Rare Earth Revival

It’s not a ’70s rock band reunion, but a critical message to Congress from Iowa State’s Karl Gschneidner

At an age when most people are booking cruises and bouncing grandkids on their knees, Karl A. Gschneidner Jr. is a man looking to start something.

Restart something, to be precise.

Together with several other leaders in research and industry, on March 16 Gschneidner appeared before a subcommittee of the U.S. House Committee on Science and Technology to discuss the consequences to America’s tech and defense sectors of the impending suspension of exports of rare earth elements from China, on whom the world depends for 95% of the scandiumyttriumneodymium, and 14 other rare earths used in the manufacture of magnets, batteries, superconductors, and other staples of high technology.

Besides Gschneidner, those offering testimony before the subcommittee included Roderick G. Eggert of the Colorado School of Mines, who also chairs the National Research Council’s Committee on Critical Mineral Impacts on the U.S. Economy; Steven Duclos, manager of material sustainability for General Electric Global Research; Mark Smith, CEO of Molycorp Minerals, a rare earths mining company; and Terence Stewart, managing partner of Stewart and Stewart, a law firm specializing in international trade.

Death of a domestic industry

A little history—and a definition—are in order. Despite their name, “rare earth elements” aren’t really that rare; in fact, they’re fairly common across the globe, including significant deposits in North America. But although rare earths may not be “rare,” the means to extract and refine these critical elements are costly.

As with many industries the last couple of decades, beginning in the 1980s western tech and defense firms discovered in China a ready, reliable, and, above all, cheap source of rare earths. Inevitably, American rare earth extraction, processing, and manufacturing industries, as well as the academic and governmental research sector that supported them, withered on the vine.

“The prices were such that American producers couldn’t compete,” Gschneidner observes. “So there’s no longer any permanent magnet manufacturing done in the U.S.; there’s no industry here.”

But with its own economy experiencing explosive growth in the new century, China has increasingly felt the need to redirect rare earth production to domestic consumption. As a result, last fall Beijing announced drastically lower quotas that will effectively end rare earth exports as soon as 2014—a mere four years down the road.

That the west’s rare earth “crisis” should coincide with China’s breathtaking domestic ramp-up of high-tech industries is no coincidence. Not only is China aggressively developing its wind power—today the Chinese trail only Germany and the United States in total installed wind capacity—it is rapidly expanding its high-speed rail network, which includes the world’s first commercial high-speed magnetic levitation route. With plans to become the global leader in both these industries, it is hardly any wonder, then, that China would reserve its production of rare earths critical to such efforts for domestic consumption.

The vulnerability of dependence

The Chinese export quota announcement last fall was a wake-up call that got the attention of U.S. industrial and political leaders. And, when you consider the possible economic and defense implications of China’s move, it’s not hard to understand why.

“There are two potential problems,” Gschneidner explains. “One, a lot of rare earth materials go into computers—practically all our U.S. weapons systems depend on computers. So if the Chinese act a little belligerent, it could have a very serious impact. And two, they’ve started quotas because they don’t want to export rare earths; they want to use them internally.”

That should not come as a surprise, says Jack Lifton, a leading consultant in the rare earth industry. Writing on his blog, Lifton reminds his readers that, while often exploiting free markets in the best traditions of capitalist culture, in significant respects China does not subscribe to the same brand of economic globalism that has spurred western democracies to outsource entire industries to the lowest international bidder or vendor.

“Balance sheets don’t matter,” Lifton says. “As soon as Chinese industry needs raw materials, these are directed from the heavily indebted to the government mines to where they are needed. Foreign buyers are simply told that the desired material is sold out.”

Unless, of course, those “foreign buyers” are in fact U.S. and other western firms attracted not only by China’s abundant supplies of rare earths, but also its cheap labor, land, and comparatively lax regulatory environment. Indeed, as The New York Times reported two days after Gschneidner and his colleagues testified before Congress, China is openly courting—and convincing—western high-tech R&D programs to relocate to China, where they will find an abundance of resources, including the same access to rare earths enjoyed by domestic Chinese companies.

It’s not as if America’s political leaders are oblivious to the consequences of such dependence, both for defense applications and for developing energy technologies. In an October article in Roll Call, Alaska Senator Lisa Murkowski, ranking member of the Senate Energy and Natural Resources Committee, outlined the contours of the crisis, noting that in 2008 the United States imported over 50 percent of its supply of 43 strategic minerals and other materials.

“This growing dependence is important because minerals offer our best chance to harness the potential of clean energy,” Murkowski wrote. “Even now, we import 100 percent of the quartz crystal used in photovoltaic panels, the indium used in LED lighting, and the rare earth metals used in batteries and permanent magnets. We risk a future,” she concluded, “in which wind turbines, solar panels, advanced batteries, and geothermal steam turbines are not made in the USA, but somewhere else.”

Research critical to revival

Not only is Karl Gschneidner arguably the dean of rare earth research in the United States, he is also a fellow of the National Academy of Engineering, one of whose functions is to advise Congress on technical matters of concern to America’s economy and defense. As such, he offered the House subcommittee a history of rare earth research in America—with a special emphasis on the leading role of the USDOE’s Ames Laboratory.

Ames Lab leapt into the vanguard of American rare earth research during the Manhattan Project of the 1940s and today still boasts one of the largest concentrations of specialists doing basic research in rare earths in the United States. Given the developing crisis in rare earths, that’s a distinction Gschneidner feels can be of enormous potential benefit to both Ames Lab and Iowa State University.

“Ames Lab is one of the premier rare earth research facilities in this country,” Gschneidner says. “We were and still are. So [the committee] wanted to know, ‘OK, what happened?’ Well, we had separation facilities, we had processing metallurgy, we had excellent analytical facilities—these have all gone.”

The commercial extraction and refining sector of America’s rare earth rebirth will largely take care of itself—Lifton notes the “recent rare earth investment mania” since fall 2009, when the Chinese stunned the world with their announcement of new export quotas. But without a robust research component, Gschneidner argues, American commercial producers and manufacturers will not be able to compete with China’s existing, and Europe’s and Japan’s developing, rare earth industries.

“The country now faces a shortage of trained scientists, engineers, and technicians,” Gschneidner told the committee, “and a lack of innovation in the high-tech areas, which are critical to our country’s future energy needs.”

Rebuilding the edifice

It doesn’t take a congressional inquiry to discover what Karl Gschneidner thinks the nation should do about that. The United States has never been content merely to be an exporter of raw or even refined materials for other nations to build added wealth upon. And, given their critical role in 21st-century technologies, rare earths are about the last area in which the nation wants to lag a world hungry to overtake America’s historical dominance in high-tech research.

“So it comes down to rebuilding these things,” Gschneidner says. And when it comes to rebuilding a research edifice in rare earths, there’s no doubt in Gschneidner’s mind that it doesn’t make sense to pour a new foundation when America already has one in place in the persons of Gschneidner and his Ames Lab colleagues—not to mention the broader materials, physics, chemistry, and general scientific and engineering resources Iowa State has to offer.

“Now, it’s not all going to be done here—I don’t think we’ll go into separation chemistry,” says Gschneidner. “But my proposal [to the committee] was that we have a national research center at a university that has a long and active history in rare earths.

“No specific university!” Gschneidner is quick to add, then smiles. “But anybody can read between the lines.”

Karl A. Gschneidner Jr. is cited in “Global Scramble Looms for Vital ‘Clean Energy’ Minerals,” appearing April 12, 2010, in The New York Times.

2 thoughts on “Rare Earth Revival

  1. I teach national security decision making at the U.S. Naval War College and from a national security perspecive, I find this fascinating. We are becoming more and more dependent on China – in ways that we could not have even imagined a decade ago. This is one way in which America can take the initiative back, but we need to act now! I hope Congress is listening to these esteemed scientists.

  2. Thanks for contributing to the conversation, Casey. Yes, the Sino-American relationship is fraught with economic and military complications we never could have imagined in what seemed (at the time) our simpler, if potentially deadlier, relationship with the former Soviet Union. A big part of that, of course, is no doubt due to the breathtakingly rapid globalization of the world economy over the past quarter century, a phenomenon that has aided China’s ascendancy while at the same time increasing our dependency on potentially (and now, actually) unstable sources of strategic materials. I’ve little doubt Washington will listen to people such as Dr. Gschneidner and his colleagues, and that we’ll see significant ramp-up of domestic rare earth production in the near future. (I don’t think we have much choice.) Od course, along with Dr. Gschneidner, we’d love to see a big chunk of that research activity hit ISU/Ames Lab, but the important thing is that we just get it done.

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