Posts in this article
?? Rare earths essential for high technology
?? China is the largest producer and processor in the world
?? The United States and Europe are striving to achieve greater independence from the People’s Republic
The demand for rare earth elements and other strategic raw materials is increasing worldwide. The main reason for this is the trend towards green technologies, but the same technological advances are also contributing to the growing demand. The fields of application of rare earths are varied. They are required to produce batteries, magnets, catalysts, as well as fertilizers, just to name a few from the fields of application. The name rare earth is a bit misleading, after all, the seventeen chemical elements to which they belong belong to the mineral. Additionally, the raw materials are not as rare as gold, for example, but the difficulty in extracting rare earths is that they occur in the most diverse concentrations and compositions in the Earth’s crust.
Rare Earth Challenge
A complex process is necessary to extract rare earths from the soil. First of all, the ore, which contains precious metals, is extracted and crushed, which uses a lot of energy. The rare earth elements must then be extracted from this concentrate through different chemical processes, whereby a separate chemical solution must be found for each different formulation of the different elements. This makes metal processing more difficult. Another problem that often arises is that rare earths are often found where radioactive elements are also present. In such a situation, the separation of REE is a bigger challenge, which could also have major environmental consequences.
Therefore, it is not easy to respond to the increasing demand for rare earths as the supply rises. As Pablo Gonzalez of The Independent Capital Group explained to Neue Zürcher Zeitung, it takes “from exploration to commercial use of a mine. [ ] Usually seven to ten years. ”In addition to feasibility studies and an investigation of the environmental impact, the economic viability of a new mine in particular is a major challenge. The right timing for developing a new mining project is very important because many new mines are opened at the same operating time, There is an increase in supply, which in turn leads to lower prices of raw materials, thus putting profitability at risk.
The USA and the European Union are striving to achieve more independence
Despite all these risks, the USA and Europe are ready to make themselves more independent of the superpower of China in their supply chains. With good reason, after all, trade disputes and, more recently, the Coronavirus pandemic has brought to light the shortcomings of the over-reliance on the People’s Republic. For this reason, US President Joe Biden signed a decree in late February aimed at preventing supply chains from becoming dependent on China. To this end, the supply chains of various major sectors, including rare earth elements, should be examined over the next 100 days.
The European Union did not remain inactive, but launched the European Raw Materials Alliance in September 2020 “in order to reduce Europe’s dependence on purchasing rare earth elements and magnets from third countries”, as stated in the corresponding press release. As the Federal Ministry of Economics wrote to mark the launch of the Raw Materials Alliance, “the European Union shows the greatest dependence on imports of rare earth elements,” which is why action needs to be taken here.
China is currently the largest producer of rare earths in the world. According to USGS data, 140,000 tons were produced here in 2020. The United States follows in second place with 38,000 tons, which clearly indicates China’s significant progress. But the People’s Republic is not only in the front line in terms of production. When it comes to refining precious metals, the superpower has a near-monopoly position. No other country currently has the technology or knowledge to extract rare earth elements from a concentrated ore. Concretely, this means that nearly every ore that is broken down for mineral extraction ends up in the People’s Republic. One fact that is problematic in light of the increasing importance of rare earths for future technologies, on the other hand, China is well aware of this monopoly position and has already used it as a leverage in the past, as Neue Zürcher Zeitung writes.
All eyes are on Greenland
It is in this context that Donald Trump’s offer to acquire Greenland from Denmark, which was perceived as extremely curious at the time, should be placed in a more understandable light. Australian Greg Barnes claims to have discovered a large deposit of rare earth minerals in South Greenland, which he would like to develop with his company, Tanbreeze. In addition to Tanbreez, another company has placed its sensors in Greenland, which wants to build a rare earth mine on another site, which, however, belongs to the same geological formation – Greenland Minerals. However, final decisions were not made in either case. Greenland Minerals owns a major Chinese shareholder in Shenghe Resources. So the Big Island has a lot of potential and could be a key to more independence from the People’s Republic.
It turns out that the search for precious metals is already in full swing. China has made great progress, but the United States and Europe are now waking up and working to make up for the deficit. Only the future will tell how successful they will be
Martina Köhler / Finanzen.net Editorial Team
Image sources: amriphoto.com/iStock, Celebrian / Shutterstock.com
“Certified tv guru. Reader. Professional writer. Avid introvert. Extreme pop culture buff.”