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Summary:

Wean vehicles off of one limited resource — petroleum — and get them hooked on another: lithium. That’s what some critics have raised about switching over to electric cars that use lithium-ion batteries, since the U.S. imports most of its lithium from Chile and Argentina, while […]

rare-earth-mine-caliWean vehicles off of one limited resource — petroleum — and get them hooked on another: lithium. That’s what some critics have raised about switching over to electric cars that use lithium-ion batteries, since the U.S. imports most of its lithium from Chile and Argentina, while Bolivia has enough deposits to become a major lithium provider. But amid all the hubbub about the looming lithium squeeze, another resource trend is taking shape that has the potential to drive some big changes in advanced battery and vehicle technology: a group of metals known as rare earth elements, or REE.

According to Lux Research analyst Jacob Grose, “Rare earths are used very much in nickel metal hydride batteries,” like the Toyota Prius and Honda Insight. “Even though…hybrids use only a fraction of the worldwide output of these metals, if there is a shortage and prices rise, it will definitely lead to cost increases in today’s hybrids.”

REE, used in fiber-optic telecom cables, military gear, computers and other technologies, aren’t actually as uncommon as the name implies. Some of them are about as abundant as industrial metals like nickel, copper, zinc and lead. For comparison, the two least abundant REE (thulium and lutetium) are almost 200 times more common than gold. But the problem is it’s rare for these metals to become concentrated in deposits that are easy to tap, and as a result, most of the world’s supply comes from just a few sites.

The U.S. has some of the largest known deposits of REE (pdf download), but since the 1990s it’s been importing most of its REE from China, according to the U.S. Geological Survey. That’s partly because Chinese companies came online and ramped up production, helping to drive down prices to a point where U.S. companies have found it difficult to compete. Years ago the primary domestic supplier of REE, Colorado-based Molycorp, encountered several wastewater leaks (spilling radioactive waste into a nearby lake), its mining permit expired and it stopped mining.

But the market for REEs is set to explode over the next few years. Reuters reported that demand for these metals is on track to exceed supply by some 40,000 metric tons per year within the next “several years” unless new production comes online. Molycorp is reportedly hoping to do just that, with plans to reopen its mine in California’s San Bernadino County in 2012 with new environmental safeguards. At the same time, however, China is considering limits on REE exports — something that Grose said “is indeed a concern for the hybrid vehicle industry.”

rare-earth-production-usgs

An REE squeeze, brought on through politics or simple resource depletion, could have repercussions — and drive innovation — beyond hybrid vehicles. Even cars made with lithium-ion batteries (the technology of choice for the upcoming generation of all-electric cars) often have an REE called neodymium in the magnets used to make their electric motors. According to Grose, “If the price of neodymium skyrockets, automakers might go to less common types of motors” that don’t require these magnets or the rare metals, such as wound-rotor motors.

So similar to the way in which battery makers whose technologies use less lithium could enjoy an advantage if lithium prices jump, and the way thin-film solar became the hot new thing when polysilicon shortages shook the photovoltaic industry last year, innovators working around commodities like neodymium could find a window of opportunity in an REE crunch.

Graphics courtesy of the U.S. Geological Survey. Top photo shows the Mountain Pass rare earth element mine in California.

  1. [...] table#itemcontentlist tr td div blockquote { padding-left:6px; border-left: 6px solid #dadada; Beyond Lithium: What the Rare Earth Squeeze Means for Hybrid Cars – earth2tech.com 09/01/2009 Wean vehicles off of one limited resource — petroleum — and [...]

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  2. [...] Beyond Lithium: What the Rare Earth Squeeze Means for Hybrid Cars __________________ . . . . . . The world loves to be deceived. [...]

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  3. I’m wondering where a collaboration of automotive electronic instrumentation folks might be to capitalize on a 12V solar power systems for small residences, cabins, etc. Driving in a Lincoln Towncar the other day brought to my attention that the automotive industry has a remarkable control of the environment in a vehicle and perhaps there is a business in taking these controls out of the auto scrap piles and recirculating them in homes in developing countries and remote/offgrid homes here.

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  4. [...] Something to keep in mind: the Tesla Roadster uses 900 pounds of lithium-ion batteries. If this becomes a widely adopted technology, (say, 300 million cars, a small estimate – one for each person in the United States – that would be 270 billion pounds of lithium ion battery. Is there a supply for such demand?) some argue that we would be trading one limited resource for another. We could then become dependent on those countries that possess the lithium, such as Chile, Argentina, or Bolivia (source). [...]

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  5. [...] Lux Research analyst Jacob Grose explained to us recently, “Even though…hybrids use only a fraction of the worldwide output of these metals, if there is [...]

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  6. [...] of metals known as rare earth elements, used in nickel metal hydride batteries — it could potentially drive up the costs of hybrid cars. Battery and auto makers thankfully have started paying more attention this year to the possibility [...]

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  7. [...] of China’s government limiting exports of the metals, Lux Research analyst Jacob Grose has told us, “is indeed a concern for the hybrid vehicle [...]

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  8. [...] squeeze on rare earth elements, as well as increased demand of these metals, might mean a price hike of the already-pricey EVs and hybrids.  It also might mean that we ought to make hay while the sun shines and get a jump [...]

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  9. [...] program to projects meant to increase U.S. production of rare earth elements, a group of metals used in hybrid vehicle batteries, wind turbines, compact fluorescent light bulbs and magnets for electric vehicle motors, as well as [...]

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