and iffy ones with China and Vietnam. Brazil is the only one of the four with which the US has fairly good relations.
China Power notes, ” From 2008 to 2018, China exported nearly 408,000 metric tons of rare earths, which amounted to 42.3 percent of all rare earth exports over the period.”
The US imports 80% of its rare earth minerals from China, and apart from cerium Europe imports almost 100% of its from China.
Rare earth minerals are not rare in the sense of being scarce in the earth’s crust; some of them are quite common. They are rare because they are found in nature entangled with one another and separating them out is a technical challenge. The Chinese have solved that difficulty and have developed an integrated supply chain of rare earth metals, with cheap labor and lax environmental regulation. They are “rare” only in the sense that other countries have rarely made this investment, leaving China dominant.
Now UNI reports, depending on Turkish web sites and the Istanbul Mineral Metals Exporters Association, that Turkish scientists have discovered 694 million tons of rare earth minerals in the Beylikova district of the northeastern Eskishehir province. I once lectured at the university in that province, but had no idea its environs were filled with such a bonanza. China’s Bayan Obo deposit in Inner Mongolia has 40 million tons of rare earth minerals.
This news, even if the amounts are somewhat exaggerated, and even if it will take a while for Turkish entrepreneurs to learn how to mine these material and export them, is excellent for Europe and North America, since Türkiye (formerly called Turkey) is a member of NATO and has strong security ties to the North Atlantic states.
Laura Rodriguez explains, “Neodymium, praseodymium, dysprosium and to some extent terbium, are used in the permanent magnets that turn wind turbine generators. Rising prices have increased the substitution of dysprosium and terbium in neodymium iron boron (NdFeB) magnets to keep down costs as prices have risen in recent years.” She adds, “Neodymium, dysprosium, and praseodymium magnets are also used in electric vehicle (EV) motors, each EV containing around 1-2kg of magnets.”
As all the cars in the world are replaced with electric vehicles in the next decades, the increase in demand for rare earth minerals neodymium, dysprosium and praseodymium is going to skyrocket.
She further explains that the pandemic disrupted Chinese production of polysilicon, the metal used in photovoltaic solar panels. Likewise, as more and more consumers put panels on their roofs, demand is way up. Rapidly growing demand and a bottleneck in supply equal temporarily elevated prices.
The technological developments in green energy are coming so fast and furiously that it may be possible to avoid the us of rare earth metals in magnets for wind turbines and EVs.
If they do continue to prove essential to the wind and EV industries, the earth metals at least appear likely to come from a wider range of countries as exploration and development ramp up. Türkiye could emerge as a key player in the rare earth minerals field, which in turn could be important for North Atlantic countries seeking to transform their energy infrastructure but which are nervous about being dependent on China.