Solar power is starting to…
Iran is now officially pre-qualifying…
After 20 years of careful planning China put itself in a position to be the “OPEC of rare earth metals”, they have such control of the market that commentators have compared their importance to this sector as one would the Middle East for oil.
Over the years they have invested heavily in rare earth element (REE) exploration projects and the construction of mines and processing plants. They run the plants at the lowest cost possible without bothering to perform the expensive clean-up of the slightly radioactive waste, which other, more morally balanced countries would pursue.
REE’s are used in the production of solar panels, hybrid cars, advanced weapons systems, and other high-value, advanced technology. Metals like neodymium and dysprosium are used in the powerful magnets used to drive the motors of hybrid and electric cars, whereas terbium is used to cut the electricity demand of lights by up to 80%, vital for the production of energy efficient light bulbs. China supply 97% of such metals to the market.
Due to their monopoly of the REE market they effectively control the development of green technology. Prices of REEs soared in 2011 when they announced that they would limit exports, citing resource depletion and environmental damage. Dysprosium increased from $300 per kg to $1,900 per kg, and Neodymium shot up from $45 to $450 per kg. China was then able to flood the market with cheaper products, making it unprofitable for companies and governments to try and compete. Due to Chinese competition the world’s biggest REE mine, situated in Mountain Pass, CA, was closed, making the US completely reliant on Chinese imports.
Japan is China’s biggest importer of rare earth metals accounting for more than one third of the total global demand. It has made a name for itself as a world leader in environmental technology, and has invested heavily in the pursuit of that reputation. For instance, each Toyota Prius hybrid vehicle requires more than 50 pounds of rare earth metals in its production. To battle this reliance the government has been supplying subsidies for the recycling of the metals and also the investigation into new ways to limit their use.
It seems that it has all paid off.
According to Japan’s Kyodo News, Toyota has just developed a way to make hybrid cars without the use of the expensive REE’s. They are already the world’s top producer of hybrid cars such as the Prius, and could bring the new technology to the market within two years if the price of REEs does not drop. A spokeswoman has said that they will continue to research rare earth metal usage.
Japans new technology really could improve the clean energy market, removing the reliance on China’s expensive metals and allowing competition to return. China must be worried. Not only will they lose revenue from their REEs, but they will also experience new competition in the renewable energy markets.
By. James Burgess of Oilprice.com
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…