Gold is valuable, and it is rare, but it is not a rare earth.
While gold has far greater monetary value, it has far fewer industrial uses.
Rare earths, on the other hand, are vital to the modern high-tech era.
Rare earths seem to dangle loosely from the periodic table, starting with Scandium and Yttrium forming the yoke from which the others hang, with Lanthanum and the rest dangling as an appendage to the periodic table. (Also hanging with them are actinides, but that’s another story, and one that affects nuclear energy.)
Gold may catch the eye of the investor, but rare earths have suddenly become “golden” in the sense that they are essential ingredients in modern, high-tech products.
Neodymium, for example, is used in powerful permanent magnets needed for hybrid cars and electric vehicles, as well as for wind turbines.
Rare earths, such as europium and terbium are used in LCD’s, LED’s, TV’s, CAT Scanners, and MRI’s.
Rare earths are also essential for many military hardware applications, such as night-vision goggles and jet engines. Congress has proposed establishing a rare earth stockpile to assure the availability of rare earths for the military, but it’s not yet in existence.
China has been the major producer of rare earths and they have recently announced they are cutting exports of rare earths by 30%. This leaves the rest of the world scrambling for new sources of supply.
Rare earths have two things in common with each other:
First, they really aren’t that rare around the world, but they rarely exist in large enough quantities to be mined economically.
Second, their chemical properties are similar so that it’s difficult to separate them from one another, making it expensive to process the mined material into pure substances that can be used in high-tech applications.
The modern 1.5 MW wind turbine, typical of most new wind turbines being installed today, uses about 500 pounds of neodymium. About 3,400 wind turbines were installed in the U.S. during 2010, using approximately 1.7 million pounds of neodymium.
Compact fluorescent lamps (CFL) will use thousands of pounds of yttrium, terbium and europium. Since most CFLs are made in China, the monetary benefits will accrue to China. If the price for rare earths increases, then the price of CFLs will also increase.
Where are incandescent bulbs when we need them? Nowhere, unless Congress repeals the prohibition on their sale.
Over the past year, neodymium oxide, used in magnets, has risen in price from $20,000 per ton to $160,000 per ton. Think how that will affect electric vehicles, plug-in electric vehicles and wind turbines, not to mention plain hybrid vehicles.
New sources and old mines, such as Molycorp’s, are being built or reopened. These will help stem the trend toward higher prices for rare earths.
Recently, rare earths were discovered in the Pacific. Interestingly, these deposits were found East and West of Hawaii and East of Tahiti in international waters at depths between 11,500 and 20,000 feet.
It will take years to access these deposits, and they won’t provide any relief in the near future.
Rare earth mines have been proposed for Alaska, Wyoming, Colorado and Idaho. It will be amusing to watch environmental organizations as they denounce mining while still clamoring for the rare earths that are essential for their pet projects, such as wind energy and electric vehicles.
Mines elsewhere in the free world, such as in Australia, will help provide new sources of supply, but importing expensive rare earths will exacerbate our balance of payments problem.
Rare earths can play an important role in future energy production and usage, as well as in communications equipment and military hardware, and the United States needs to ensure an adequate supply at a reasonable cost.
Note: Publications from the Colorado School of Mines are a valuable source of information.
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