Writing in The Diplomat back in November 2010, Saurav Jha posed the question of whether China had overplayed its rare earth hand.
The question was prompted by a series of events triggered by the Japanese interception of a Chinese fishing vessel by two Japan Coast Guard ships and the subsequent political row as China demanded the return of the captain of the vessel who was detained after the Chinese boat rammed one of the Japanese ships.
As part of its diplomatic pressure on Tokyo, Beijing appeared to halt exports of so-called rare earth metals – a resource vital to many of Japan’s high-tech industries – prompting alarm among some of the many other countries that rely on China for the actually not-so-rare metals. At the time, China claimed that it hadn’t directed exports to be halted, suggesting that it was a spontaneous decision by all its exporters. Few were convinced, and the Chinese move was followed by a round of deals among other nations and much media speculation about a possible Chinese stranglehold on other nations’ economies and even national security.
To be fair to China, there had already been warnings over the environmental toll that illegal mining of rare earth metals was taking, and the government warned that it was tightening up on such activity, adding that it was this crackdown, and not exploitation of its virtual monopoly, that was driving its cuts in export quotas.
Fast forward more than 18 months, and the New York Times notes that there has been a “plunge in world prices for rare earths in the past year as a speculative mania has subsided.” But will an announcement by China this week change things up again?
In a policy paper, Chinese officials warned a decline in its rare earth reserves in some mining areas was “accelerating.”
“The Chinese government exercises strict control over the total volume of rare earth smelting and separation, and will not approve any new rare earth smelting and separation projects except for those state-sanctioned projects of merger and reorganization and for distribution optimum. Existing rare earth smelting and separation projects are prohibited from expanding their scale of production,” the paper noted.
“In view of the needs of protecting the environment and resources and developing in a sustainable way, and after giving overall considerations to the domestic and international markets, the carrying capacity of resources and environment, as well as domestic production conditions, China strictly controls the total volumes of rare earth mining and production, and takes restrictive measures on the mining, production, consumption and export of rare earth products simultaneously,” it also said.
So how serious is the environmental threat facing China as a result of rare earth mining? I asked Nicholas Leadbeater, a rare earth specialist at the University of Connecticut, for his view on the dangers.
“I would say that the issue with rare earth mining is that the rare earth metals are in fact not all that rare, but they are found in small concentrations in ore and often found alongside things like uranium. Extraction of the rare earths from the ore is energy intensive and requires high temperatures as well as often needing significant quantities of hazardous chemicals like concentrated sulfuric acid,” he told me. “The extraction process results in a lot of waste, some of it radioactive due to the uranium and other radioactive elements in the ore alongside the rare earths. In addition to this are the other environmental and health concerns of mining large areas for ore.”
So, with this in mind, what does the future hold? According to Leadbeater, it’s “becoming increasingly obvious that, while rare earths are used in many ‘environmentally friendly’ applications such as hybrid cars, the supply of the key rare earths isn’t sustainable on a long term basis.”
This means, he says, that industry is looking for alternatives to the rare earth components, “be this a complete redesign of their technology or else a way to make components more efficient,” and so reducing the amount of rare earth required.