Why Rare Earths Are Constantly Being Discovered Yet Remain Scarce
We have known about the rare earths in Sweden not just since the beginning of this year – just as we have known about the problems their extraction causes.
We are constantly reading about new discoveries of rare earths, newly launched mining projects and promising test facilities in which the separation of these rare commodities is being tested. The news piles up, giving the impression that the western world is on the verge of a huge market breakthrough. The reality is quite different: The problem with rare earths is not their rarity, but their scarcity. And this is caused by the conditions under which they are mined.
Rare Earths from Kiruna: Not for Another 10 to 15 Years
The fact that over a million tons of rare earths lie beneath Kiruna has been known not just since their discovery earlier this year. Rather, there seemed to be a reluctance to extract this raw material treasure. There were plenty of good reasons for this: a lack of mining expertise, high costs, and the unresolved question of what to do with the radioactive uranium and thorium that inevitably arise during extraction. The outcry of joy over the “new discovery” at least indicates a willingness to seek solutions to these problems, instead of using them as an excuse to leave the “dirty business” of rare earths to China. However, it does not mean that we can utilize these rare earths immediately. Instead, long approval processes and a complicated extraction procedure mean that another 10 to 15 years will pass before rare earths from the Swedish mine become available on the world market.
Mining Protested in Many Countries
Furthermore, protests are expected due to the impact of mining on the indigenous population. The Sami, indigenous people of Lapland, live from reindeer herding. As mining operations in Per Geijer, northern Sweden, would prevent their reindeer from reaching pastures, residents intend to take legal action. They had successfully done so in the past. Protests also regularly occur in Malaysia. Lynas Corporation has its refinery there, against which residents frequently demonstrate due to potential environmental damage. Sooner or later, this could lead to the company having to relocate its site back to Australia. Citizens of Madagascar are also protesting against rare earth mining in their area. They fear not only consequences for the island nation’s rich ecosystem but also the destruction of agricultural land and thus their livelihoods.
Unforeseeable Environmental Consequences Require Lengthy Approval Processes
Environmentalists in Norway are demonstrating against deep-sea mining: huge manganese nodules have been found below sea level, which also contain rare earths such as scandium. However, extraction would have unforeseeable consequences for the marine ecosystem. And in Spain, more precisely in Ciudad Real, in the southwest of the Spanish Meseta, a project was planned to extract rare earths from 200 tons of monazite ore daily. This was stopped by court order after protests from environmentalists, as the mining would have endangered the survival of the Iberian lynx settled there. In Greenland, environmental arguments could also lead to at least delaying the extraction of the world’s largest rare earth deposit. Experts assume that the discovery could cover global demand for 150 years. Tanbreez Mining could begin extraction as early as 2024. However, environmentalists assume that mining the slightly radioactive eudialyte ore in the area could harm the Arctic environment. Since the ecosystem on the Arctic island is considered one of the most sensitive worldwide, it is quite possible that long investigation procedures and legal actions could delay extraction by many years, if not decades.
Uganda Project Has Low Ore Grade
Another new project is “Makuutu” in Uganda. This is considered one of the most advanced mining ventures in the field of heavy rare earths. The associated mine contains 532 million tons of ionic clay interspersed with MREC (“mixed rare earth carbonite”). Production is scheduled to start as early as 2025. The ore grade is 640 ppm, which corresponds to 0.064%. This value is not very high. Mines with the highest rare earth content worldwide are around 14%.
Lack of Refineries
Europe remains dependent on further processing rare earths. Europe currently has only one refinery for this purpose, located in Sillamäe, Estonia. Otherwise, rare earths must be transported to the USA, Canada, or Vietnam for processing. However, Europe still sends the vast majority of its ores to China.
Supply Chains as a Guarantee of Scarcity
The Supply Chain Due Diligence Act also contributes to the likelihood that rare earths will remain scarce. BMW is facing legal action due to problematic conditions in Moroccan cobalt mines. As companies also bear responsibility for the origin of rare earths used, it is becoming increasingly important to produce them sustainably. Projects for such production already exist, for example, in Norway. Since their expansion is slow, green rare earths will certainly remain a rare and thus expensive commodity for a long time to come.
Through both the numerous projects and the ESG criteria in mining, China’s hegemony in the rare earths sector will be broken in a few years. However, it is not yet that far.