By Nancy Collisson
On September 7th, 2010, the global high-tech industry imploded when Japanese literally waved – not even whipped – a scolding finger at China for the trawling of a fishing boat in what they claim are their waters. The Chinese responded with the unanticipated horror of cutting off Japan’s then sole supply of rare earths elements or REEs.
That so-called Senkaku Incident involved the Japanese Coast Guard holding the captain of the trawler for more than two weeks, after the vessel he’d been steering through disputed territorial waters of the Senkaku Islands, collided with one of their craft. Granted, the Japanese may have gotten a little too huffy over the incident, but China’s retributive spanking of Japan in its scrawny little resourceless behind set off international alarm. After all, if China ratcheted up to this level of retaliation with powerful Japan, they could easily do the same to other countries and corporations that had long been sucking at its bounteous REE teat.
Barack Obama even held a press conference addressing the situation. He pondered how, without the nearly 100 percent of REEs China had been supplying to the world, at that time, how billions of us would continue getting every high-tech gadget imaginable and essential to our very survival, each of which required REEs for their manufacture. Overnight, the incident gave rise to rapid funding and development of REE mining operations in Africa and Australia, in particular, in order to ensure an additional steady supply in the face of future such incidents.
Now that the REE dust has settled on the Senkaku Incident, it’s prudent to take a look at its economic, social, and scientific fallout.
First of all, a word about the myth the misnomer that ‘REEs’ presents. The only thing rare about the elements found throughout earth, is the number of people – a paucity – willing to let especially their native environments be devastated by processes required to mine and refine REEs – particularly if the areas in which those elements are found also contain things like say, radioactive thorium.
The fact is, the earth’s crust is loaded with the specifically seventeen REEs typically meant by the term; however, because the process of identifying and separating them is notoriously filthy, degradation to the environment, which can be a consequence of this process, generates an understandably powerful NIMBY (not in my backyard) effect.
But as the greedy element in the human character would have it, concerns about environmental costs tend to wane when certain investors or government representatives understand the financial profits that can be gleaned by sacrificing all that nature entails for dumping tailings. These are the types of folks who more fully appreciate than some others that REEs presently serve a $7-trillion annual demand for high-tech gadgetry. Magnets, which are made from REEs, now comprise their own industry, one that is anticipated to generate $96 billion in annual sales by 2020.
Rare earths elements are grouped into two divisions: lights and heavies.The lights include lanthanum, cerium, praseodymium, samarium, and neodymium, and the heavies include europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, lutetium, ytterbium, and yttrium.
Precise combinations of these tiny elements contribute to forces that both generate the vibration mechanism in cell phones, while a half ton of the right mix enables meticulous manueverability in supersonic jets.
Magnetic properties extracted from REEs provide the greatest economic benefit in this industry; they are essential components of motors that drive wind turbines, magnetic-levitation transportation, and some electric vehicles. REEs-based magnets are also critical components in the seeming magic of miniaturized power density required to generate certain light, highly efficient car batteries, wi-fi routers, laptops, tablets, and refined weaponry.
Thus, to continuously meet the endless demand of millions clamoring for cleaner energy production and quicker and slicker high-tech devices, China has sacrificed for them the Mongolian city of Baotou and its lake, air, fresh-water aquifer, and health of its regional (and beyond) residents.
The 11-square kilometer (depth unmentioned) Lake Baoutou presently holds 180 million tons of toxic REEs slurry and 2.1 million cubic metres of acidic waste water. To help put that mess into perspective, the similarly environmentally offensive Alberta Tar Sands shale oil fracking operation covers 142,000 square kilometers of toxic slurry.
Knowing that despite the ungodly amount of money China makes for their willingness to abuse miles of land further than the eye can see so that nearly everyone on earth can, for one, enjoy the miracle of connecting to everyone in the world and accessing myriad information by holding a gleaming smart phone, makes it easier to understand China’s strong sense of righteous indignation when one of their citizens get in a political pickle outside of home.
When China cut off Japan from its REEs because the Japanese coast guard detained the trawler captain, the Japanese did not bend over, bow or beg for forgiveness to get them back. Instead, having been prepared for such a grim possibility, they simply tapped into their stockpile of REEs and found ways of re-using cerium, for example, which is used as a polish to give the screen of your smart phone its luster.
Though Japan remained composed, the Senkaku Incident led government and corporate leaders throughout the world to take moral stock of their fairly idiotic presumptuous dependence on and vulnerability to China by relying solely on these resources that have become essential to life. The critical value of China’s REEs to maintaining growth of green and high-tech sectors was especially alarming, awakening an immediate search for new REEs suppliers and sites. It was to become a frenzied activity that unsurprisingly led the observant opportunistic to take advantage of their frantic despair.
Milking the Rare Scare – Understanding the Aftermath of the Sengaku Incident
America’s Mountain Pass REE mine, owned by Molycorp Minerals, had shut down in 2002 due to environmental concerns as well as lack of need due to China’s ready supply of REEs. However, due to the Senkaku Incident, Molycorp reps recognized their opportunity. They managed an audience before the US Congress, to whom they built fears of Chinese reliance, claiming that at any moment China could pull the REEs out on the entire US defense industry. And on September 23rd, 2010 – just one day after China blocked Japan from getting any REEs – the House Committee on Science and Technology reviewed a bill calling for subsidizing the reopening of the Mountain Pass REE mine.
That November, Molycorp ran an IPO announcing this government support and its own plans to invest $500 million in restoring the mine. By December, Molycorp announced that it had secured all federal and state environmental permits, and that after some re-construction, mining would commence by the end of 2012.
The mine wasn’t in full production until early 2015, but it proved a failure and was outed as a scam. Molycorp filed for bankruptcy by that June, and by August it was reported that the mines was to be shutdown.
The DOD REACTs
Also during 2012, the US Department of Defense’s Advanced Research Projects Agency dug in on the money-making opportunity. They secured federal funding to offer a $31.6 million grant they called ‘REACT’ – Rare Earth Alternatives in Critical Technologies for any company that could reduce or completely eliminate dependence on China’s REEs. Unsurprisingly, the best they came up with was their very own Northwestern Pacific Labs development of a magnet composed of manganese and resin, that they claimed had twice the strength of those made from China’s REEs.
Also at about that time, a group of Canadians decided it might be a good time to get serious about finding funding for by firing up an REE mine. They honed in on an environmentally friendly sounding heavies-rich site located between two nature preserves in Namibia. The group called its organization Namibia Rare Earths (NRE), got listed on the Toronto Stock Exchange, and funded their plan dubbed the Lofda Rare Earths Project by initiating an IPO in April of 2011.
Diversifying its promises of REEs, NRE gained further investment, but has not yet begun operations, expecting to receive full government approval before the end of January, 2018.
Recognizing the opportunity as well, Australia’s Lynas Corp. jumped into the REE fray.
By August, 2012, Lynas put their western Australia Mt. Weld mine into full operation, but because Australia bans the refinery of rare earths on its soil, Lynas had exported this toxic operation to its Lynas Advanced Materials Plant (LAMP) facility set up in the low-lying Malaysian swampland backwater of Kuantan.
To secure Malaysia’s approval of this operation, Lynas provided assurances of stability in the form of Japan’s post-Senkaku declaration that by mid-2013, 50 percent of its REE imports would come from outside of China. Lynas was also able to show that the Japanese Sojitz Corporation had given them a $325-million loan (half of which was provided by the Japanese government) and purchased $25 million in its stock shares.
For two years, Lynas whacked China in its REEs by filling 15-to-20 percent of global demand, but a lag in global demand paired with the fact that China’s 86-percent market share gave it product pricing control, Lynas started to struggle and hasn’t recovered.
On top of that, Lynas began being attacked by citizens for its lack of environmental controls in the press, in the courts, and at its front doors. Environmental organization Save Malaysia, Stop Lynas (SMSL) has been crying foul about Malaysian government failure to demand Lynas meet several basic environmental protection steps required by international agencies that monitor radiation.
To placate SMSL, the Malaysian government granted Lynas temporary operating licenses (TOLs) rather than permanent ones. These TOLs have always allowed the company to continue with full operations, however.
The government claims that Lynas’ conceptual plans for recyling waste into gypsum or road aggregate has met with approval from the Atomic Energy Licenseing Board (AELB) – neither of which has been done. The government also claims that Lynas promises to comply with the International Atomic Energy Agency (IAEA) recommendations that it create a permanent disposal facility for water-leeching purification (WLP) waste – it never has.
According to statistics compiled by SMSL, by the end of June, 2016, LAMP had produced a total of 28,000 tons of REEs, while leaving behind solid waste of close to 380-million tons. By 2016, this toxic waste included 80,000 tons of radioactive WLP, 224,000 tons of neutralization underflow (NUF), and 74,000 tons of flue-gas desulfurization (FGD) by-product.
Concerns about Lynas ability to fund clean-up operations or exploit creative channels in which to make practical use of these by-products are heightened as Lynas admits it has difficulty funding its daily operations.
In 2016, the company announced it was having difficulty meeting its debt obligation to Soljitz and the Japanese government. According to Ernst & Young, Lynas total losses at that time had reached $880 million, while its books showed a debt of $508 million – more than double its equity of $237.5 million.
Meanwhile, Lynas keeps shoveling the slurry, adding it to the already 1.25 million tons in LAMP’s Kuantan retention ponds as the company continues operating.
Fishing for the best REE-cycling Solutions
Although REEs have become essential for many innovative products and applications, extracting them is an expensive, toxic process that most societies are unwilling or thankfully unable to implement. Vast amounts of environmentally damaging chemicals used in the refining process including hydrofluoric acid and mercury, can change water and soil chemistry. Refining just one ton of REEs results in 75 cubic meters of acidic waste water and one ton of radioactive waste. To put this waste to good use, chemists try to extract from this mess even more REEs.
Japan has led a more practical means of mitigating environmental impact caused by REE extraction, by manufacturing items that incorporate REEs in such a way that the magnetized elements can be manually removed – rather than shredded out – for recycling. However, each process requires high levels of energy use, consumption of large amounts of acidic chemicals, and generates toxic sludge.
Current low price levels for REEs make their recycling not economically viable. Studies have shown that if prices for recycled material were at least 10-to-50 times higher, then industrial processes to extract them would develop.
In Japan’s quest for clean and inexpensive REE recycling solutions, researchers at the University of Tokyo have been investigating the possibility of using bacteria to recover REEs. Upon discovering that the phosphate site on bacterial cell surfaces served as a crucial binding site of REEs, they wondered whether DNA could be used to extract REEs in solution, since DNA has phosphate as part of its backbone.
They discovered that milt, or salmon sperm, could serve this function because milt is not water soluble and clings to the magnetic REE material.
Scientists found that by adding powdered milt to a solution containing the main REEs used in neodymium magnets, the metals bound strongly to the phosphate. The REEs were then separated from the material in an acid bath and by spinning the material in a centrifuge. Although the process requires use of strong acids, done in massive bulk, it is believed that this technique could become economical because thousands of tons of milt is discarded each year by the Japanese fishing industry.
That one’s humble pursuit of fish set off a global alarm that resulted in a corybantic search for REEs, that concluded with another’s discovery of a fish that could mitigate dependence on REEs, can be easily noted as a remarkable irony in a very dirty story.
But it’s an irony that will likely be lost on both tech lovers who clamor for shinier and more superior-functioning gadgetry, and on those who call themselves environmental activists who demand, among other things, hyper-loop transport and, of course, more non-fossil-fuel based energy, because the thing is, they don’t even know the story.