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"We are Entering the Rare Metal Age"

By Irene Pedruelo, David S. Abraham | April 6, 2016

CREDIT: NG.

This interview has been edited for brevity and clarity.

When most of us think about smartphones, hybrid cars, and other new technologies, we are in awe of the vision and sophisticated skills it took to create them. But we often fail to realize that they all depend on rare metals few of us have even heard of. We talked with David Abraham, director of the Technology, Rare and Electronic Materials Center, about what this increasing dependency means for our future.

IRENE PEDRUELO: Your book, The Elements of Power, focuses on a set of rare metals that most of us have really not heard much about. What are rare metals?

DAVID ABRAHAM: Rare metals are metals that are produced in very limited quantities compared to copper or iron. We all think of and know of copper or iron because they are almost everywhere and are produced in the millions of tons annually. But most of these metals that I talk about as rare are produced in the hundreds or thousands of tons annually. They are used in very small amounts—grams or less than a gram in certain high-tech goods. It's best to think of them more like yeast in pizza. When you think about pizza, you think about possibly the cheese or the tomato sauce. Very rarely will you think about the yeast. But yeast is a critical component, and if you don't have yeast, you don't have pizza. If you don't have neodymium, then you don't have a speaker for your phone. Europium, for example, is the metal in your phone that allows the color red to show. Terbium allows the color green to show. Dysprosium and neodymium are in magnets that allow your phone to vibrate. Rare metals often focus on very specific functions.

IRENE PEDRUELO: If rare metals are rarely used in quantities that are very large, what does that mean for how they are mined?

DAVID ABRAHAM: When I was growing up, when I would think about metals, I would think someone was going out West in the 1840s and they were digging and they were trying to find gold, and they would find these little nuggets in the ground. But tellurium and selenium and many other rare metals are not mined for themselves; they are often a byproduct of producing a larger metal, like zinc or copper. And that is an important thing to understand.

IRENE PEDRUELO: Rare metals have permeated our lives to an incredible extent, but still, many associate them mostly with smartphones, forgetting many other products that are also dependent on them to function.

DAVID ABRAHAM: Everything uses rare metals, from Teslas to wind turbines. These metals have specific properties that become extremely valuable as our green technology forces things to be lighter and as our high-tech world forces things to be more portable. When the technology for mobile telephones came out in 1983—we remember those big bricks—we needed a battery that was strong enough that could last. Everything has gotten smaller since then, in part, because of the secrets of these ingredients, these minor metals. That's why the iPhone itself has been actually able to be created.

IRENE PEDRUELO: What are the elements that are helping to make things lighter?

DAVID ABRAHAM: Niobium, for example, is a steel strengthener and it's also used to reduce the amount of steel that is necessary. If you were going to build the Eiffel Tower today, it would only need 2,000 tons of steel. In the past it needed 7,000 tons. So you're reducing the amount of material needed, and therefore you are making it lighter.

IRENE PEDRUELO: Back in 2010 you were living in Japan. What triggered your interest in rare metals?

DAVID ABRAHAM: I was working in Japan's Ministry of Economy, Trade, and Industry, and was researching the trade in resources. At the time, China had cut rare earth access to Japan. I didn't know what rare earths were. I just knew they were some type of important material. A lot of these rare earths are used in magnets that make our products more energy-efficient. As Japan produces a lot of components for electronics, they were very concerned about their supply.

IRENE PEDRUELO: Who are the main players in terms of production of these rare metals?

DAVID ABRAHAM: In terms of the production of a lot of these rare metals, you are talking about China. In terms of consumption of a lot of these materials, you are also talking about China. Supply concerns are large because it doesn't take very much production to dominate the market. Certain mines in China produce 90 percent of the rare earths. The same thing with antimony, with indium, etc. All of these metals are used in very specific components, and their production is dominated by certain countries. That can create concerns because of geopolitical concerns, actual fighting, or natural disasters that can strike. So there are a number of reasons why you don't want all your resources to come from one place.

IRENE PEDRUELO: China has a plan called "Made in China 2025" where it outlines the path to a deep upgrade of the manufacturing industry. What could that mean for the rare metal industry?

DAVID ABRAHAM: China imports somewhere in the range of 75 percent of all the components they use in products. (That number is a little bit loose.) They produce a lot of materials and end products—the iPhones are assembled with Foxconn—but a lot of the components are made elsewhere. Japan, for instance, makes the larger, more technical components and sends them back to China. China's goal by 2025 is to flip that on its head so they are only relying on imports for 25 percent. If they are able to make this happen, that has a major implication not only for component manufacturers who are overseas, but also for resource supply lines.

IRENE PEDRUELO: What other key vendors are there?

DAVID ABRAHAM: We're talking about over 50 elements. You have cobalt in Congo. You have beryllium in the United States. You have lithium in Chile. You have niobium in Brazil—85 percent of the world's niobium comes from one mine in Araxá, Brazil. It is one thing to understand where the materials are found in the ground. The other important thing is where they are processed. Oftentimes that is the more challenging aspect of the supply line. I think we lose sight of that, because we think "if it's just in the ground, then anyone can access it." But we miss a lot of the challenge, in terms of ensuring the right resource gets to the right place at the right time at the right environmental and economic cost.

IRENE PEDRUELO: Why is it that important to know where it's processed?

DAVID ABRAHAM: We are not so good at always getting the material out of the mineral. Rare earths are found in over 100 minerals, but we are only very good at getting them from just a few. We don't fully appreciate how challenging the processing of these materials is. And oftentimes it can be toxic or radioactive, so even if you have it in the ground, some regulations in countries won't let you process it.

IRENE PEDRUELO: Is there a lot of investment being put into research to improve the extraction of rare metals from minerals and make it more efficient?

DAVID ABRAHAM: Commodity prices are low, so there is not a lot of private sector investment; and the public sector is not focused on extracting resources more efficiently. Oftentimes, you have governments trying to focus on how we use less or how we switch away from them. It is unfortunate to see countries and companies not focusing on how we find ways to process these materials more efficiently. For example, titanium is a rare metal to some degree, but it's one of the most common elements on the planet. Titanium is only used sparingly because it's environmentally taxing to produce and it's very expensive; but it is very light and very strong. If we can find ways to process this material more quickly, it would negate the use of steel in many applications. The world would be transformed because it would use far less material and the material that we would be using would be far stronger.

IRENE PEDRUELO: Bill Gates often talks about the need for an "energy miracle." He argues that focusing on curbing emissions won't be sufficient to stop climate change. Will these materials play an important role in that "energy miracle" that Gates foresees?

DAVID ABRAHAM: The fact is that as we go from an economy based on oil to one that is going to be based more on electricity we are switching up our resource needs. While an electric car and an internal combustion engine look the same from the outside and they serve the same function, their ingredients are completely different. So we really must understand what are the resource challenges that we are going to face when we switch away from oil to all of these wonderful products. They do have resource implications, and we should be thinking about what they are and what they could be; because certain materials are becoming harder to find. Copper—the ore grades, for instance, are dropping. What that means is that in the past you have been able to find really rich deposits that were 10 percent or 5 percent copper, but when you are going down and the grades drop to 2 or 1 percent, that means you have to dig up five times the amount of material from the ground to produce the same amount of copper. If we are going to be using even more copper than we are using now for these electric vehicles, you are going to have a bigger environmental footprint. So how do we manage these resource needs? They need to be discussed.

IRENE PEDRUELO: Do you think there are specific countries that are actually taking this challenge seriously, and investing in it and hosting conferences on it, as opposed to the United States?

DAVID ABRAHAM: The one country I really see focused on it is China. Back in 2013, I was going to a conference in Guangzhou, in China. There were about 500 rare earth scientists there. I go to conferences here in the United States—and there was one in 2014 in Denver on critical materials, and there were about 120 people. And we were all wondering about how we use fewer rare earths and fewer critical materials. In China they don't have qualms about using rare earths. They talk about abundant rare earths. There was one session that was trying to figure out how to use rare earths to replace rubber in a lot of applications. They rely on rubber from Malaysia and elsewhere and they are wholly dependent on those materials. So while we in the West are figuring out how we can use less, China is trying to figure out how they can use more. And when we are all competing for the same production of electronics, they have people focusing on how we use the entire palette of materials on the periodic table, and we in the West or Japan are trying to figure out how to make the same products without using the same ingredients. It is going to be a real challenge to compete over the long-term.

IRENE PEDRUELO: In your book you talk about the German mathematician Karl Gerald van den Boogaart who predicted that "over the next several decades every high-tech system, like electric cars or solar panels, could be very well produced in China." What could that mean for countries like the U.S., Germany, or Japan?

DAVID ABRAHAM: I think what the gentleman, Karl van den Boogaart, was saying is that in the 1980s China had produced no rare earths and by the mid-1990s and by the turn of the century they produced 100 percent of the materials. If you look up the supply chain, it is one thing to produce the minor metals, but then the next step is to produce the materials from the minor metals. In the 1990s, China started to do that, and then, by the mid-2000s, they dominated the production of a lot of the materials that were made from rare earths. When Boogaart looks into the future, he sees the next step. He sees China starting to make components from rare earths, instead of relying on getting them from Japan, and ultimately building the wind turbines, trains, and planes from that. So that's the potential. If you look at their "Made in China 2025 plan," you will see they are no longer satisfied making Christmas lights. They want to make something that is of higher value, and that makes sense. If I was running an economy I would want to advance in the same way. But the question is: How will China play with its resources? Will it allow the market to have access to them or will it direct them domestically?

IRENE PEDRUELO: That is how Boogaart saw it. How do you see it?

DAVID ABRAHAM: I see that trend going in that direction. I think China is clear that it wants to produce these materials domestically. It wants to import these materials through Chinese companies if it doesn't have them in their country. It wants to process them. It doesn't want to rely on other countries for its resource needs, although it has to. I don't think there is a country in the world that wants to rely on someone else. But what China is more aggressive at is to spend money to ensure that they can either develop domestically or ensure that they can get the resources from overseas in a more direct way to the country. I do see them focusing on how they make components within their country. That should be a concern to Japan, to Korea, and Germany. And if we want to develop supply chains in our country, producing components, then it may be a worry for us, too.

IRENE PEDRUELO: Do you think that history books will talk about the "Rare Metal Age"?

DAVID ABRAHAM: I believe we are entering the Rare Metal Age. We have used four times the amount of many of these rare metals over the past 20 years than we have used since the beginning of time to the early 1990s. The only reason why our society exists, the reason why Uber exists, is not because we have always wanted to be part of a sharing economy. We have had libraries for millennia. We have always shared things. But the fact that we can do things in the palm of our hands—that we can order a taxi—that has come about because of the products that Apple makes, and the only way Apple can make a touchscreen is with indium. All of these little elements have come together over the past 30 or 40 years and we have just unlocked their secrets. Through unlocking their secrets, we are now unlocking a whole new set of products that are spreading around the world far faster than any other products that we have used in the past. For example, within four years, 6 percent of the world owned a smartphone. That is an incredible uptake in terms of products. The television, air conditioner, the refrigerator—none of these products spread around the world so quickly. You can call it the beginning of the Electronic Age, but when you crack those electronics open, you will see that there are a lot of different metals in there. We maybe are blinded to all of this because what is in front of us looks like a computer or a car, and we don't realize that all of this stuff that we are using is either mined or grown, and most of it is always mined.

IRENE PEDRUELO: In addition to the difficulties of making extraction more efficient, the field is facing another challenge: lack of talent.

DAVID ABRAHAM: Mining isn't sexy, at least to people in areas where I was growing up, on the East Coast. It was always something "over there" or something that other people were doing. Even materials scientists will take off and go into Facebook or some other tech area and won't be practicing what they have learned as they have gotten their PhDs in materials science. What you see is people not focusing on the sciences. I think it is just a general trend. When I travel to China or Japan, you see there is a greater focus on science and technology. I think we have to have that same focus and enthusiasm for science and technology as we do for entrepreneurship. The problem is entrepreneurship seems to be so sexy. People like to sit up and watch Shark Tank. It's always strange to me. The show is about the investors, not the people who are on the show. We need that same excitement, not just for the wealthy people who are the investors, but for the people who are toiling away in the labs and trying to figure out how to make a better battery. Maybe we have to get shows about them. They would probably be boring shows, because scientific advancement is slow and not as exciting; but we have to find a way to get that enthusiasm back.

IRENE PEDRUELO: The fact that this industry is so not transparent doesn't make things easier.

DAVID ABRAHAM: The market is very opaque. Deals are done in backrooms. It's an old boys' club that likes to remain an old boys' club. Statistics are a real challenge to come by, and that is a problem, because people don't like to invest in sectors where they don't know how much is being produced and how much is being sold and for what price, and to where and to whom. For a lot of these materials, there could be a good benefit for opening up the market in some way, whether that way is to try to find an exchange so that prices are done publicly, or more people doing research from the government, etc.

IRENE PEDRUELO: What environmental implications does the extraction of these rare metals have?

DAVID ABRAHAM: We are trading one set of natural resources or environmental concerns for another. The net climate benefits for switching to renewables makes sense economically. What we are seeing, though, is that a lot of these rare metals are more challenging environmentally to produce. So the answer isn't necessarily that we shouldn't produce them; it's that we should find better ways to do so. Southern China has been ripped apart by the production of rare earths. They are mining from relatively environmentally pristine areas. They are cutting off the sides of hills, and they are dumping the material that is not rich in minerals back into the streams. Producing some of these materials is more environmentally taxing than copper. They are used in smaller quantities, but to refine them takes a lot of acids, heat, and a lot of time in the process; and that therefore raises the environmental cost of producing these materials. We have to understand current mining practices, so that there is a greater focus on cleaning up the supply chain and finding more environmentally efficient methods to produce these materials.

IRENE PEDRUELO: Are communities affected by the extraction of rare metals being compensated? Are companies being held accountable?

DAVID ABRAHAM: When you are looking for example at China producing in Baotou, near the railroad facility there, there are cancer villages, where people are having trouble keeping their teeth. There is osteoporosis. There is cancer. It has been around for decades, and it seems like it is going to be continuing to be around for decades. I think what you have is an overall concern about how governments conduct regulation. Whether it's mining for rare metals or mining for other materials or the production of anything, there must be greater understanding of what the environmental impacts are, especially localized environmental impacts, and how you mitigate them.


Policy Innovations' Seven Quick Questions

Where do you see yourself in 20 years? Greening the supply chain.

What are the three main attributes of an innovator? To be able to observe, reflect, and act.

What other obsessions do you have in addition to rare metals? Finding an enjoyable lifestyle.

What do you do in your free time? I would like to find more of it.

I'm afraid of . . . not being able to finish what I start.

Life is about . . . helping others through tough times.

What would you tell your younger self if you had to start over? Focus on one thing.

Read More: Business, Conservation, Economy, Environment, Ethics, Technology, Sustainability

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