China Rare Earths Leave Toxic Trail to Toyota, Vestas
Rare earth
metals are key to global efforts to switch to cleaner
energy – from batteries in hybrid cars to magnets in wind turbines. Mining and
processing the metals causes environmental damage that China, the biggest
producer, is no longer willing to bear.
China’s
rare earth industry each year produces more than five times the amount of waste
gas, including deadly fluorine and sulfur dioxide, than the total flared
annually by all miners and oil refiners in the U.S. Alongside that 13 billion
cubic meters of gas is 25 million tons of wastewater laced with cancer-causing
heavy metals such as cadmium, Xu Xu,
chairman of the China Chamber of Commerce of Metals, Minerals & Chemicals
Importers & Exporters, said at a Beijing conference on Dec. 28.
“China
supplied the world with very cheap and good-quality rare earths for more than a
decade at the cost of depleting its resources and damaging its environment,”
Wang Caifeng, who heads the government-affiliated
China Association for Rare Earths, said at the conference. “The world should
thank China.”
With
China now shutting down unregulated rare earth mines and slashing exports,
users from Toyota Motor Corp. to Vestas Wind Systems
A/S, the world’s biggest maker of wind turbines, are concerned that supplies
may be constrained. China provides more than 95 percent of global shipments of
the 17 rare earth metals, also used in mobile phones, catalysts to reduce
automobile exhaust emissions and energy-saving electronics.
The
government cut export quotas for the first half of 2011 by 35 percent last
month. That follows a 72 percent reduction in the second half of 2010, causing
the price of some of the metals to more than double.
Mining companies including Lynas Corp. from Australia and Molycorp
Inc. in the U.S. plan to make up the supply shortfall. Molycorp
said Nov. 1 it restarted processing at a mine in Mountain Pass, California,
that closed in 2002.
That
mine had its own environmental problems, resulting in Molycorp,
then a unit of Unocal Corp., paying $1.6 million to settle with state agencies
after toxic wastewater leaks in the 1990s.
With
rare earths in short supply, Molycorp shares more
than tripled last year on the New York Stock Exchange. Lynas
also more than tripled on the Australia Securities Exchange in 2010.
Vestas uses the rare earth neodymium in magnets for its V112 wind
turbine, which enters production next year, Michael Holm, a spokesman, said in
a telephone interview.
Rare earth metals aren’t rare.
Cerium used in batteries and to cut auto emissions, is more common than copper
in the earth’s crust, accord-ing to the U.S.
Geological Survey Minerals Yearbook. The metals got
the name because they are difficult to extract, unlike concentrated deposits of
copper or gold ore.
The
Baotou region in Inner Mongolia produces about half of China’s annual output of
120,000 tons of rare earths, with Inner Mongolia Baotou Steel Rare-Earth
Hi-Tech Co. being the country’s biggest producer.
A
four-story tailing dam containing radioactive waste 12 kilometers (7 miles)
from Baotou has been “a serious problem” and polluted rivers, Chen Zhanheng, director of the academic department of the
Chinese Society of Rare Earths, said in an interview.
Baotou
Steel Group, which operates the Baiyun Ebo mine, has spent 500 million yuan
($75 million) with the local government to relocate five villages after seepage
from the dam polluted agricultural land and drinking water, China’s official
Xinhua News Agency reported on Nov. 7.
“All rare earth ores contain uranium
and thorium, which could pose a danger if not disposed of responsibly,” said
Dudley J Kingsnorth, who managed Australia’s Mount
Weld rare earths project for Ashton Mining of Canada Inc. for 10 years. He’s
now an independent consultant on the metals.
Rare earths require more chemicals to separate than
base metals such as copper, zinc and lead, said Bernd Lottermoser,
a professor of environmental earth sciences at James Cook University in
Queensland, Australia.
China toughened regulations in 2009 and set
production quotas to bolster prices. Subsequent export restrictions combined
with rising demand have caused the price of neodymium, used in Toyota’s Prius hybrid car, to surge four-fold to $80 a kilogram from
$19.12 in 2009, according to Lynas.
The world excluding China will require 55,000 to
60,000 tons of rare-earth metals this year, of which as much as 24,000 tons
will come from China, Molycorp’s Chief Executive
Officer Mark Smith said in a Jan. 3 interview on Bloomberg Radio. The company
may double its planned production to 40,000 tons in 2012 to help meet global
demand, he said.
Sydney-based Lynas is
building a A$550 million ($550 million) rare earths
project at Mount Weld, Western Australia.
Devil You Know
Molycorp’s mine won a San Bernardino County permit in 2004 to operate for 30 years
and passed another inspection in 2007.
Processing improvements at that California mine
will almost cut in half the amount of raw ore needed to produce the same amount
of rare earth oxides, Molycorp’s Smith said during
testimony to the U.S. House Science and Technology Committee in March. Water
recycling and treatment processes will reduce the mine’s fresh water usage by
96 percent, he said.
“This is one that could be reopened with strong
regulatory and environmental oversight,” Glenn Miller, professor of natural
resources and environmental science at the University of Nevada-Reno, said in a
phone interview.
“A lot of these metals are used for environmental
purposes that are really important,” Miller said. “It’s far better to reopen
this mine, where you have a known geological deposit, than go into a new
country.”