Rising rare earth prices alert companies to increase resource utilization
This summer, China stated that it would cut its 40% export quota for rare earths in order to meet its own economic needs. The price of rare earths in the international market has thus risen.
Other rare earth producers outside China, such as Molycorp (MCP) and Australian Lynas Corp (LYC Corp.), are stepping up production of rare earth metals.
However, large-scale rare earth users in the United States pointed out that the surge in rare earth prices has sounded a warning to enterprises that companies should improve the efficiency of raw material utilization. In the coming decades, due to the rapid economic growth of developing countries such as China and India, many resource supplies, including oil and copper, will become tight.
Steven Duclos, chief scientist at GE, said: "Actually, many products and processes are designed when there is no supply risk for rare earth materials."
For example, GE is participating in a project that is partially funded by the U.S. Department of Energy to help US wind turbines reduce their rare earth use by up to 80%.
Given that the manufacture of a wind turbine requires a ton of rare earth, if this can be achieved, it will be a major change that will help resolve the shortage of rare earths.
* China Reduces Rare Earth Export Quotas Although rare earths are used in a wide range of fields, the production of rare earths for use by companies is expensive.
China's concern about rare earths caused market concerns ten years ago, because the low price of rare earths led to the unprofitable exploitation of rare earths for Western mining companies. China currently provides 97% of global rare earth production.
Molycorp chief executive Mark Smith said: "For the foreseeable future, global supply and demand will continue to be imbalanced."
Industry experts believe that China is unlikely to relax restrictions on rare earth exports.
By restricting the export of rare earths, China clearly hopes to encourage domestic industries to sell rare earth products with higher added value rather than exporting rare earth materials with much less profitability. Therefore, some US companies that rely on rare earths are considering changing from buying rare earths from China to buying spare parts made from rare earths in China.
For example, Johnson Controls (JCI.N) is considering the use of Chinese-made permanent magnet motors in its large air-conditioning systems.
* Warning Signals GE's Duclos said that in addition to developing more rare earth resources outside of China, companies should also consider ways to recycle rare earth resources.
About one-third of today's fluorescent tubes are recycled after the end of their useful life. Glass, metal ports and mercury can be reused, but the rare earth used in the bulb will be disposed of as garbage.
"The technology now allows us to stop using these elements and to bury them as waste after they have been used once," said Duclos. "Obviously, as the price of rare earths goes up, recycling these metals will bring economic benefits." interest."
Dave Myers, president of Johnson Controls Building Energy Conservation, said: "Every few years there will be a shortage of rare earth supplies, but I think there will be innovation to solve this problem.