The U.S. Department of Energy (DOE) has launched a research hub that focuses on solutions to the domestic shortages of rare earth metals and other materials critical for U.S. energy security.

Housed at Ames Laboratory in Iowa, Lawrence Livermore National Laboratory (LLNL) has been involved in establishing this Energy Innovation Hub since its conception more than two years ago. In 2010, on behalf of DOE, LLNL hosted the first U.S.-Japan workshop on rare earths elements. Ed Jones and Adam Schwartz have been closely tied to the initiative.

The initial team, made up of Ames, LLNL, Colorado School of Mines, and Molycorp Inc., established a 'national network' that eventually resulted in the proposal team; helped DOE on its critical materials strategy; and continued interactions on behalf of DOE at the international level.

The rare earths comprise 17 elements in the periodic table—scandium, yttrium, and the 15 lanthanides (lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium). Despite their name, the rare earths (with the exception of promethium) are not all that rare, but are actually found in relatively high concentrations across the globe. However, because of their geochemical properties, they seldom occur in easily exploitable deposits.

Rare earth elements are essential for American competitiveness in the clean energy industry because they are used in many devices important to a high-tech economy and national security, including computer components, high-power magnets, wind turbines, mobile phones, solar panels, superconductors, hybrid/electric vehicle batteries, LCD screens, night vision goggles, tunable microwave resonators—and, at the Laboratory, NIF's neodymium-glass laser amplifiers.

A DOE report said in 2011 that supply problems associated with five rare earth elements (dysprosium, terbium, europium, neodymium, and yttrium) may affect clean energy development in coming years.

The new research center, which will be named the Critical Materials Institute (CMI), will bring together leading researchers from academia, four DOE national laboratories, as well as the private sector.

"Rare earth metals and other critical materials are essential to manufacturing wind turbines, electric vehicles, advanced batteries and a host of other products that are essential to America's energy and national security, " says David Danielson, assistant secretary for Energy Efficiency and Renewable Energy. "The Critical Materials Institute will bring together the best and brightest research minds from universities, national laboratories and the private sector to find innovative technology solutions that will help us avoid a supply shortage that would threaten our clean energy industry as well as our security interests."

The hub will address challenges across the entire life cycle of these materials. This ranges from enabling new sources; improving the economics of existing sources; accelerating material development and deployment; more efficient use in manufacturing; recycling and reuse; and developing strategies to assess and address the life cycles of new materials.

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Its reports that a new research institute for rare earths is to be built in Ames, Iowa. The US Department of Energy will provide $120m for the Critical Material Institute.

The US wants to reduce its dependency on China, which produces more than 95% of the world's rare earth elements, and address local shortages.

According to the US Geological Survey, there may be deposits of rare earths in 14 US states.

"The Critical Materials Institute will bring together the best and brightest research minds from universities, national laboratories and the private sector to find innovative technology solutions that will help us avoid a supply shortage that would threaten our clean energy industry as well as our security interests," he said in a statement.

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In an age where cell phones, car radios and fluorescent lighting reign supreme, the world starts to look a bit bare without the aid of rare earth materials to build many modern technologies.

“You wouldn’t have very much of anything,” said Alex King, director of U.S. Department of Energy Ames Laboratory.

King received a phone call on Tuesday informing him that Ames Laboratory had received part of a $120 million grant over a period of five years to fund the hiring of 60 personnel and purchasing of equipment to advance research in the area of rare earth materials.

The grant is part of the U.S. Department of Energy Hubs, or a large series of projects to ensure sustainable energy in the future, announced to the public on Wednesday.

The funding will add an additional 20 percent to U.S. Department of Energy Ames Laboratory’s $40 million annual budget, with King estimating receiving about $8 million a year over the five-year period. With the funding of the Critical Materials Institute, a virtual institute collaborating between several national labs and universities, King is hoping to have an impact on the rare earths industry, saying the institute will be “ready to hit the ground running on day one.”

“We’ve always done rare earth research at Ames Lab; we’re kind of rare earths central for the [United States] if not the world,” King said. “All the best rare earth specimens come from the Ames Lab; we purify them better than anybody else.”

The opportunity to gain federal money for rare earth research had been on King’s radar for two years. When the U.S. Department of Energy formally gave the funding opportunity announcement last spring, Ames Laboratory staff pulled together a 1,600-page proposal within a period of 90 days.

Bill McCallum, senior material scientist at U.S. Department of Energy Ames Laboratory and co-principal investigator of the grant, anticipated the funding announcement in a few more months.

“I didn’t expect to hear the announcement for quite some time yet,” McCallum said. “It was very pleasing and very surprising when we got the announcement.”

After the paperwork is filed, Ames Laboratory will begin the arduous task of what King describes as “starting up a $25 million dollar a year business from scratch.”

Nearly as important as hiring personnel is the purchasing and upgrading of research equipment. Brandt Jensen, assistant scientist at Ames Laboratory, stresses the importance of finding the right balance of materials to create rare earth products.

“The basic form of the magnet is three metals, so we have to carefully weigh them in the right ratio,” Jensen said. “It’s a long process. To get a magnet you first have to melt them all together ... but it’s not complete yet, the atoms aren’t in the right location on the atomic level.”

In order to create a rare earth magnet to fit in a simple earphone, the magnet needs to go through several processes and characterizations to make sure it is just right.

Producing alternatives to and conservative use of rare earth materials is just one side of Ames Laboratory’s research. A new field called the economic forecasting and life cycle management of materials will give a holistic view of how different materials are being used and when scientists can start expecting those materials to be scarce.

“What we’re looking for is trying to understand the supply and demand dynamics of the rare earths ... but also using the economic analysis to try and predict what other materials are going to go critical suddenly without our being ready for it,” King said. “Today we’re dealing with the rare earths; tomorrow we’ll be dealing with something else.”

The economic analysis will take into account the political atmosphere in which materials are being produced in addition to predicting which areas are more at risk for large scale natural disasters.

Although he hasn’t had much time to himself since the announcement, King is enjoying the atmosphere of excitement that has overtaken the Ames Laboratory staff.

“We were all very excited,” Jensen said. “There’s going to be a lot more research opportunity, there’s going to be staff we train with, it’s going to open up a lot of doors.”

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Chinese price manipulation has taken its toll on the U.S. economy

Rare earth metals are an increasingly integral part of everything from automobiles to television sets.  But the precious metals are tightly controlled by China, with an excess of 95 percent of current suplly coming from Chinese-owned mines and refineries.  The degree of control has allowed China to manipulate prices, cutting back on demand to sell less material for the same amount of profit, any businessperson's dream.

I. New Private-Public Partnership Sets Aim on Chinese Mineral Hegemony

The problem is that it takes several years or more to bring rare earth metal mines and refineries online; and the capital costs of such facilities are very high.  It took China decades of clever planning to set itself in its current peachy position of rare earth hegemony.  Now the U.S. is racing to try to recover, before Chinese price manipulation deals too much of a blow to the U.S. economy.

The U.S. Department of Energy has committed a relatively large investment of $120M USD to establish an Energy Innovation Hub under the supervision of Ames Labs to research ways to expand domestic rare earth production and otherwise cut reliance on Chinese rare earth supplies.

The new lab, dubbed the Critical Materials Institute (CMI), will be a joint effort between a number of large domestic firms in the private sector, universities, and top government research labs. 

Corporate partners include General Electric Comp. (GE), OLI Systems Inc., Spintek Filtration, Advanced Recovery, Inc., Cytec Industries, Inc. (CYT), Molycorp Inc. (MCP), and Simbol, Inc. (Simbol Minerals).

II. Attacking the Problem From All Angles

Among the research projects will be:

    Improve rare earth recycling/reuse
    Improve extraction processes
    Develop rapid deployment mining techniques
    Develop rare earth material substitutes
    Study and optimize supply chains to minimize waste

Top targets for domestic rare earth production include neodymium -- used in neodymium iron boron (NeFeB) hard drive magnets and cell phone components -- and samarium -- used in samarium cobalt (SmCo) drive magnets.  Currently the U.S. has no domestic neodymium producers and only one domestic samarium producer.

The Government Accountability Office (GAO) in a 2011 research report [PDF] suggests that the U.S. rare earth supply chain, phased out in the 1980s at a time when the 17-element family looked non-critical, will take approximately 15 years to rebuild.  The new lab aims to assist in that slow and arduous recovery.

The U.S. also will continue to purse action against China before the World Trade Organization (WTO) where it has filed complaints about the Chinese price manipulation.

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Released date - January 10, 2013 - A fund for one of the more exotic mining bets the average investor can make is falling Thursday, keying off a big loss by a single stock.

Market Vectors Rare Earth/Strategic Metals ETF (REMX)  is down by one percent. Rare earths are tough-to-mine metals with a number of high-tech uses, including in cell phones and semiconductors. One of the fund’s components, Molycorp (MCP), said it “anticipates lower than expected revenue and cash flow for 2013, and is evaluating its capital needs for 2013.” Shares of that company are plunging 22% this afternoon.

Molycorp makes up about six percent of the rare-earth fund. Thompson Creek Metals (TC), another firm with a 5.5% weighting in REMX, is down 1.2%.

Rare-earth metals’ importance in high-tech manufacturing hasn’t translated into stock-market success. The Market Vectors fund had an eleven percent 2012 loss that was preceded by an even bigger tumble — 32% — the year before.

Molycorp’s stock woes exemplify the trend. The stock dipped near $8 this morning, a level it hasn’t seen since November. The longer trend exaggerates it: The stock traded close to $80 after its late 2010 initial public offering.

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JAPAN will launch a survey of its Pacific seabed in the hope of finding rare earth deposits large enough to supply its high-tech industries and reduce its dependence on China.

Researchers from the Japan Agency for Marine-Earth Science and Technology will start the probe from January 21 on the seabed near Minamitorishima island, some 2000 km southeast of Tokyo, he said.

Finding large-scale proven reserves inside Japan's exclusive economic zone would be a boost to Japanese industry, which currently relies on imports from China.

These imports have in the past fallen victim to the delicate political relationship between the two countries, notably in 2010, when manufacturers complained supply was being squeezed during a spat over disputed islands.

The row, over a Tokyo-controlled archipelago known as the Senkakus that Beijing claims as the Diaoyus, has flared anew in recent months.

The survey will follow an earlier finding by Tokyo University professor Yasuhiro Kato, who took mud samples from an area.

He said these indicated deposits amounted to around 6.8 million tonnes of the valuable minerals, or 220 times the average annual amount used by industry in Japan.

Rare earths are used to make a wide range of high tech products, including powerful magnets, batteries, LED lights, electric cars, lasers, wind turbines and missiles.

China produces more than 90 percent of the world's supply of rare earths, but has clamped down on exports of them in a move Beijing says is aimed at protecting its environment and conserving supplies.

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The United States Department of Energy has granted $120 million toward the creation of the Critical Materials Institute (CMI), which will be responsible for developing new methods of rare earth element production and management.

The CMI, led by Ames Laboratory and includes over a dozen research partners, hopes to create technology to avoid supply shortages while also reducing rare earth dependency on China. According to a report by Bloomberg, China provides about 95 percent of the world's rare earth shipments, and recently decreased production limits to conserve the environment and keep their supply in check. The CMI will focus on diversifying the supply of rare earths, develop substitute materials, and improve methods of reusing and recycling materials.

Rare earths include a group of 17 similarly structured elements that are used in the production of phones, disk drives, televisions, and other consumer products, and can also be used to manufacture wind turbines, electric vehicles, and advanced batteries.

Dependency on the import of rare earths is the result of insufficient technology and manufacturing facilities, as opposed to lack of raw material — the Mountain Pass mine in California, for example, has one of the largest deposits outside of China. The CMI will help discover new and more efficient ways to tap into the resources, while also decreasing the use of materials that can potentially have supply shortages in the future.

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An official with the Japan Agency for Marine-Earth Science and Technology has said that researchers are preparing to start a new survey for valuable deposits of rare earth minerals in the country’s Pacific seabed. The search is scheduled to begin on January 21st, and will see them probing roughly 2,000 kilometers (1,250 miles) southeast of Tokyo, near the small island of Minamitorishima. A successful find of minerals will help Japan to reduce its reliance on China within the high-tech manufacturing industries.

This will actually be the second survey of the area, following last summer’s findings of a 6.8 million ton deposit of rare earths by University of Tokyo professor Yasuhiro Kato. Should that turn out to be accurate, it would be enough minerals to supply Japan’s consumer electronics and hybrid car engine needs for more than 220 years. This deposit is the first to be found within Japan’s exclusive economic zone, a huge benefit for the island nation that currently can only rely in imports.

As over 90% of the world’s supply of rare earths comes from China, the push for Japan to reduce its reliance stems greatly from the ongoing diplomatic tensions over a group of disputed islands. Politics have often gotten in the way of Japan’s supply from China, most notably in 2010 when the Beijing government briefly suspended all shipments. Similar action was threatened again shortly after the eruption of anti-Japanese protests in China in mid-September.

While China claims it has increased its restrictions on rare earth exports, not just to Japan, but to the international community as well, because of environmental concerns. Tired of the tight squeeze, Japan has been joined by the U.S. and European Union in filing a complaint over unfair practices with the World Trade Organization (WTO). Several other countries which are believed to have their own mineral deposits, including Vietnam, are eager to cooperate with Japan, which supplies the financing and processing technology, so both can benefit without having to deal with China.

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The US Department of Energy has funded a $120m research center to address shortages in rare earth metals and other materials critical for US energy security.

Ames Laboratory in Iowa will lead a team of researchers at the new Critical Materials Institute (CMI).

“Rare earth metals and other critical materials are essential to manufacturing wind turbines, electric vehicles, advanced batteries and a host of other products that are essential to America’s energy and national security,” said assistant secretary for energy efficiency and renewable energy David Danielson.

“The Critical Materials Institute will bring together the best and brightest research minds from universities, national laboratories and the private sector to find innovative technology solutions that will help us avoid a supply shortage that would threaten our clean energy industry as well as our security interests.

The department’s 2011 Critical Materials Strategy reported that supply challenges for five rare earth metals (dysprosium, terbium, europium, neodymium, and yttrium) may affect clean energy technology deployment in the coming years.

In recent years, DOE and others have scaled up work to address these challenges. Among the recent investments, DOE’s Advanced Research Projects Agency–Energy and Office of Energy Efficiency and Renewable Energy have supported more than $40m in magnet, motor and generator research.

Other national labs partnering with Ames include Idaho National Laboratory, Lawrence Livermore National Laborator, and Oak Ridge National Laboratory. University and research partners include Brown University, the Colorado School of Mines, Purdue University, Rutgers University, University of California-Davis, Iowa State University and Florida Industrial and Phosphate Research Institute.

Industry partners that have joined to help advance CMI developed technologies include General Electric, OLI Systems, SpinTek Filtration, Advanced Recovery, Cytec, Molycorp and Simbol Materials.

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Last July, the WTO opened an investigation into whether China is unfairly restricting the export of rare earth metals - the substances vital not only to your iPod and smartphone, but also to so many other important things, from missiles to cars to wind turbines to light bulbs.

So how has China responded?

In the quiet of the Western world’s Christmas holiday, it blew a raspberry, tightening export restrictions once again.

“China, the world’s biggest rare earths supplier, cut the first-batch export quota for next year by 27 percent as overseas demand for the elements waned,” Bloomberg News reported in the Taipei Times on Dec. 29.

China’s Ministry of Commerce sets rare earth export limits twice a year. It pegged the first allotment for 2013 at 15,501 tonnes, down from 21,226 tonnes for 2012’s first setting.

To be fair, China had loosened restrictions last August, soon after the WTO began its investigation after the U.S., European Union and Japan complained about Chinese limits and tariffs on the metals. The 9,700 tonnes that China allowed in 2012’s second half brought the full-year limit to a three-year high of 30,996 tonnes, Bloomberg noted.

RARE DOMINANCE

For historical reasons including a disregard for environmental concerns in toxic rare earth mining and processing procedures, China controls about 95 percent of the world’s rare earth market.

Change is afoot in the industry. As Bloomberg noted, one of the reasons China curtailed exports is that worldwide demand has dropped off. You can probably attribute that to the sluggish global economy. Also, companies in Japan and elsewhere are finding ways to reduce their reliance on rare earths. And Western companies like Molycorp in the U.S. have started up rare earth operations, although Molycorp has faced criticism for selling to China rather than to the U.S.

With demand down, prices have fallen. China is not only limiting exports, but it has also limited production - all of which should choke supply and in the rules of supply and demand, help lift prices.

China has also started a massive consolidation of its rare earth industry, led by Baotou Steel Rare-Earth. It says it is doing this for among other reasons, to assert more control over cleaner industrial practices. With China’s central planning prowess, it should also give it greater ability to control the global market that it already dominates.

This year will be a busy one for rare earth developments in China and internationally. Rare earths are of double importance to the economy, not only for their direct use in products, but also because they occur in minerals that  contain thorium and uranium, two nuclear fuels that could help move the world off of CO2- emitting hydrocarbons.

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