Rare Metals and Electro-States
- Tarık Uçar
- 16 Ağu
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Fatih Birol, the Executive Director of the International Energy Agency, stated the following in a 2021 speech:
"The data we have shows a discrepancy between the climate goals of the international community and the availability of critical minerals that are essential for realizing these goals."
The critical minerals Fatih Birol mentioned were rare earth metals. Rare earth metals are a group of 17 elements on the periodic table, comprising 15 lanthanides along with scandium and yttrium.
As these metals are sparsely distributed throughout the Earth's crust globally, the number of economically viable minable deposits is quite low. This is precisely where the adjective 'rare' comes from.
The advancement of technology, which has diversified the tools we use and embedded them into every aspect of our daily lives, has also led to an increase in the variety of metals we require. While humanity utilized only seven types of metals between Antiquity and the Renaissance, this number rose to ten in the 20th century. In light of the technological developments that began to accelerate in the 1970s, around twenty different metals came into use. Today, however, we utilize almost all of the 86 metals on the periodic table, including the rare ones.
Today, a large majority of the rare earth metals produced worldwide goes into magnet production. The reason is simple: between two magnets of the same power, the one made of rare earth metals is 100 times smaller than a traditional ferrite magnet. This paves the way for the miniaturization of virtually everything. Just think back—do you remember the size of your very first mobile phone?
The function of rare metals is to miniaturize objects.
The more we increase our mobility, the faster we can travel and conduct trade, generating that much more work for the machines in our factories. For these machines to operate optimally, however, we must secure abundant and affordable energy sources. This is the only way we can achieve our economic growth targets. That is why, from the first Industrial Revolution to the present day, we have relentlessly pursued the production of motors that are increasingly efficient in terms of size, power, and cost. And this is precisely where more powerful and smaller magnets come into play...
What the piston was to the steam engines that triggered the Industrial Revolution in 1763 and the gasoline engines that followed, the magnet is to electric motors.
The European Parliament has mandated automakers that, starting in 2035, 100% of the vehicles sold on the European continent must be electric. It seems impossible to manufacture these vehicles, whose motors and batteries contain magnets made from rare earth metals, without tapping into new mineral resources. For the European Parliament to achieve its 2035 targets, 400 new mines must be opened solely for electric vehicle batteries alone, alongside the establishment of 50 battery factories across Europe.
Another major agenda item of our time is the green revolution and renewable energy.
Today, approximately one-third of the electricity we consume globally is generated from renewable energy sources. The goal is to raise this share to over 45% by 2030. These figures come from the International Energy Agency. According to the projections of the very same institution, by 2040, our consumption of rare earth metals will increase 7-fold, nickel 19-fold, cobalt 21-fold, graphite 25-fold, and lithium 42-fold. This is because these energies—dubbed 'renewable' and 'clean' as they harness resources we can utilize endlessly—ultimately depend on the processing of rare earth metals, which are non-renewable and whose extraction conditions are hardly considered clean.
So, if the green revolution and digitalization are driving up the consumption of rare metals, yet the extraction and processing of these ores is a dirty business; how, then, will the green transition take place?
Former Stellantis CEO Carlos Tavares: "If we are being instructed to produce electric vehicles, authorities must assume the scientific responsibility for this. Because I would not want someone to come along 30 years from now and discover that things did not go as well as promised regarding battery recycling, the use of the planet's rare materials, or the electromagnetic emissions generated by batteries during recharging."
Over recent decades, almost the entire extractive industry has gradually shifted from the West to the South. Europe, which accounted for more than 60% of global mineral production in the mid-19th century, represents a mere 3% today. Economist Lawrence Summers, who also served as the U.S. Secretary of the Treasury, once even proposed that developed economies should export their polluting industries to poorer countries, particularly to sparsely populated nations in Africa.
Since opening new mines in Europe would bring about new environmental issues, it is thought that European mining companies might shift their mining operations to economically underdeveloped regions of the world that care less about the environment.
So, where might the term 'rare metals war' come from? Today, rare earth metals are present, albeit in small amounts, in all our smartphones, tablets, computers, televisions, and headphones, in nearly all small household appliances, in our cars, and in our energy generation infrastructures—in short, in all the marvels of technology we use. The problem, however, is that the vast majority of these resources are in the hands of China, and naturally, it has a tendency to exploit this situation...
The global rare earth metals market stands at a paltry $10 billion—a laughable amount, making it 220 times smaller than the global oil market. However, when we consider that these tiny metals are present in almost everything we consume, the impacts of this small industry can reach alarming proportions. In other words, whoever controls the ores ultimately controls the industry itself.
Today, China is the largest global producer of 33 of the 53 mineral resources essential for economies, accounting for more than 50% of the global production for most of them. Furthermore, it single-handedly shoulders 92% of the world's magnet production.
Naturally, China wants to make the most of this resource advantage it holds. How so? The French sell wine, not grapes, right? Well, the Chinese view rare metals much like vineyards.
First, by either incentivizing or coercing foreign industrialists onto its soil, China forged partnerships with them through joint ventures. Subsequently, through the joint innovation processes it initiated, it acquired the technologies of Japanese and American super magnet manufacturers. The concentration of magnet factories in China accelerated the relocation of magnet-reliant industries—which essentially means nearly all tech product manufacturers—to China as well. Now capable of producing a vast array of technological goods ranging from wind turbines to electric vehicles, China has effectively caused a geographic shift in the global value chain.
To illustrate the sheer scale of China's monopoly in the rare metals sector, let us look at a more striking example. In 1973, the US banned the procurement of specialty metals from foreign suppliers for use in the defense industry. Fast forward to the 1990s, when the American defense contractor Lockheed Martin set out to develop the fifth-generation F-35 fighter jet. Costing $412 billion, this stealth aircraft project would become the most expensive program in the history of the US military. However, in 2012, it was discovered that the rare earth magnets used in the aircraft's radars and IT systems were not manufactured in the US, but rather by a Chinese company, ChengDu Magnetic. As it turned out, a supplier had bypassed American regulations to sell these magnets. The Pentagon was alerted, and the situation proved highly complex: waiting for an American manufacturer to supply these magnets would severely delay the program; on the other hand, China could potentially have embedded spyware into this $400 billion program by selling a few magnets worth a mere $2 apiece. The US could find no viable solution. Through a special waiver, ChengDu Magnetic was exempted from the 1973 law and became an official super magnet supplier for the F-35 project. It became glaringly obvious that the US simply could not do without Chinese magnets.
Great Britain dominated the 19th century through its hegemony over global coal production; much of the 20th century can be understood through the lens of the oil production partnership between the United States and Saudi Arabia; and in the 21st century, a single state is poised to build its dominance upon the export and consumption of rare earth metals. That state is China. But, of course, this comes at a steep price... Today, more than 10% of China's arable land is contaminated with heavy metals, while 80% of its groundwater is no longer safe to drink.
So, has the world surrendered to China in the rare metals war? Or is there still a way to level the playing field?
For the West today, the goal is to leapfrog a generation of technology and strip China of its competitive advantage by utilizing new raw materials that offer more compelling physical properties than lithium, cobalt, and nickel. Currently, most batteries are of the NMC (nickel-manganese-cobalt) type, but a rival technology known as LFP (lithium-iron-phosphate) is also gaining ground.
German companies Valeo and Mahle are attempting to free electric vehicles from rare earth magnets by developing a magnet-free axle design.
Japan, where 5 million mobile phones are discarded annually, realized ahead of the rest of the world that electronic waste is exceptionally rich in rare earth metals. Each of these phones contains rare metals, even if it is merely a tenth of a gram. The Japanese are pressing on with their research to reclaim this treasure, which currently remains economically unfeasible to recover.
In summary, let us not overlook the fact that to achieve greener heating or drive cleaner vehicles, we must, for now, dig deeper. The world's shift away from fossil fuels does not reduce geopolitical tensions as widely assumed; it merely redirects them.
At the end of the day, rare metals are metals of crisis, and the best energy is the energy we do not consume.
Bibliography
[1] The Rare Metals War: The Dark Side of Clean Energy and Digital Technologies, Guillaume Pitron, 2024.
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