Rare earths

From cerium to yttrium, the 17 rare earth elements (REEs) are little known to the general population, but their magnetic and optical properties make them essential  to modern technologies including wind turbines, medical devices, drones, electric vehicles (EVs) and electronics displays.

“In the 21st century you’ve got all these transformative technologies and you need to have the critical metals to make it happen. You hear a lot about the importance of lithium for lithium-ion batteries, and rare earths are in the same category,” says Patrick Ryan, CEO of Ucore Rare Metals, a Canadian mining and technology company that specialises in critical metals.Despite the name, the problem is not their rarity – rare earths are as common in the Earth’s crust as tin, lead and copper, and exist in natural deposits globally.  But they are unevenly distributed and hard to extract – leading to two major challenges, one environmental and one geopolitical. Both are set to be exacerbated as demand for REEs grows.“Imagine that you can’t access the critical metals. There will be jobs lost, and climate change targets not met”, argues Ryan. “Based on current trends, rare earths oxides need to grow five-fold by the end of the decade, and we potentially have a problem.”The first challenge centres around the mining process. Rare earths tend to occur together in the same mineral deposits; one of the main commercial sources is Bastnesite, comprising the oxides of multiple REEs, which needs to be processed to recover the individual elements.Such processing can at times produce toxic and radioactive materials that leak into groundwater, sparking health and safety concerns. “The REEs themselves are not particularly toxic, it’s just that they ride along with other things that are, like heavy metals and radioactive materials,” explains Professor James Tour, a professor of Materials Science and Nanoengineering at Rice University in Houston, Texas.Extraction of just one tonne of REEs could produce 2000 tonnes of toxic waste, although this is atypical.¹

 Mining has led to devastation of soil and water in regions of China, which has been busily extracting REEs since the early 1990s.² 

These commodities are paradoxical: they are both essential to low carbon technologies but getting them out of the ground further despoils the environment.The second big challenge centres around the concentration of deposits – and mines – in particular countries. China accounts for 60 per cent of the mining and 90 per cent of the processing, with only four plants operating outside of the country.³ 

This presents a serious geoeconomics risk.Mark McDonald, vice president of business development at Ucore, also foresees challenging times ahead for the industry without more proactive steps. “There’s no doubt that there is going to be a supply shortage because of the forecast manufacturing numbers and the present capacity to mine and process rare earths.”

More investment, less waste

So what are the solutions? Reducing reliance on rare earth metals is one option. For example, Toyota’s Prius model was the most rare earth-intensive consumer product ever made, with each of vehicle containing about 25 lbs of REEs. However, geopolitical conflict between China and Japan, combined with the environmentally harmful impact of extraction, led Toyota to design motors with less reliance on REEs.⁴

Another avenue is making the most of the REEs which have already been mined and processed. Professor Tour has, along with his lab at Rice University, developed a process to recover the elements from electronic waste, coal fly ash and bauxite residue without compromising their all-important electronic and magnetic properties. “It’s very simple”, he explains. “You just put the waste material between two electrodes, put a high voltage and high current through it for less than a second and you’re done. There are no solvents or water involved in the process and it can be scaled.”In another approach, the team used a very dilute acid stream, making it less generating of secondary waste.By extracting REEs from waste products, Tour describes the method as way to upcycle rather than recycle useful parts of discarded items. “If you look at the economics, this costs much less than mining. You are not digging big holes in the ground. You are not shipping long distances and you are not generating all these secondary wastes of this highly toxic base. Mining is an expensive and high greenhouse gas emitting system, and this process avoids it”.

Even the humble potato could contribute to environmentally friendly REE extraction. One team at the Idaho National Laboratory developed an innovative way to recycle RREs from high-tech and industrial devices, using bacterium. Through bioleaching – using microorganisms to transform elements – the team fed potato wastewater to a bacterium which produces acids that separate REEs from their surrounding material.  By using potato wastewater, the team was able to reduce cost of extraction by 17 per cent than when using glucose.Moreover, researchers are exploring the use of emerging technologies to improve REE production and provenance. Ucore, for example, has developed a method to separate REEs which, the company has demonstrated is at least three times as efficient as conventional approaches, suggesting that a production plant can reduce its environmental footprint by two thirds. EIT RawMaterials, an EU-funded project, is developing the Circular System for Assessing Rare Earth Sustainability, or CSyARES, which uses blockchain to track the full life-cycle of REEs used in EVs and ensures that they are not linked to toxic pollution.  Scientists from Ames Laboratory at Iowa State University and Texas A&M University have started using artificial intelligence (AI) and machine learning (ML) to transform the way we discover and predict the properties of new REE compounds, increasing efficiency and accuracy beyond what is possible by humans alone in the lab.Governments are now also trying to ramp up their domestic production and supply chain resilience. Around 2018, the White House administration signed agreements with Australia and Canada to secure REE supply. 

The US government has announced a number of different programmes that are available for funding, with several grants and awards recently announced including a USD35 million award to MP Materials in Mountain Pass, California, to separate and process heavy REEs as part of an effort to establish an end-to-end domestic supply chain of permanent magnets.  Another initiative, led by the Department of Energy, will invest USD140 million in a demonstration project to recover REEs from coal ash and other waste surrounding mines, reducing the need for new mining.The Australian government is investing in domestic businesses to support integration into local and international value chains. An AUD14.8 million grant in 2021 to Lynas Rare Earths met half the cost of implementing a new REE refining process in Western Australia.  The government also formed a new agency, the Critical Minerals Facilitation Office, in 2020 to support domestic industry and announced a package of supports in its 2022-2023 budget including a AUD200 million accelerator grant program for critical minerals and AUD50 million to support R&D.In Canada, the government of Québec is investing CAD90 million in the ‘new economy’ linked to critical and strategic minerals.  The European Commission has published critical material forecasts to encourage member states to take bolder action in securing the commodities needed to build 21st century industries like renewable energy and robotics. 

Projects have now been launched outside China with some 20 under development in Australia, Canada, and the US.In the end, Ryan says, government support measures are ‘priming the pump’, helping the private sector and academic institutions to find new ways to access the commodities of the future in a cost-effective and environmentally friendly way. This will be crucial for ensuring secure, sustainable access to the materials that will enable the technologies of today and the future.

Insights for investors

• Rare earth elements market forecast to deliver 10 per cent compound annual growth rate (CAGR), to reach USD5.5 billion by 2028, according to Fortune Business Insight.
• US, UK, European Union, Australia and Japan among major economies actively investing in new rare earth mines and processing facilities to reduce dependence on China.
• Production of rare earth metals expected to more than double by 2035, according to Adamas Intelligence. This still won't be enough to keep up with projected demand growth of 8-10 per cent a year.