The Oil and the Glory

It takes more than being a China hawk to produce rare earth metals

Twenty months after China began to ratchet down its exports of rare-earth elements, the first new Western-run mine is more or less ready to crank out refined metals used in high-tech products including wind turbines, electric cars and missiles. But a delay in Malaysian permission to start the refinery illustrates how the West got into ...

Saeed Khan  AFP/Getty Images
Saeed Khan AFP/Getty Images

Twenty months after China began to ratchet down its exports of rare-earth elements, the first new Western-run mine is more or less ready to crank out refined metals used in high-tech products including wind turbines, electric cars and missiles. But a delay in Malaysian permission to start the refinery illustrates how the West got into this fix in the first place — rare-earth mining is among the dirtiest and stigmatized enterprises on the planet.

Australian-run Lynas has been the most aggressive Western company working to pivot off of draconian export reductions imposed by China in September 2010. The result is its rare-earth operations in Malaysia. It has been mining tons of ore in Australia in preparation for refining in the Malaysian town of Gebeng — it expects the ore to yield a relatively high 7.9 percent of rare-earth metals. But the refinery has been the subject of fierce public Malaysian protests (pictured above, a protest earlier this month), and government permission to open it has not yet been granted.

A mine in California called Mountain Pass used to be the world’s biggest rare-earth mine — until it was discovered that there had been enormous spills of radioactive waste-laced water into Ivanpah Dry Lake. The environmental backlash, in addition to plummeting global prices for rare-earth elements, resulted in the mine closing in 2002.

China picked up the slack. Since the 1990s, China had been on its own rare-earth mining buildup, and now it came to dominate the global industry. But in September 2010, China began a cutoff of rare-earths to Japan in a diplomatic spat over the East China Sea, and a general export reduction followed.

Part of Beijing’s export reduction has been a tough-guy inducement for Western companies using the elements to relocate factories to China, where they are offered cheap and liberal allotments of rare-earths.

But China is also attempting to clean up its industry. The New York Times’ Keith Bradsher has done probably the best reporting on the intense pollution and gangsterism that has characterized the Chinese industry.

The West has reacted to the rare-earths crisis with mining deals in India, Kazakhstan and Mongolia, in addition to a revival of Mountain Pass, which is to resume operations toward the end of this year and next. Manufacturers are developing substitutes for rare-earths.

Meanwhile near the Malaysian refinery, protests have broken out over fears of radioactivity. Local critics say there is evidence of birth defects at another Malaysian rare-earths operation. Lynas says it is demonstrating that its refinery is safe.

The delays go on, showing that there will be more to establishing a balanced rare-earths supply than mere anti-Chinese rhetoric.

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