The Political Influence of Rare Earth Elements
Dain Rohtla — President Emeritus
The Natural Resource Curse is a social phenomenon which has been illustrated over the past several decades. Areas abundant in resources like oil, such as Venezuela, Russia, and the middle east have rampant inequality and corruption. The country devotes its development towards this export and neglects fostering its other capabilities; while at the same time funneling money to the elite. This year, COP26, set to take place in the Roosevelt Group’s home of Scotland, is consumed by public rhetoric which prompts further discussions of a carbon neutral future—how will energy geopolitics be affected?
If we assume the hypothesis that oil will fade out of use as we switch to renewables, we must look at the mechanics of this renewable power. Batteries and infrastructure ingredients are the new oil—the problem is that they remain localized.
Modern electronics use critical metals such as lithium, copper, uranium, and gold, also known as Rare Earth Elements (REEs). The elements themselves are not rare, but the economically viable mining deposits are because the elements are generally so sparsely disbursed. These metals are used in many technologies of increasing importance: a Tesla car requires about 15 pounds of lithium and solar panels use tellurium, one of the rarest metals on the planet. As populations grow, we expect higher standards of living and focus more on electronics rather than fossil fuels. Therefore, the demand for these minerals will continue growing exponentially. The critical issue is that China mines 93% of REEs, thus providing them with huge power in the societal shift towards electronics. China’s actions are capricious as well, complaints have been filed to the World Trade Organization against China for their unfair restriction of REEs.
A small consolation is the abundance of Thorium, the material required for proposed Thorium molten salt reactors. The seminal research of such was published in 2004 by researchers Moir and Teller (Manhattan Project alumna) of the Lawrence Livermore National Laboratory. Their research concluded that Thorium, the abundant and cheap resource, could be utilized in safer and cheaper reactors than uranium, which would be environmentally friendly. These have failed to take off because of society’s overall disdain for nuclear power plants due to attachments to ideas like bombs, Chernobyl, and Fukushima.
America likely has significant deposits of REEs, some estimate 13%, whereas China has 37%, but timelines for developing mines can easily span 10 years, and the process is naturally degrading for the local environment, not to mention its cheaper in China, which is why they are so much more advanced in their production. The company MP Materials is currently the only REE mining facility in America which supposedly supplies 15% of global REEs. MP Materials produces only the intermediate product and relies upon processing plants in Asia. Yet, the United States’ investment expansion in this field is noteworthy due to the country’s stark increase in demand for such metals; this increase is for renewable energy industries but also greatly impacts modern electronics such as phones and the defense industry—making it a matter of national security. Considering long lead-times and the fact that many governments and businesses look towards 2030 as the paramount timeline for carbon mitigation, more urgent action is suggested. Increased investment in Thorium could be beneficial to clean energy production, but even that still leaves us lacking the metals for other projects.
The past several decades have seen countries rise up due to their oil. Saudi Arabia, the United Arab Emirates, and Qatar developed on the back of oil production and military conflicts centered in those areas. Dictators like Libya’s Ghaddafi assumed power. If rare earth elements not only hold the key to a renewable future but are required in necessities like electronics and military defense, developing a secure supply chain is critical.