Who will challenge China on rare earths
China's rare earth monopoly is a serious security problem, but emancipating it from the Dragon is no simple matter. Giovanni Brussato's analysis for Energy Magazine
It is now known in the news that China holds a monopoly on 'rare earths', Rare Earth Elements (REE), elements also defined as 'industrial vitamins' because they are irreplaceable in many strategic areas.
In reality, not all rare earths have the same importance, and they are not even that rare: they are simply complex to separate to obtain commercial products since, not being pure metals, they are found in low concentrations in rocks.
With an annual production of just over 150,000 tons, the turnover of rare earths used in the hi-tech and armaments sectors reaches figures equal to a few billion dollars.
Among these 17 elements, only a few play a central role in green technologies, notably neodymium (Nd), praseodymium (Pr), terbium (Tb) and dysprosium (Dy), otherwise known as 'magnetic rare earths'. It is not possible to build a wind turbine without permanent neodymium-iron-boron (NdFeB) magnets.
China produces over 85% of the magnets that go into wind turbines, including those of its competitors. To understand the reasons for the Chinese monopoly and hypothesize possible independent procurement strategies for the EU and the US, it is necessary to separately analyze two aspects: the current value chain and the patents relating to the uses of these metals and alloys.
THE SUPPLY CHAIN OF RARE LANDS
The rare earth value chain can be condensed into three parts:
(I) extraction and production of concentrates;
(III) separation and conversion into metals and alloys;
(III) mainly manufacturing manufacturing of commercial products (eg permanent magnets).
In the first part, after the crushing of the raw mineral, usually with a percentage of less than 10% TREO ( total rare earth oxides ), the enrichment processes are carried out to remove the gangue minerals, producing a concentrate subject to further treatments.
In this phase the percentage passes to 40-70% REO ( rare earth oxide basis ) but its commercial value is still limited: significantly less than 10,000 euro / ton. This is due to the fact that the oxides have not yet been separated and therefore elements with limited commercial value are also present. Today, many mining plants around the world, such as the historic Mountain Pass, must send the ore to this stage in China for production to be completed.
The second part begins with the separation of the oxides in order to obtain 99.9% pure oxides, where for elements such as neodymium the value goes to over 37,000 euros / ton and is completed with the production of metal powders, metals, such as lanthanum. and neodymium, or alloys such as neodymium-praseodymium-iron-boron (NdPrFeB).
This phase is now fully controlled by China, which supports research in this area with massive government grants. It is from this phase that the powders used in the manufacture of objects by sintering derive, a process which, compared to traditional metallurgy, allows to obtain alloys that otherwise would segregate during melting.
THE WAR OF PATENTS
China issues more patents for the production and use of rare earths every year than all other countries. By 2021 it will have accumulated more patents than the rest of the world has ever issued.
Patent applications are an indicator of R&D spending and can foreshadow incremental and next-generation advances in China's rare earth products.
The applications patented by China now cover the most varied areas of use: from formulations that allow you to lower the content of rare earth elements while maintaining the same magnetic power of its products, to magnesium alloys where the addition of elements such as lanthanum, praseodymium , cerium and yttrium significantly improves their ductility and resistance to high temperatures.
These alloys, in addition to being easy to recycle, are up to a third lighter than those of aluminum and with their resistance to vibrations and electromagnetic radiation they find use in aerospace applications, in cars, in railway equipment, in mobile phones and computers. .
There is no doubt that China is way ahead of anyone else in the world in terms of intellectual property and rare earth knowledge, both on the material processing side and downstream applications, but the Dragon also has its thorn in the side: the Japanese company Hitachi Metals.
Today, in fact, there are two original patents to produce sintered NdFeB magnets useful in the wind industry: one from Hitachi Metals, the other held by Chinese-owned Neo Materials (Magnequench), acquired by General Motors.
Japanese production remains the leader in terms of product quality, even though Chinese producers have quickly caught up with Japanese producers since 2010, then surpassing them in production capacity and production costs, lower thanks to the efficiency of their supply chain, lower costs energy and labor.
The world shook when Hitachi Metals went on sale, as Beijing's Zhong Ke San Huan Hi-Tech was among the potential buyers. The sale to the group led by Bain Capital, which is part of a consortium that includes Japan Industrial Partners and Japan Industrial Solutions, has dispelled the possibility of China gaining an absolute monopoly on NdFeb magnets.
As for production, China remains the only country capable of separating heavy rare earths.
The investment to create an alternative supply chain to the Chinese one for the production of magnets requires a strong economic effort from a group of customers who, with the support of the government, can commit to a withdrawal agreement for a period medium-long term including a guaranteed minimum price in addition to the time required to complete the industrial set-up
An integrated chain is needed: the six steps of the process from raw material to oxide, from metal to alloy to magnet do not have to be in economic competition with each other because this could make the whole operation unsustainable.
(Extract from an article published in Energy Magazine; here the full version)
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/cina-terre-rare-monopolio-filiera-alternativa/ on Sat, 10 Jul 2021 06:30:03 +0000.