Neodymium Research Brief

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This paper, “Neodymium No Deal (N.D.) explores this great new global innovation in alternative energy technology and the challenges that this sector faces that will undermine the credibility of this commodity in the “clean” and “green” tech energy
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Neodymium Research Brief

  1. 1. 2011 Tec 275 Power Technology Monica Leslie [NEODYMIUM N.D.] [This paper, “Neodymium No Deal (N.D.) explores this great new global innovation in alternative energy technology and the challenges that this sector faces that will undermine the credibility of this commodity in the “clean” and “green” tech energy field.]
  2. 2. Neodymium 201 1 Background Neodymium is a rare earth metal that is commonly used in the development of alternative energy technology. The mineral is commonly used as an alloy made up of Neodymium-Iron-Boron alloy (Nd2Fe14B) (Parry). Neodymium, like many specialty earth metal alloys is necessary for the lightweight permanent magnets that are used in Prius motors and other hybrid forms of transportation, “smart” electronic devices like cell phones and the mass production of electricity produced by maglev wind turbine generators (Pasternack). The structure of the atoms within the magnet, which forms a tetragonal crystal, gives this alloy its magnetic strength (“eHow”). The alignment of this mineral’s molecular structure creates a very durable magnetic field that makes neodymium magnets the most powerful electro magnets in the world. Therefore, the magnetic properties of neodymium make it one of the most desirable resources used in renewable energy technologies and other technological applications. These applications include, but are not limited to their use in hi-fi speakers; air conditioning units, washing machines, hard drives; lasers and even technologies like smart bombs ("Hitachi"). Despite the connotation associated with the name, rare earth metals aren't that "rare" in abundance. The name comes from their seeming scarcity when first discovered in the late 18th century in an ore found near Ytterby, Sweden (Biello). According to a study performed by the U.S. Geological Survey, China holds the largest share of worldwide reserves of rare earth metals including neodymium; about 36 percent (Robison, and Ratnam). The U.S. is second in its ability to supply these minerals, holding 13 percent of the reserves. Earth metals like neodymium are often found interspersed throughout ores that make mining the material difficult and expensive to extract. This makes these minerals challenging to find in profitable concentrations because these rare earth ores or (REOs) are often laced with radioactive isotopes including thorium, radium and in some cases uranium (Biello). Growing Concerns The process of neodymium extraction is highly complex ("Neodymium"). Due to the complexity of the process, neodymium is never isolated on a small scale laboratory basis. The process involves intensively boiling the ores repeatedly in sodium hydroxide, sulphuric and hydrochloric acids in order to extract the lanthanides and metals out of the ores in their salt form. And in some cases, such as in cities like Baotou, China where rare earth mining has dominated the landscape, ores are even extracted by pumping acid into the ground before undergoing the chemical extraction process. This has created some concern that as the role of permanent magnets in the renewable energy sector continues to increase in importance and magnitude, that the deadly and sinister side of the massively profitable rare-earths industry raises serious questions over whether creating a reliance 2
  3. 3. Neodymium 201 1 upon this resource as a critical building block of future technology could, in the long run prove to be economically and environmentally detrimental (Hatch). Environmental Impact “The fact that the wind-turbine industry relies on neodymium, which even in legal factories has a catastrophic environmental impact, is an irony,” says Jamie Choi, an expert on toxics for Greenpeace in China (Parry, and Douglas ). ‘It is a real dilemma for environmentalists who want to see the growth of the industry,’ she says. ‘But we have the responsibility to recognise the environmental destruction that is being caused while making these wind turbines.’ In an article written by Simon Parry and Ed Douglas, “The True Cost of Britain’s Green Obsession: Pollution on A Disastrous Scale,” the authors document the wide scale destruction made to local farmland and waterways put into jeopardy due to the chemical processing and lack of oversight over neodymium factory production and extraction from Chinese mines(Parry, and Douglas ). In an excerpt of the piece published by the Global Warming Policy Foundation, the authors note: Hidden out of sight behind smoke-shrouded factory complexes in the city of Baotou, and patrolled by platoons of security guards, lies a five-mile wide ‘tailing’ lake. It has killed farmland for miles around, made thousands of people ill and put one of China’s key waterways in jeopardy. This vast, hissing cauldron of chemicals is the dumping ground for seven million tons a year of mined rare earth after it has been doused in acid and chemicals and processed through red-hot furnaces to extract its components. The waste from this highly toxic process ends up being pumped into the lake looming over Dalahai. The state-owned Baogang Group, which operates most of the factories in Baotou, claims it invests tens of millions of pounds a year in environmental protection and processes the waste before it is discharged. According to Du Youlu of Baogang’s safety and environmental protection department, seven million tons of waste a year was discharged into the lake, which is already 100ft high and growing by three feet each year (Parry, and Douglas). Because of environmental concerns like these, the extraction and processing of neodymium, in addition to the end-of-life-cycle treatment of this resource undermines the credibility of this critical component of alternative energy to provide a safe, clean “green technology”. The vast amounts of highly toxic acids and heavy metals that leak into surface and ground water which villagers rely on for potable water and highly concentrated chemical emissions released into the atmosphere make this commodity, which is believed to be the cleanest and safest way to protect the environment and restore communities, an inevitable catalyst for the “massive environmental degradation and the destruction of communities”. (Parry) In the United States, the Molycorp mine at Mountain Pass faced similar challenges regarding the mine’s growing ecological costs (Margonelli). After hundreds of thousands of gallons of 3
  4. 4. Neodymium 201 1 radioactive waste washed over into Ivanpah Dry Lake in 1998, production and processing at the mine was brought to a screeching halt. After Mark Smith, took over as the CEO in 2000, Smith worked with 18 California regulatory agencies to resolve the compliance issues (Margonelli). Smith wanted to reopen the mine as an environmentally friendly rare earth supplier in order to appeal to investors that have become increasingly conscious of environmental concerns in hopes that he can competitively enter the market with these new environmental safeguards. In an interview given by Lisa Margonelli written in an article for the Atlantic Magazine Smith shares: “We want to be environmentally superior, not just compliant. We want to be sustainable and be here for a long time,” he says expansively before talking about opening a permanent-magnet factory employing 900 nearby (Margonelli ). But Margonelli is sure to state in her article “Clean Energy’s Dirty Little Secret” that Smith’s effort to turn Mountain Pass into an environmentally friendly producer comes with costs his Chinese competitors don’t have to pay: for starters, $2.4 million a year on environmental monitoring and compliance. She poses the question whether consumers would be willing to pay more for “local minerals and homegrown magnets?” This question also raises additional concerns. Economic Concerns China currently produces almost all of the raw metals extracted from rare earths. In 2006, nearly all of the world’s roughly 137,000-ton supply of rare-earth oxides came from China (Margonelli). Over the past few years, China has cut exports sending the price of neodymium oxide to a high of $60 a kilo in 2007. Even though many Americans believe that they currently dominate the most significant global markets in many large scale sectors, “China’s market for power equipment dwarfs that of the United States, even though the American market is more mature.” China’s biggest advantage may be that its domestic demand for electricity is rising 15 percent a year (Bradsher). According to the International Energy Agency, China must produce almost nine times the electricity generation capacity as the United States in order to meet its consumer demand over the next ten years. Surprisingly, there is no significant neodymium production surplus in the United States. In the United States, many energy companies have decided to forgo the purchase of renewable energy equipment because the infrastructure and support systems are not in place to make the 4
  5. 5. Neodymium 201 1 retrofits economically viable and so they must to operate fossil-fuel-fired power plants that have already been built and paid for. However in China, where much of the commercial scale alternative energy technology is produced, access to renewable power equipment is easily accessible and competitively priced because the resources are locally available and cheaper to produce at a larger scale. It has been estimated that to build the latest and most efficient one megawatt capacity wind turbine powered electric generator requires one ton of the rare earth metal neodymium for use in a permanent magnet made from the alloy neodymium-iron-boron. The total amount of neodymium produced annually in the USA is at most 600 tons, and all of it is used already to build nd-fe-b magnets for various applications. The current US installed capacity for electricity generation is 1,000 gigawatts (a gigawatt is 1000 megawatts), of which 0.6%, 6 gigawatts, is generated from wind turbines. The global annual production of neodymium, essentially all of which is mined in China, is today at an all time historical high of 26,500 metric tons (Parry). Consequently China does not have any known plans to divert any of its neodymium production to foreign manufacturers for the production of large scale permanent magnets for American wind turbine electricity generation (Lifton). This leads many Western investors to believe that it would not be economically viable for the United States to invest in wind technology and neodymium earth ore production. The amount of neodymium that would be necessary to make this effort worthwhile could not be obtained. The rate of production would have to be over the total projected demand for 2014 which is already estimated to be 38,000 metric tons, 50% greater than today's production and demand (Humphries). We would need to double the short order production of neodymium in order to replace the “outmoded, outdated, and therefore very inefficient and expensive iron based magnet technology” that the United States is currently using in wind turbine technology (Margonelli and Lifton). 5
  6. 6. Neodymium 201 1 In his analysis of the publication Top wind-turbine firms: U.S parts makers needed, Jack Lifton Co-founder and Director, of the firm Technology Metals Research, LLC critiques the authors of the publication in his own article appropriately named “Braking Wind: Where's the Neodymium Going To Come from (Lifton)?” In this article Lifton notes that the only possible (non Chinese) sources for neodymium production could occur through the following corporations: Lynas Corp (Mt. Weld, Australia), 2. Arafura, Ltd (Nolan's Bore, Australia) 3. Molycorp (Mountain Pass, california) 4. Great Western Minerals Group, Ltd. (Hoidas Lake, saskatchewan, Canada), 5. Avalon Rare Metals (Thor Lake, Northwest Territories, Canada), or 6. Thorium Energy, inc. (Lemhi Pass, Idaho). Lifton belives that this poses a problem because presently, not a single one of the mining ventures listed above has yet produced a single gram of commercial rare earth metal. While several claim to be ready to begin or continue their operations, many factors have recently brought the physical operations of all of the above companies to a halt, so that at the present time there is no foreseeable alternative to Chinese sourcing for rare earth metals at any date certain in the near term (Lifton). While two rare-earth projects are scheduled to ramp up production by the end of 2012 -- one owned by Molycorp Inc. in California and another by Lynas Corp. in Australia -- the GAO says it may take 15 years to rebuild a U.S. manufacturing supply chain (Bloomberg). A Threat to National Security? In an article written by Peter Robison and Gopal Ratnam and published in the Bloomberg report in September of 2010, the domination of the neodymium ore market by Chinese rare earths manufacturers doesn’t just constitute a challenge just because of the supply chain issue but also because of the threat that this poses to national security (Robison, and Ratnam). The article, “Pentagon Loses Control of Bombs to China Metal Monopoly,” documents how the United States’ underestimation of the Chinese domination of the rare earths market has created the framework for a future resource crises in which China will be able to use leverage over this coveted mineral as a potential weapon against the United States. This is particularly important because of the usage of neodymium magnets in the production of technological components which include; control systems which “direct the fins of bombs dropped by U.S. Air Force jets in Afghanistan, silence the whoosh of Boeing Co. helicopter blades, direct Raytheon Co. missiles and target guns in General Dynamics Corp. tanks. The article quotes Peter Leitner, a senior strategic trade adviser at the Defense Department from 1986 to 2007 stating that in regards to the monitoring of this critical resource that “The Pentagon has been incredibly negligent.” 6
  7. 7. Neodymium 201 1 This worries analysts like Irving Mintzer, a senior adviser to the Potomac Energy Fund. “If we don’t think this through, we could be trading a troubling dependence on Middle Eastern oil for a troubling dependence on Chinese neodymium (Margonelli).” "There is no single military system in use by the Pentagon that does not contain rare earths," Alex King, director of the U.S. Department of Energy's (DoE) Ames Laboratory in Iowa notes, “ranging from Abrams tanks to radar systems (Biello).” In a recent report submitted to Congress by the Federation of American Scientists compiled by Marc Humphries, a Specialist in Energy Policy advised Congress that it would be in the best interest of the United States Congress to establish a government-run non-defense economic stockpile and/or private-sector stockpiles (Humphries). Humphries justification for this is that securing a stockpile can help control the prices and access to these rare earth elements so that a supply of this commodity can be available for use for “green initiatives” and defense applications” during times of what he describes as normal supply bottlenecks. This report was submitted to Congress as recently as September of 2011. Running Out of Solutions? Unfortunately rare earth recovery can be just as difficult and expensive because the alloys are mixed into chemical compounds for use during the production stage ("Deutsche Welle"). Also, since REEs are available raw on the world market, there leaves very little economic incentive recycle despite the urgent plea to do so for the sake of national security. "The complex chemistry involved doesn't just make it difficult to make new production plants, it makes it difficult to make new recycling plants," says Doris Schüler of the Institute for Applied Ecology in Freiburg ("Deutsche Welle" ). Not only does rare earth recycling require a big capital investment, Schüler says, but Europeans also lack the necessary know-how. In her interview published in Deutsche Welle Schüler states that she believes it would take at least five or 10 years before all the technical, economic and legal conditions were in place to support a successful recycling system. But industry might not be able to wait that long, since the world's supplies of the material are dwindling. According to a U.N panel on metals that is chaired by experts from India, Germany, and Yale University, “Boosting end-of-life recycling rates not only offers a path to enhancing those supplies and keeping metal prices down, but can also generate new kinds of employment while ensuring the longevity of the mines and the stocks found in nature,” Achim Steiner, executive director of the U.N. Environment Program, said in a statement. The U.S. Geological Survey, Mineral Commodity Summaries, published in January 2011 reports that the United States imported 4700 metric tons of mixed rare earth ores as commodities in 2010 ("U.S. Geological Survey"). This figure does not take into account the amount of rare 7
  8. 8. Neodymium 201 1 earth ores that could easily be recovered from the millions of imported Chinese manufactured goods that Americans purchase cheaply, use for a short period of time and eventually throw away. Japan Rises to Meet the Need for New Innovation Meanwhile Japan, who wishes to become the world leader in recycled rare earth metals has been amping up its research and development to allow its recovery sector to become its leading supplier ("Alt Energy Stocks"). The government of Japan has been instrumental in getting the recycling of REs underway and has both instituted subsidies and facilitated inter-industry cooperation. Although Japan is poor in natural resources, the National Institute for Materials Science reports that used electronics in Japan hold an estimated 300,000 tons of rare earths (Tabuchi). Though the amount in reserves won’t come close to the amount of rare earth alloys China produces – a nation which mines 93 percent of the world’s rare earth minerals; analysts speculate that tapping these urban mines could help reduce Japan’s dependence on its neighbor. Currently the Japanese electronics producer Hitachi is the leader in rare earth recycling and recovery due to the development of their dry electrostatic recovery system which eliminates the need for worker exposure to harsh chemical acids ("Physorg.com"). Hitachi claims that using this method the separation and collection of rare earth magnets requires approximately five minutes per worker per unit and that this method has increased production efficiency so that the harvested material can be reprocessed into new electronics. Hitachi aims to commence full recycling operations by 2013 after calculating overall recycling costs and recovery ratio. The development of Hitachi’s research is believed to bring the advancements needed in the neodymium and rare earths market that will increase accessibility to these commodities, reduce the cost of processing and alleviate the environmental burden of extraction. Works Cited Basantani, Mahesh . "The Maglev: The Super-powered Magnetic Wind Turbine." Inhabitat. Nov 26, 2007: n. page. Web. 14 Oct. 2011. <http://inhabitat.com/super-powered-magnetic-wind-turbine- maglev/>. Biello, David. "Rare Earths: Elemental Needs of the Clean-Energy Economy." Scientific American. October 13, 2010: n. page. Web. 14 Oct. 2011. Bradsher, Keith. "Challenging China in Rare Earth Mining." New York TimesApr 21, 2010. n. pag. Print. <http://www.nytimes.com/2010/04/22/business/energy- environment/22rare.html?pagewanted=all>. Caploe, David. "Japanese Recycling Weakens China’s Rare Earth Stranglehold." Oilprice.com. Oct 7, 2010: n. page. Web. 14 Oct. 8
  9. 9. Neodymium 201 1 2011. <http://oilprice.com/Metals/Commodities/Japanese-Recycling- Weakens-Chinas-Rare-Earth-Stranglehold.html>. Clenfield, Jason, Mariko Yasu, and Stuart Biggs. "Hitachi Leads Rare Earth Recycling Efforts as China Cuts Access to Supply." Bloomberg. Dec 8, 2010: n. page. Web. 14 Oct. 2011. <http://www.bloomberg.com/news/2010-12-08/hitachi-recycles-rare- earth-as-china-crimps-supply.html>. Dempsey, Judy. "Europe Moves to Recycle Rare Earths." New York Times Jan 27, 2011. n. pag. Web. 14 Oct. 2011. <http://www.nytimes.com/2011/01/28/business/global/28rare.html>. Hatch, Gareth P. "Going Green: The Growing Role of Permanent Magnets in Renewable Energy Production and Environmental Protection." Terra Magnetica. Dexter Magnetic Technologies, Inc., May 2008. Web. 14 Oct 2011. <http://www.terramagnetica.com/papers/Hatch-Magnetics- 2008.pdf>. "Hitachi develops recycling technologies for rare earth metals." Physorg.com. N.p., December 16, 2010. Web. 14 Oct 2011. <http://www.physorg.com/news/2010-12-hitachi-recycling- technologies-rare-earth.html>. Humphries, Marc. "Rare Earth Elements: The Global Supply Chain ."Federation of American Scientists. Sep 6, 2011 : n. page. Print. <http://www.fas.org/sgp/crs/natsec/R41347.pdf>. "Japan Wants to be World Leader in Rare Earth Recycling." Alt Energy Stocks. Kidela Capital Group , May 22, 2011. Web. 14 Oct 2011. <http://www.altenergystocks.com/archives/2011/05/japan_wants_to_be _world_leader_in_rare_earth_recycling_1.html>. LaMonica, Martin. "Rare-earth metal recycling needed to power green tech." cnet. CBS Interactive, May 17, 2010. Web. 14 Oct 2011. <http://news.cnet.com/8301-11128_3-20005097-54.html> Lifton, Jack. "Braking Wind: Where's the Neodymium Going To Come from?." G . n.d. n. page. Print. <https://www.gplus.com/natural- resources/insight/braking-wind-wheres-the-neodymium-going-to- come-from-35041>. Margonelli, Lisa. "Clean Energ'ys Dirty Little Secre." Atlantic. May 2009: n. page. Print. <http://www.relooney.info/SI_Rare-Earths/Rare- Earths_217c.pdf>. "Neodymium." Science Fair Adventure. Sciencefairadventure.com, 2007. Web. <http://www.sciencefairadventure.com/Neodymium.asp&xgt;. "NEOMAX® Neodymium Rare Earth Permanent Magnet." Hitachi. N.p., 2011. Web. 14 Oct 2011. <http://www.hitachi.com/environment/showcase/solution/materials/n eomax.html>. 9
  10. 10. Neodymium 201 1 Parry, Simon, and Ed Douglas. "The True Cost Of Britain's Green Obsession: Pollution On A Disastrous Scale." Global Warming Policy Foundation. Jan 30 2011: n. page. Web. 14 Oct. 2011. <http://www.thegwpf.org/uk-news/2339-the-true-cost-of-britains- green-obsession-pollution-on-a-disastrous-scale.html>. Pasternack, Alex. "Chinese Maglev Wind Turbines Enter Mass Production."Treehugger. Nov 6, 2007: n. page. Web. 14 Oct. 2011. <http://www.treehugger.com/files/2007/11/chinese_mag_lev.php>. "Rare Earths 1." U.S. Geological Survey. N.p., Jan 2011. Web. 14 Oct 2011. <http://minerals.usgs.gov/minerals/pubs/commodity/rare_earths/mcs- 2011-raree.pdf>. "Recycling rare earth elements is a tough task." Deutsche Welle. Sep 02, 2011: n. page. Print. <http://www.dw- world.de/dw/article/0,,14831729,00.html>. Robison, Peter, and Gopal Ratnam. "Pentagon Loses Control of Bombs to China Metal Monopoly." Bloomberg. Sep. 29, 2010: n. page. Web. 14 Oct. 2011. Sadden, Euan. "New Push to Recycle Rare Earth Minerals." Matter network. N.p., Mar 11, 2011. Web. 14 Oct 2011. <http://www.matternetwork.com/2011/3/new-push-recycle-rare- earth.cfm>. Tabuchi, Hiroko. "Japan Recycles Minerals From Used Electronics."New York Times Oct 4, 2010. n. pag. Web. 14 Oct. 2011. <http://www.nytimes.com/2010/10/05/business/global/05recycle.html? pagewanted=all>. Why Are Neodymium Magnets So Strong?." eHow. Demand Media, Inc., 2011. Web. 14 Oct 2011. <http://www.ehow.com/about_5297656_neodymium-magnets- strong.html>. 10

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