Summary:

Japanese scientists have pinpointed large deposits of rare earth elements that are necessary for all sorts of cleantech gear. The discovery gives hopes that China’s chokehold on the rare earth supply could be over, but accessing those minerals will be difficult.

Molycorp Betting on IPO to Open Federal Purse for Rare Earth

Japanese scientists have pinpointed large deposits of rare earth elements that are necessary building blocks for all sorts of clean technology from wind turbines, to batteries, to electric cars to LED lighting. The discovery gives hope that China’s chokehold on the rare earth supply could be waning, but at the same time accessing those minerals could end up being pretty difficult.

Researchers from the University of Tokyo and the Japan Agency for Marine-Earth Science and Technology said they have tested and confirmed rich deposits of rare earth elements at some of the 78 locations around Pacific Ocean. Those deposits could produce 80 billion to 100 billion tons of the minerals, compared with the 110 million tons in world reserves that have been estimated by the U.S. Geological Survey (USGS). The Japanese scientists published their finding in Nature Geoscience Sunday.

Japan is particularly keen on finding and mining new rare earth deposits since its domestic manufacturers, like its battery industry, are among the world’s heaviest users of the raw materials. Japan has also been eager to find suppliers outside of China, which produces over 90 percent of the world’s rare earth elements and holds a little over one-third of the world’s rare earth deposits. China has imposed export restrictions on rare earth elements in recent years, which has stirred outcry from countries including the U.S. and Japan.

Under the Sea?

However, mining rare earth under the sea won’t be easy. The deposits described by Nature Geoscience are a few miles from the ocean’s surface and located in international waters. Accessing those materials in the middle of the Pacific will pose technical and environmental challenges, according to a Bloomberg report. It also will spark some political wrangling over who gets the mining rights.

Major rare earth mining companies are already digging up the valuable materials on land. Colorado-based Molycorp held an initial public offering last summer to raise money for reopening an abandoned rare earth mine in California. The mine would be the first new U.S. source of production of these minerals in more than a decade.

But many countries including China already have a deep interest in undersea mining for all sorts of materials and are undertaking research and development work to make that happen.

China Stranglehold

China can provide an abundant and cheaper supply partly because its production is a by-product of iron mining. But mining operations aren’t known for being environmentally friendly in the first place. In fact, a new rare earth processing plant under construction in Malaysia that will provide one-sixth of the world’s supply is facing delays because of an environmental review that recommends stricter environmental and safety measures. The review came out last week and prompted a one-day halt to the trading of the stock of the plant owner, Australia-based Lynas.

Lynas’s new plant exemplifies a concerted effort by Japanese companies to minimize their reliance on China by investing in rare earth mining elsewhere. Mitsubishi UFJ Financial Group took a 10 percent stake in Lynas. At the same time, Sumitomo in Japan agreed in late 2010 to invest $130 million in Molycorp. Sumitomo has delayed completing the transactions but said recently it will do so after securing enough Japanese customers. Molycorp also has announced a joint venture with Hitachi Metals in Japan to produce rare earth alloys and resulting magnets.

The term “rare earth” is something of a misnomer because of many rare earth elements are actually abundant in the Earth’s crust. Seventeen elements are classified as rare earths, the USGS said. But these materials are less likely to become concentrated deposits like other common metals and are generally difficult to mine at a commercially viable scale, so they have largely come from only a handful of sources.

Comments have been disabled for this post