Rare Earth Independence in Europe and US Faces Cost and Environmental Barriers

The US and Europe will face obstacles in their efforts to expand the domestic supply of rare earth for electric vehicles and wind turbines, as well as reduce their dependence on foreign-imports as high costs and environmental concerns. According to MiningWeekly citing Bloomberg News.

Members of both parties in the US Congress jointly submitted a bill to reduce foreign rare earth dependence, which is similar to a bill proposed by Senator Ted Cruz in May. Subsequently, the European Union also proposed to reduce its dependence on imports of raw materials and claimed to establish a raw material alliance before the end of the year in view of its importance in industrial development. The analysis believes that raw material acquisition costs and environmental concerns may be the biggest obstacle to achieving supply chain independence in Europe and the United States.

Jennifer Bisceglie, CEO of Interos, a supply chain risk management company, believes, "Achieving the sustainability of the supply chain is very difficult and expensive. If you want to build an entire local supply chain, you need a lot of investment in training. If the raw materials are not in the country, they need to buy from other countries." She believes that large multinational companies are highly dependent on small suppliers. These small suppliers need to obtain a local supply of raw materials, which may not be available elsewhere.

REEs are the 15 lanthanide elements on the periodic table plus two other related elements, scandium and yttrium have become an integral part of modern life. More than 90 per cent of hybrid and electric vehicles use rare earth-based magnets in their motors, while each F-35 fighter jet requires 420lb of rare earths materials. In 2019, more than 80% of the supply in the US needs to be imported from Asia. President Trump ordered the U.S. Department of Defense to expand the production of rare earth magnets.

Despite their name, rare earths are relatively abundant. But they tend to be widely dispersed, making them difficult to mine profitably. The process of separating them into commercially viable products also poses technical and environmental challenges, which have caused many new entrants to struggle.

The bills submitted by the U.S. House of Representatives and Senate include tax incentives aimed at improving the competitiveness of domestic industries in the United States. In addition, for some countries, it takes time to establish a domestic technology and equipment system, and mineral exploration and development also face environmental obstacles, which may cause serious environmental damage. The United States is rich in rare earth resources, but the cost, including manpower and energy, is high.

The introduction of the European raw material self-sufficiency plan was mainly because some organizations criticized too much attention to mining but not recycling. Although Europe and the US officials expressed their desire to end their dependence on imported raw materials, executives of rare earth companies believe that only a certain percentage is needed.

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