China's grip tightens on 'green' metals
By Emilio Godoy
MEXICO CITY - The rare-earth metal neodymium, used in electric car motors and
wind turbines, is at the epicenter of the race between
China's grip tightens on 'green' metals
By Emilio Godoy
MEXICO CITY - The rare-earth metal neodymium, used in electric car motors and
wind turbines, is at the epicenter of the race between wealthy and emerging
nations to create green technologies, while poorer countries appear to be
relegated to spectator status.
Neodymium is a lanthanoid, at position 60 on the periodic table of elements for
the number of atoms in a single molecule. Its production and wide range of uses
reflect the competition over raw materials in the area of green technologies.
Jose Luis Giordano, associate professor of engineering at the University of
Talca in Chile, noted in an interview that there is a
battle between the United States, China and Japan over neodymium, samarium and
praseodymium, over ceramic superconductors, and for alternatives to these
materials, still in the experimental stages.
These elements belong to Group 15 of rare metals whose unique properties, such
as their great magnetic capacity and resistance to high temperatures, make them
indispensable for a wide range of new technologies that the world needs
urgently to confront global problems like climate change.
Magnets made from neodymium help generate energy in electric vehicles and the
rotation of wind turbines.
China and the United States are the world's leading producers of neodymium, but
the Asian giant is also a powerhouse in the manufacturing of green
In the early 1990s, rare materials that China produced at low cost, like
neodymium, became abundant on the mining market, and prices fell from US$11,700
per tonne in 1992 to $7,430 in 1996, or from about $12 to $7.4 per kilo.
Because of China's influence, the market volume jumped to 125,000 tonnes
annually from 40,000 tonnes in a few years.
In 2006, nearly the entire world production of these minerals - 137,000 tonnes
- came from China. In recent years, China has reduced its exports in order to
feed its own industries. That trend pushed up international neodymium prices to
$60 per kilo in 2007.
Global demand is expected to surpass 200,000 tonnes per year in 2014, with
China holding most of the supply.
Independent consultant Jack Lifton, who specializes in supplies of non-ferrous
strategic metals, said a US-China trade dispute over neodymium production could
be just over the horizon.
In a presentation to US lawmakers on January 29, Mark Smith, director of
Molycorp Minerals, acknowledged that limited manufacturing capacity had created
a gap and that although the US has the knowledge it has lost the necessary
Molycorp owns the Mountain Pass mine in California, the richest in neodymium
The history of business development around neodymium shows how China has
imposed its conditions. In 1982, the US-based General Motors, Japan's Sumitomo
Special Metals and the Chinese Academy of Sciences invented a magnet made from
neodymium, boron and iron. In 1986 they put it on the market through a new
division of GM known as Magnequench.
The Chinese companies China National Nonferrous Metals, San Huan and Sextant
MQI Equity Holdings bought Magnequench in September 1995.
Neo Material Technologies then arose from the 1997 merger of Canada's AMR with
Magnequench. The new company is based in Canada, with production centers in
China and Thailand.
In May, two Chinese companies invested in two Australian mining companies,
Lynas and Arafura (acquiring half plus one of the shares of the former and 25%
of the latter) that are beginning operations to extract and, in the case of
Lynas refine, large volumes of rare metals.
Lifton believes that China will not allow Western nations to purchase neodymium
for future delivery outside of their territories and not even for sales inside
China if intended for export.
This means the Asian nation could harden its strategy to acquire companies
abroad and that the industrial powers and developing countries would have to
seek other suppliers of green technologies.
Smith predicted that if the US does not renew its capacities, in the best case
it will become a source of raw materials for China's production, and not a
manufacturer itself of advanced clean technologies.
So far, there are no viable alternatives to the rare metals. Substitution of
neodymium is possible in wind turbines. The rare metal reduces the weight of
the magnet mechanism, which will be heavier using other metals. Heavier
turbines need stronger foundations, which means fortified concrete and higher
Neodymium magnets have a magnetic force nine times stronger than conventional
The most similar alternatives, but even more costly, are made from samarium a