April 2, 2012 (Source: Business Standard) — Toyota Tsusho Corp of Japan, which is in the process of commissioning a rare earths plant in Odisha is lucky to have been spared agitations by hairshirted environmental groups that are the fate of similar smelters built elsewhere in the world. Agitations are because any smelter engaged in production of rare earths elements is fraught with harming the environment. Undeniably, mining and processing of rare earths will leave in their wake many toxic and radioactive by-products.
Fears of fouling the environment and inviting the wrath of environmentalists are what have so far largely restrained developed countries, including the US, from producing rare earths. It is only now, frustrated by shenanigans of China, the source of 90 per cent of the world’s processed rare earths metals, relating to imposition of unnerving export restrictions that alternative sources of supply are sought to be developed.
So, as Toyota Tsusho is readying itself to annually make 4,000 tonnes of rare earths oxides here from rare earths chloride mixtures, by-products derived from monazite minerals in the process of deriving fuels like uranium and thorium, the long abandoned mine at Mountain Pass in California is to be recommenced this year.
The world needs uninterrupted supply of 17 kinds of rare earth metals for making flat screen televisions, wind turbines, hybrid cars, weapons and new generation lighting devices. But with China playing truant – this is amply in evidence in reframed export quotas and their execution making it difficult to pin it down for infringement of rules laid down by the World Trade Organisation (WTO) – Australia, too, is off the blocks to mine and refine rare earth elements. This is despite the country owning less than two per cent of the global rare earth oxide resources. Neither the refinery coming up in Western Australia nor the one under construction in Pahang state of Malaysia by the Australian mining company Lynas at an investment of $235 million is spared protests on the grounds of potential leaks of radioactive waste.
Protestors have a point. But their concerns can be mitigated by employing foolproof technology which both Toyota Tsusho and Lynas are claiming to have employed in their respective plants in Orissa and Pahang. A reading of The Economist piece on the subject lets one see the dialectics involved in mining and refining rare earth elements. It goes like this. The goal being to keep carbon dioxide emissions level in the atmosphere to “a tolerable level of global warming,” it is imperative “peppering the landscape with wind turbines and replacing petrol-guzzling vehicles with electric ones.”
But for making magnets essential for generators and motors of wind turbines and electric cars, rare earths dysprosium and neodymium are essential. Three materials scientists from MIT have said in an article published in Environmental Science and Technology that if wind turbines and electric cars are to play their role in limiting carbon emissions, then there is going to be an exponential rise in demand for dysprosium and neodymium in the next 25 years. This has led The Economist to say “barring a breakthrough in magnet technology… the world’s geologists would do well to start scouring the planet for rare earths ores now.”
In our country reserves of monazite minerals along the shores are found in abundance. While it may be owning 17 per cent of the world’s beach sand mineral resources, its share in global production is hardly six per cent.
China has been a constant source of irritation, as it keeps the rest of the world on tenterhooks about supply of strategic rare earths metals. This has finally led the US, the EU and Japan to jointly file a trade case against China so that there is no violation of internationally accepted trade rules.
Whether the joint move is too little and too late remains a subject of animated debate. In the meantime, China continues to play its rare earths card deftly. Last year, WTO pulled up Beijing by passing an order dismantling Chinese export duties and quotas on nine industrial raw materials. Smarting under the ruling, Beijing now requires of companies having export quotas of rare earths metals to pass the environment muster before they are given clearances to ship out any consignments to foreign destinations.
In the first place China remains annoyingly stingy in releasing export quotas. It may not, however, be wrong in believing that WTO will find it difficult to pass strictures against China for being export obstructive because of the environment angle involved in using quotas.
An important plank of Chinese strategy could be by being acutely ungenerous in releasing export quotas of rare earth metals, it could get many foreign companies desperately needing such materials to open shop in the mainland. This already has happened. Now that quota execution has been made so much more difficult, other foreign companies are likely to build manufacturing units in China in order to be spared tensions about sustained supply of such metals. Moreover, users in China get their supplies at comparatively low costs. At the same time, skyrocketing of rare earths prices in the world market is the incentive many countries, including India needed to start making investments in mining and processing of rare earth minerals.