SUBJECT: "China's Ace in the Hole: Rare Earth Elements" from Joint Force Quarterly 59, 10/2010
To the Editor:
As a technologist who advises major mining companies, wrote two books on metal-mining and a 445-page text on efficient drivesystems, did rare-earth (RE) physics research at MIT Lincoln Lab, and consulted for the MIT National Magnet Lab, I welcome
Cindy Hurst's JFQ 59 article on China's RE resources, activities, and expertise. However, like many such supply-side stories, her article's relative neglect of demand-side alternatives could stimulate already-widespread but exaggerated concern about REs.
For example, neodymium is similar in crustal abundance to lead or chromium, though far less prone to form high-grade ores. Today's most powerful permanent magnet (Nd2Fe14B), discovered by GM and Sumitomo in 1982, is about one-fourth neodymium by mass, spiked with dysprosium (or costlier terbium) and praseodymium. Chinese production and pricing strategy have helped make such magnets ubiquitous. Roughly 50,000 tons are made each year—mostly in China, which naturally prefers exporting value-added products to raw materials.
However, everything such permanent-magnet motors or generators do can be done as well or better with switched-reluctance (SR) machines made of just iron and copper with no magnets. They're simpler, more rugged, equally light and compact (contrary to the quoted GE statement), are more flexibly controllable, can run hotter, and cost less for the same torque and production volume. Such capable SR machines' only scarce resources are skill in their more-difficult design—a near-monopoly of Switched Reluctance Drives Ltd, a U.K. subsidiary of U.S.-based Emerson Electric—and familiarity. Some other no-magnet or no-RE options are also attractive.
Fortunately, the key applications requiring certain REs' unique properties, such as europium for red phosphors or erbium for fiber-optic repeaters, use small quantities, and are also substitutable—e.g., LEDs for compact-fluorescent lamps, and bandwidth-enhancing, multiplexing, and wireless innovations for fiber capacity. The lanthanum in older hybrid cars' nickel-metal-hydride batteries becomes irrelevant as lighter lithium batteries take over (both kinds are recyclable but lithium is relatively abundant). And both motors and batteries get 2–3-fold smaller as vehicles become lighter and more aerodynamic.
Such options are special cases of a very broad phenomenon. Actual or perceived resource scarcity drives price, attention, and R&D, eliciting exploration (over 190 mining companies are investigating RE deposits); more productive, durable, and closed-cycle end-use; and substitution, which can displace a resource altogether—as with new non-RE, yet far more powerful, iron-nitride magnets being developed in the U.S. and Japan. Together, these shifts in economic geology, resource use, and innovation are extremely powerful. The main RE issue is probably neither scarcity nor oligopoly, but prospective price instability as increased effort to supply the more valuable "heavy" REs coproduces a glut of "light" REs.
LCDR Hurst's article identifies issues that merit attention but are very unlikely to shift strategic balance or create a resource crisis in military or civilian uses. I respect Chinese technical and executional capabilities, but anyone in China who expects its RE resources and skills to create significant advantage will be as surprised as King Fahd and President Putin will be when they discover that resource productivity and substitution have destroyed the hoped-for "ace in the hole" advantage of their countries' hydrocarbons.
Very respectfully,
Amory B. Lovins
Cofounder, Chairman, and Chief Scientist
The Rocky Mountain Institute