World-class rare earth mine discovered in Turkey

International Business News  –  On June 28, local time, the Turkish government announced that a huge amount of rare earth resources had been discovered in the Beylikova area of the country’s western Eskisehir province. According to local media reports, the country’s Minister of Energy and Natural Resources Fatih Dunmez said that the newly discovered mining area contains 694 million tons of rare earth elements. If true, Turkey’s rare earth reserves will jump to the second largest in the world, after China.

However, as of now, it is still unknown what types and which rare earth elements the newly discovered rare earth mineral resources in Turkey contain. Moreover, the number of 694 million tons refers to rare earth oxides that exist in nature. From rare earth oxides to rare earths that can be widely used in modern industry, a refining process is still required.

Therefore, analysts believe that the newly discovered rare earth resources in Turkey will not shake China’s rare earth market position at least in the short term. This is because the mining and refining of rare earths are very difficult and costly, and an industrial chain needs to be established.

In addition to having rich mineral deposits, China has mastered all the key technologies for rare earth processing and production after years of construction, and has formed a complete rare earth mining and refining industry chain. At present, China is the country with the strongest rare earth production and supply capacity in the world, accounting for more than 70% of the global market.

In fact, not only Turkey, but also the United States and Australia have large reserves of rare earth mines, but it has not changed the pattern of China’s dominance of rare earth in the world. In addition to the above-mentioned reasons for the industrial chain, the refining process of rare earths is also highly polluting and costly to the environment. Therefore, although many countries have rare earth resources, they are reluctant to develop them.

Rare metals are needed in the production of automobiles, wind turbines and electronic equipment

It would be nice if it could be stuck like that

Therefore, the United States, the world’s largest industrial power, has always been highly dependent on China in the field of rare earths. Until 2022, against the backdrop of waning political mutual trust between China and the United States, the United States has introduced a legislative proposal aimed at forcing defense contractors to stop buying rare earths from China by 2026 and instead use the mineral reserves built by the Pentagon.

Japan also relies to a considerable extent on Chinese rare earths

It is also seeking strategic risk sharing, But this is essentially giving up the near and pursuing the far

Unevenly distributed rare earths

Rare earth is a general term for a total of 17 metal elements. It includes Lanthanide (La), Cerium (Ce), Praseodymium (Pr), Neodymium (Nd), Promethium (Pm), Samarium (Sm), Europium (Eu), Gadolinium (Gd), Terbium (Tb), dysprosium (Dy), holmium (Ho), erbium (Er), thulium (Tm), ytterbium (Yb), lutetium (Lu), plus their congeners scandium (Sc) and yttrium (Y).

in the periodic table of elements

Elements with the same number of outermost electrons will have similar physical and chemical properties

Rare earths have unique physical and chemical properties and make important contributions in modern industry. It has been widely used in new energy, new materials, energy saving and environmental protection, aerospace, electronic information and other fields.

The destination and proportion of rare earth terminal applications

To be more specific, rare earths are actually used in our daily lives. Rare earths are needed from mobile phones, computer hard drives, electric car motors, and MRI machines in hospitals. These minerals can also be found in key components such as catalysts, permanent magnets and metal alloys, affecting our daily lives.

Rubidium magnets, for example, are found in many industrial manufactured parts

With it, some of the original metal physical properties can be improved

Rare earths are also needed in areas such as driverless vehicles, clean energy and communication systems, which are seen as future economic growth points. For example, a wind power generator with an installed capacity of 1 MW requires about 171 kilograms of rare earths.

In the military field, they are widely used in precision-guided weapons, satellites and stealth technology. An American F-35 fighter jet needs about 427 kilograms of rare earths, and a Virginia-class nuclear submarine consumes up to 4.2 tons of rare earths. At present, the world’s three major military companies, Raytheon, Lockheed Martin Corp and BAE Systems, are all inseparable from rare earth materials.

The more sophisticated equipment, the greater the demand for rare earths

It can make devices lighter, faster and stronger

Rare earths are strategic materials for countries interested in developing into world powers. Ensuring a stable and reliable supply of rare earths is the basis for stable economic and military development in the future.

Whether it is Chinese or English, the name of rare earth has the word “rare” in it. In fact, the total amount of rare earths in the earth’s crust is not a lot, but these elements are usually distributed in a relatively scattered, low abundance, and there are very few areas where the grade is high enough to be exploited. Moreover, rare earth elements in nature are usually not single, but mixed together. Such properties make rare earth exploration, mining, and smelting difficult and costly.

The abundance of rare earth elements in mineral deposits is usually less than 5% by mass

Mining alone does not cover the cost and is usually mined together with its associated minerals

Therefore, the world’s proven rare earth mines are concentrated in a few countries. China ranks first with about 44 million tons; Vietnam and Brazil are tied for second with 22 million tons; Russia has total reserves of 12 million tons; India ranks fifth with about 6.9 million tons. The United States, as a major consumer of rare earths, ranks seventh with reserves of 1.8 million tons. However, due to various reasons, the update of the above data is not timely and can only be used as a reference. There may be cases where the reserves have been dug for several years, but the published reserves have not decreased.

The distribution of rare earths in the world, China is the best

In 2021, a total of 280,000 tons of rare earths have been mined in the world. China’s rare earth output is as high as 168,000 tons, an order of magnitude higher than other countries. The second-ranked United States is only 43,000 tons. This situation has gradually formed in the history of recent decades.

Actively selected dependencies

The mining and smelting of rare earths are capital- and technology-intensive industries, and their commercial refining and large-scale application have actually only appeared in recent decades. In addition, its application scenarios are more common in high-tech industries and military industries. Therefore, unlike oil and iron ore, the production of rare earths has always been monopolized by big countries.

In addition, and for the reasons mentioned above, it is not economical to mine rare earths alone

Small countries do not have the economic and technological strength to mine their own rare earth mines on a large scale.

Until 1985, the United States was the world’s largest producer of rare earths. However, due to the extremely low grade of rare earth ore, the traditional heap leaching and pool leaching process produces about 2,000 tons of tailings per ton of rare earth oxides produced. The production process is energy-intensive, and improper handling can lead to air, water and soil pollution.

The vast majority of the world’s rare earths are mined even outside of China

It will also be shipped to China for processing, enrichment and purification.

Therefore, when China’s mining and smelting business gradually matured, Western countries once hoped to rely on imported Chinese rare earths to meet domestic demand. Technological progress has driven the rising international demand for rare earths. Facing a broad market prospect, China’s rare earth industry continues to increase its output and make technological progress. By the 2010s, China had grown into the world’s largest producer, application and exporter of rare earths.

The world’s rare earths look at China, and China’s rare earths are in Obo

In 2010, the Diaoyu Islands incident cooled Sino-Japanese relations. Since then, Japan has sought more diversified sources of rare earth imports and increased the production of rare earth resources in other countries.

Australia has since become an important supplier of rare earths to Japan. In addition, Japan has also begun to explore the recovery of rare earth resources on the island, and achieved certain results. Today, including Japan, the world’s dependence on China’s rare earths has dropped from 90% to less than 60%.

Combined with the dependence of the world’s major countries on China’s rare earths

And the change trend of global rare earth mining volume can be seen

Countries around the world are intentionally increasing their rare earth strategic autonomy

However, under the data, there are still many smuggling transactions that cannot be counted.

During the same period, China also realized that the extensive development of the rare earth industry needs to change. China has met 90% of the global demand, and it has indeed allowed China to establish a very comprehensive rare earth industry and have a high right to speak. But these achievements have come at a huge environmental cost, shrinking rare earth reserves and unreasonably low prices. China has issued a white paper to combat smuggling and promote the standardized development of the industry. The price of rare earths has also started to recover towards its value.

Take advantage of price advantage to occupy the global market, but also pay a high environmental price

China’s rare earth industry is also seeking a way out between profit-seeking and a healthy development model

In fact, even from 2016 to 2019, under Trump, 80% of rare earth compounds in the United States still came from China. In 2018, only rare earth magnets cost the United States $250 million in imports from China.

Although the trade dispute was sharp at the time, rare earths were not included in the list of goods that the United States would increase tariffs on. Because the high-tech industry in the United States relies on the supply of rare earths, and the supply of rare earths in the United States depends on China. It can be said that rare earth resources are enough to affect Sino-US relations and are the glue between the two countries and a trump card in the hands of China.

And a trump card, if China bans rare earth exports to the US

The U.S. simply cannot find an alternative supplier in the short term

At present, only the rare earth mine in Mountain Pass, California is still in production in the United States, so it is highly valued by people in the relevant fields of the United States. It has the world’s seventh-largest reserves and is currently the world’s second-largest supplier of rare earths. Even in 2020, when COVID-19 hit hardest, it produced 15%of the world’s rare earths.

Mount pass rare earth mine is the only rare earth mine in production in the United States

But the rare earth types are light rare earths

However,  Chinese company owns a 7.7% stake in MP Materials, the mine’s ownerDue to the U.S. reliance on imported rare earths in recent years and related supply chain disruptions, the mine’s technical reserves are highly dependent on China. And because the United States has no separation facilities, thousands of tons of concentrated rare earths need to be shipped to China for further processing every year. The current dependence of the United States on China’s rare earth can be seen.

Because rare earth contains a variety of elements, the processing steps are also cumbersome

Attempts to get rid of dependencies

As major countries have introduced their own carbon neutrality schedules, electric vehicles and energy storage devices have pushed up the international community’s demand for rare earths, and the importance of rare earths has become increasingly prominent.

At the same time, Sino-US relations have not developed smoothly in recent years, and the West has always shown a skeptical and suspicious attitude towards China. The West is not unaware of the status quo of relying on China’s rare earths. Driven by insecurity, they have taken various actions.

Lynas Australia has signed a contract with the US Pentagon –

Established a large-scale rare earth processing and separation industry in Texas, USA

The initial funding was all provided by the Pentagon

Several US military giants have jointly warned the White House that the US high-tech and military industries are heavily dependent on the rare earth industry of “strategic competitors”. The U.S. government restricts the other party’s access to American chips, and the other party can find alternatives. However, the United States can not find a substitute for rare earths, which will even lead to paralysis of the high-tech and military industries.

Apple alone imports 600 tons of rare earths from China every year

Without rare earths, even its most profitable iPhone cannot be produced

In fact, China has never used rare earths as a weapon. The U.S. military giants may be saving others by themselves, leading to a strong sense of urgency. However, judging from the current U.S. policy, there are many high-level people who hold the same views as the arms giants. This view is even more influential.

In early April 2021, the Biden administration began reviewing supply chains including semiconductors, high-capacity batteries, medical supplies and rare earths because of chip shortages. Rare earths are defined together with the above industries as a key industry supply chain. Japan, the United States, Australia, and India hope to strengthen cooperation in rare earths to make supply more stable.

Four countries happen to be members of the U.S. Indo-Pacific Strategic Organization QUAD

MP Materials, a company suspected of having a Chinese background, encountered various troubles in 2020, and the original subsidies were also postponed. At the same time, the United States plans to have local companies develop more rare earth mines and revitalize the rare earth industry chain in the United States.

For example, the USA Rare Earth LLC project at the Round Top Mountain deposit in Texas is expected to be operational in 2023. The company that developed the mine has also established a major rare earths processing facility in Colorado. Once completed, the United States will regain the ability to process rare earths, and the shipment of concentrated rare earths to China for processing may become a thing of the past.

Although China’s rare earths are no longer the dominant power that once reached 98% of global production

But China’s rare earth processing still undertakes 88% of the world’s orders

Western countries have also looked overseas. Not only have the production of rare earths in Australia, Vietnam, and Brazil soared, but even Greenland, often regarded as the end of the world, has become an alternative to the sources of rare earths in Western countries. There are currently 41 mining companies in Greenland, two-thirds of which are linked to the UK, Canada and Australia.

China’s huge rare earth reserves, mature rare earth industry chain and relatively low-priced finished product supply determine that it is impossible for the West to completely decouple from China’s rare earth. Even if it is hoped to reduce dependence through other sources of rare earths, it must not be achieved overnight.

Based on the rigid demand for rare earths, the world’s dependence on China is from the inside out

However, the West’s desire to no longer rely on China’s rare earths, especially the desire to decouple the defense sector from China’s rare earths, has revealed some signs and deserves long-term attention.