Tag Archives: stategic rare metals

De-Chinafication of Rare Earths: an Uphill Battle

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China mines some 70% of the world’s rare earths, the 17 metallic elements primarily used in magnets needed for civilian and military technologies. But its 90% share of processing for rare earths mined around the world is what really concerns officials from other countries working to secure their supply.

“China is a formidable competitor,” said Ramón Barúa, chief executive of Canada’s Aclara Resources, which is opening a rare-earths mine in Brazil to supply a processing plant it plans to build in the U.S. Aclara said it plans by August to decide where in the U.S. to build its plant for separating rare-earths deposits into individual elements. Aclara signed an agreement in 2024 to supply rare earths to VAC, a German company that is building a factory in South Carolina with $94 million in Pentagon funding to make magnets for clients including General Motors…

Brazil has the world’s second-largest rare-earth reserves after China, some 21 million tons, according to the U.S. Geological Survey. That represents more than a fifth of known global reserves—and more than 10 times those in the U.S…Despite its huge reserves, Brazil has been a small player in rare earths because of its complex mining regulations and the difficulty of attracting financing from companies willing to confront entrenched Chinese competitors. Costs to mine and process Brazilian rare earths are estimated to be around three times China’s, meaning Western buyers would likely pay a substantial premium for Brazilian minerals. Only a few companies outside China have mastered rare-earth processing, and the learning curve is steep. 

Brazil’s first big rare-earths mine opened in 2024 by a US private equity company some 90 miles west of the town of Nova Roma…but the mine is contracted to ship most of its production to China !…Aclara plans to invest some $600 million to complete work on a larger plant next to the mine in Nova Roma to start full production in 2028.

Excerpt from Samantha Pearson, Rare-Earths Plants Are Popping Up Outside China, WSJ, May 18, 2025

The Real Green Energy Transition: Mining Minerals from Plants

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Worries about China’s domination of critical minerals are driving Western scientists and companies to embark on increasingly novel ways to develop alternative sources. One such effort seeks to exploit a quirk of nature: Certain plants, called hyperaccumulators, absorb large quantities of minerals, like nickel and zinc, from the soil. Cultivating these plants, and then incinerating them for their metal, could provide U.S. companies with a small stream of domestically sourced minerals—without the expense and environmental destructiveness of conventional mining….At a greenhouse in Amherst, MA, scientists undertake gene editing to build a new fast-growing, nickel-absorbing oilseed plant. If successful, the plant could be used to harvest the metal from mineral-rich soils in states such as Maryland and Oregon…

Some 10 million acres of barren, nickel-rich soil are scattered around the U.S. In such areas, concentrations of minerals are generally too low to justify large-scale mining, but could offer opportunity for inexpensive nickel farming. In the case of nickel phyto-mining, as such efforts are known, the plants are dried and incinerated, leaving an ashy nickel concentrate. This concentrate can then be further purified and turned into battery-grade material.

To be sure, phytomining is small in scale. Companies in the field are targeting harvests of around 300 pounds of nickel per acre per year, roughly enough for six EV batteries. But the funding for nickel-farming plants is one small piece of a broad effort by the U.S. government to develop secure supplies of the minerals that are needed for defense and cutting-edge industry, and are an area where China is dominant.

Excerpt from Jon Emont, The New Weapon Against China’s Mineral Dominance: Plants, WSJ,  Jan. 25, 2025

How to Kill People 8 000 Feet Below Ground

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The South Africa’ government has been trying to starve out 1,000 informal prospectors so as to force them out of the Buffelsfontein mine, which extends some 8,000 feet below ground. For months in 2024, police have been sealing most entrances to the tunnels, blocking food and water deliveries and stationing guards at remaining exits to arrest any miners who make their way to the surface. In recent days, nearly 1,200 have surrendered. Police estimate that hundreds of men remain below, but it isn’t clear if they are unwilling or unable to reach the surface.

The operation is part of what police call their “Close the Hole” plan to combat illegal mining, an acute problem in what was once the gold-mining capital of the world. The South African government estimates that illegal gold mining costs the country the equivalent of over $3.8 billion a year in lost revenue, and is often associated with a jump in violent crime in nearby communities and an influx of migrants from neighboring countries… Facing a 42% unemployment rate, impoverished South Africans and migrants from nearby countries pry open sealed entrances and venture thousands of feet underground to try their luck. Locals call the men zama zamas, a Zulu phrase meaning “take a chance.”

Whole ecosystems exist below ground, with entrepreneurs selling miners everything from soda to toothpaste to sex.  The miners in Stilfontein, 100 miles southwest of Johannesburg, are suffering from hunger and dehydration, according to police. Industry experts say the zama zamas are often the lowest-level workers for larger criminal gangs that ultimately sell the gold abroad. Those who have migrated from elsewhere are sometimes victims of abuse, forced to work underground to pay off debts. Police said most miners who emerge will be charged with crimes and imprisoned or deported. 

Excerpt from Alexandra Wexler, The Standoff Deep Inside an Abandoned South African Gold Mine, WSJ, Nov. 15, 2024

What Ails the West: the Forgotten Art of Industrialization

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For the past few years, the West has been trying to break China’s grip on minerals that are critical for defense and green technologies. Despite their efforts, Chinese companies are becoming more dominant, not less. They are expanding operations, supercharging supply and causing prices to drop. Their challengers can’t compete. Take nickel, which is needed for electric-vehicle batteries. Chinese processing plants that dot the Indonesian archipelago are pumping out vast quantities of the mineral from new and expanding facilities, jolting the market. Meanwhile, Switzerland-based mining giant Glencore is suspending operations at its nickel plant in New Caledonia, a French territory, concluding it can’t survive despite offers of financial help from Paris. The U.K.’s Horizonte Minerals, whose new Brazilian mine was expected to become a major Western source, said last month that investors had bailed, citing oversupply in the market. Lithium projects in the U.S. and Australia have been postponed or suspended after a surge in Chinese production at home and in sub-Saharan Africa. 

The only dedicated cobalt mine in the U.S. also suspended operations last year, five months after local dignitaries attended its opening ceremony. Its owners say they are struggling against a flood of Chinese-produced cobalt from Indonesia and the Democratic Republic of Congo.

Last year, non-Chinese production of refined cobalt declined to its lowest level in 15 years… The share of lithium mining done within China or by Chinese companies abroad has grown from 14% in 2018 to 35% this year… Over the same time, lithium processing done within China has risen from 63% in 2018 to 70%…China has many advantages in the race to lock up minerals. Its miners are deep-pocketed and aggressive, making bets in resource-rich countries that Western companies have long viewed as corrupt or unstable, such as Indonesia, Mali, Bolivia and Zimbabwe. State banks provide financing for power plants and industrial parks abroad, paving the way for further private Chinese investment.

China’s rapid industrial development also means its companies have spent decades fine-tuning the art of turning raw ore into metals. They can set up new facilities quickly and cheaply. A paper published in February by the Oxford Institute for Energy Studies pegs the costs of building a lithium refinery outside China as three to four times higher than building one within the country. In eastern Indonesia, Chinese companies have built a fleet of highly efficient nickel and cobalt plants over the past few years after mastering a technology Western miners long considered glitchy and expensive. The plants run on coal power, some of it new, at a time when the world is looking to phase out dirty energy. “It’s just a simple, straightforward engineering capability that the Chinese have that has been lost in the rest of the world,” said Jim Lennon, managing director for commodities strategy at Macquarie, an Australian bank. “The Chinese have this overwhelming competitive advantage now that can’t really be addressed.”….

Excerpts from Jon Emont, China Is Winning the Minerals War, WSJ, June 19, 2024

The Real Price for ‘Green’ Energy

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Civilization would not exist were it not for miners. Every year the world’s oldest industry supplies hundreds of megatons of the primary metals and minerals that are essential to all subsequent industries—from medical devices to kitchen appliances, aircraft, toys, power plants, computers and cars. Hence it’s consequential when the governments of Europe and the U.S. implement policies requiring that global mining expand, and soon, by 400% to 7,000%. Those policies are meant to force a transition away from the oil, natural gas and coal that supply 80% of global energy. But it’s an unavoidable fact that building the favored transition machines—wind turbines, solar panels, electric cars—will require astonishing quantities of minerals to produce the same amount of energy.

The other challenge involves people. Mining has always been as much about people as it has about geology, technology and money. In “The War Below: Lithium, Copper, and the Global Battle to Power Our Lives,” Ernest Scheyder highlights the myriad difficulties faced by the people who build mines, as well as those hurt by or opposed to them. As Mr. Scheyder notes, mining is “dirty work.” That’s no invective; it’s just reality…He focuses on the social and political dynamics that accompany big mining projects because, as he writes, there’s “no way around the fact that mines are gargantuan creations that maim the Earth’s surface.” He makes clear that his goal isn’t to question the need for more mines but to understand “whether these lands should be dug up in an attempt to defuse climate change,” especially when some lands are considered sacred by their neighbors and inhabitants.

Excerpts, ‘Mark P. Mills, The War Below’ Review: Digging for Minerals, WSJ, Mar. 3, 2024

Economic Consequences of Falling Asleep on Wheel: the Geopolitics of Energy Transition

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American officials see Africa as helping to solve two problems. The first is a global shortfall in the minerals that will be needed if the world is to meet its climate goals.The second problem, at least for the West, is China’s outsized influence on supply chains. China refines 68% of the world’s nickel, 40% of copper, 59% of lithium and 73% of cobalt, according to a report in July by the Brookings Institution, an American think-tank. “China has had free rein for 15 years while the rest of the world was sleeping,” says Brian Menell, chief executive of TechMet, a minerals firm.

America views cobalt, which is used in batteries, as a cautionary tale. In Congo, the source of about 70% of global production, Chinese entities owned or had stakes in 15 of 19 cobalt-producing mines as of 2020. America’s decision to allow a US firm to sell one of Congo’s largest copper-cobalt mines to a Chinese one in 2020 is seen in Washington as an enormous act of stupidity. It is little comfort that battery-makers are trying to use less cobalt, in part because of concerns about operating in Congo. “We cannot allow China to become an OPEC of one in critical minerals,” says an American official, referring to the oil cartel.

It is possible to identify three strands in America’s approach. The first is a multilateral effort involving Western allies. In June, Jose Fernandez, America’s under-secretary of state for economic growth, energy, and the environment, launched the Minerals Security Partnership, whose 13 members include all the G-7 countries and the EU. Many of these countries are also looking to secure more scarce rocks. Britain launched a “critical minerals strategy” in July 2022 and later this month the European Commission will propose a Critical Raw Materials Act.

A second strand in America’s approach involves its development agencies “de-risking” projects as they have done in, say, agriculture or the power sector. As well as the us Export-Import Bank, which offers trade-financing, there is the International Development Finance Corporation (DFC)... Another potential success is a memorandum of understanding signed by America, Congo and Zambia in January. America says it will help Africa’s two largest copper exporters do more than just sell the metal in its elemental state. Under it, America agreed to help the two African countries build supply chains to process their raw minerals into battery precursors for electric vehicles.

Excerpts from How America plans to break China’s grip on African minerals, Economist,  Mar. 4, 2023

Mining the Earth to Save it

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The rush to secure green-energy metals is bringing new life to one of the world’s oldest mining hubs. Like the United States, Europe is worried that it is too reliant on China for supplies of once-obscure natural resources, such as lithium and rare-earth metals, that are seen as climate-friendly successors to oil and gas…. 

On both sides of the Atlantic, one of the best answers to long-simmering worries about green-energy security is to look north…, for example, to the “Canadian Shield,” a vast band of rock encircling Hudson Bay. The “Baltic Shield” that stretches across Scandinavia to western Russia is similarly mineral-rich. It helps explain why Sweden in particular has such a long mining heritage. In the mid-17th century, the country’s “Great Copper Mountain” near Falun provided two-thirds of the world’s copper. Even today, 80% of iron ore mined in the EU comes from a site near the Arctic town of Kiruna that Swedish state operator LKAB has exploited for well over a century.

The energy transition is an opportunity for Sweden’s mining complex. LKAB said in January 2023 that it had identified Europe’s largest body of rare-earth metals close to its existing Kiruna operation…Digging up the planet to save it is an awkward pitch. The only way for miners to counter accusations that they are adding to the problem they want to solve is by decarbonizing operations. Here Sweden is again helped by the geology of the Baltic Shield, whose river valleys are favorable for green-energy production. Roughly 45% of the country’s electricity comes from hydroelectric power, with much of the remainder provided by nuclear and wind. It is also cheap, particularly in the Arctic, where many mines are located. Against a favorable geopolitical backdrop, the biggest risk for investors is political. Mines, which can bring a lot of noise and relatively few jobs to an area, don’t tend to be popular locally.

There is a reason the West relies on autocracies for a lot of its oil.

Excerpts from Stephen Wilmot, For Mining EV Metals, the Arctic Is Hot, WSJ, Feb. 14, 2023

After the Oil Shock, the Metals Shock: fueling the green economy

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Indonesia banned exports of nickel ore in 2020 in a bid to capture more of the metal’s value. As a result, exports of Indonesian nickel products were worth $30bn in 2022, more than ten times what they were in 2013. Nickel smelters have sprouted around the country, and makers of batteries, in which the metal is a key component, are building factories. On January 17, 2023 a cabinet official said the government was close to sealing deals with the world’s two largest makers of electric vehicles (EVS), Tesla and BYD, to build cars in Indonesia. Flushed with progress, the government is now thinking beyond nickel.

“This success will be continued for other commodities,” said Joko Widodo, Indonesia’s president, in December 2022. He confirmed that an export ban on bauxite, the ore used to make aluminum, was coming in June 2023. The bauxite industry is scrambling to prepare itself for the shock….The government has suggested that a ban on copper exports could be implemented next, with bans on tin and gold exports to follow.

The country’s pulling power in the global nickel market will be hard to replicate, though. Indonesia produces 37% of the world’s nickel. But its bauxite, gold and copper production is less than 5% of the global total…Bauxite smelters are also expensive and harder to build than nickel smelters. Local firms are struggling to raise the capital needed for them, often around 18trn rupiah ($1.2bn)…All the eight bauxite smelters are under construction are Chinese investments. . 

Indonesia’s resource nationalism also risks falling foul of global trade rules but Jokowi, Indonesia’s president  remains  undeterred. “This is what we want to do: be independent, independent, independent,” he said.

Excerpts from Indonesia’s Industrial Policy: Full Metal Jacket, Economist,  Jan. 28, 2023

The Sacrificial Lambs of Green Energy

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Lithium Americas, a Canadian company, has plans to build a mine and processing plant at Thacker Pass, near the southern tip of the caldera in Nevada. It would be America’s biggest lithium mine. Ranchers and farmers in nearby Orovada, a town of about 120 people, worry that the mine will threaten their water supply and air quality. Native American tribes in the region say they were not properly consulted before the Bureau of Land Management (BLM), a federal agency that manages America’s vast public lands, decided to permit the project. Tribes also allege that a massacre of their ancestors took place at Thacker Pass in 1865…

The fight over Thacker Pass is not surprising. President Joe Biden wants half of all cars sold in 2030 to be electric, and to reach net-zero emissions by 2050. These ambitious climate targets mean that battles over where and how to mine are coming to mineral-rich communities around the country. America is in need of cobalt, copper and lithium, among other things, which are used in batteries and other clean-energy technologies. As with past commodity booms, large deposits of many of these materials are found in America’s western states . America, of course, is not the only country racing to secure access to such materials. As countries pledge to go carbon-free, global demand for critical minerals is set to soar. The International Energy Agency, a forecaster, estimates that by 2040 demand for lithium could increase by more than 40 times relative to 2020. Demand for cobalt and nickel could grow by about 20 times in the same period.

Beyond its green goals, America is also intent on diversifying mineral supplies away from China and Russia (big producer of nickel), which—by virtue of its natural bounty and muscular industrial policy—has become a raw-materials juggernaut… The green transition has also turned the pursuit of critical minerals into a great-power competition not unlike the search for gold or oil in eras past. Mining for lithium, the Department of Energy (DOE) says, is not only a means of fighting climate change but also a matter of national security.

Westerners have seen all this before, and are wary of new mines…The economic history of the American West is a story of boom and bust. When a commodity bubble burst, boomtowns were abandoned. The legacy of those busts still plagues the region. In 2020 the Government Accountability Office estimated that there could be at least 530,000 abandoned hardrock-mine features, such as tunnels or waste piles, on federal lands. At least 89,000 of those could pose a safety or environmental hazard. Most of America’s abandoned hardrock mines are in 13 states west of the Mississippi River…

Is it possible to secure critical minerals while avoiding the mistakes of previous booms? America’s debates over how to use its public lands, and to whom those lands belong, are notoriously unruly. Conservationists, energy companies, ranchers and tribal nations all feel some sense of ownership. Total harmony is unlikely. But there are ways to lessen the animosity.

Start with environmental concerns. Mining is a dirty business, but development and conservation can coexist. In 2020 Stanford University helped broker a national agreement between the hydropower industry and conservation groups to increase safety and efficiency at existing dams while removing dams that are harming the environment….Many worry that permitting new development on land sacred to tribes will be yet another example of America’s exploitation of indigenous peoples in pursuit of land and natural resources. msci, a consultancy, reckons that 97% of America’s nickel reserves, 89% of copper, 79% of lithium and 68% of cobalt are found within 35 miles of Native American reservations.

TThe BLM is supposed to consult tribes about policies that may affect the tribes but the  consultation process is broken. Often it consists of sending tribes a letter notifying them of a mining or drilling proposal.

Lithium Americas has offered to build the town a new school, one that will be farther away from a road that the firm will use to transport sulphur. Sitting in her truck outside a petrol station that doubles as Orovada’s local watering hole, Ms Amato recalled one group member’s response to the offer: “If all I’m going to get is a kick in the ass, because we’re getting the mine regardless, then I may as well get a kick in the ass and a brand new school.”

Excerpt from America’s Next Mining Boom: Between a Rock and a Hard Place, Economist, Feb. 19, 2022

When Others Do our Dirty Work: the Costs of Overdependence

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China is tightening its grip on the global supply of processed manganese, rattling a range of companies world-wide that depend on the versatile metal—including the planet’s biggest electric-vehicle makers.

China produces more than 90% of the world’s manganese products, ranging from steel-strengthening additives to battery-grade compounds. Since October 2020, dozens of Chinese manganese processors accounting for most of global capacity have joined a state-backed campaign to establish a “manganese innovation alliance,” led by Ningxia Tianyuan Manganese Industry Group, setting out in planning documents goals and moves that others in the industry say are akin to a production cartel. They include centralizing control over supply of key products, coordinating prices, stockpiling and networks for mutual financial assistance.

The squeeze sent prices soaring in metal markets world-wide, snagging steelmakers and sharpening concern among car makers. China’s metal industries already dominate the global processing of most raw materials for rechargeable batteries, including cobalt and nickel. Three-quarters of the world’s lithium-ion batteries and half of its electric vehicles are made in China.  High-purity forms of manganese have increasingly become crucial for battery-powered automobiles, touted by Volkswagen AG and Tesla Inc. in recent months as a viable replacement for other, more-expensive battery ingredients….

While manganese ore is relatively abundant around the world, it is almost solely refined in China. Battery-grade manganese is traded mostly privately, and pricing can be opaque. Miners say a metric ton of the purified metal could cost up to $4,000—barely a 10th of the cost of cobalt, a widely used battery metal. By replacing cobalt, manganese could help auto makers produce 30% more cars with the same amount of nickel, analysts say.

Rival manganese projects outside China view the cartel-like activities as an opportunity to gain momentum for their own battery-grade developments…Still, analysts say such projects outside China might take years to start and heavy cost investments to develop. Viable bases of manganese ore are often located in remote regions, which require expensive infrastructure to ferry and process extracted ores.

Excerpt from Chuin-Wei Yap, China Hones Control Over Manganese, a Rising Star in Battery Metals, WSH, May 21, 2021

Congo, China and Battery Minerals

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The demand of cobalt is bound to increase because of the batteries needed to power  electric vehicles (EVs).  Each battery uses about 10kg of cobalt. It is widely known that more than half of the world’s cobalt reserves and production are in one dangerously unstable country, the Democratic Republic of Congo. What is less well known is that four-fifths of the cobalt sulphates and oxides used to make the all-important cathodes for lithium-ion batteries are refined in China. (Much of the other 20% is processed in Finland, but its raw material, too, comes from a mine in Congo, majority-owned by a Chinese firm, China Molybdenum.)

On March 14t, 2018 concerns about China’s grip on Congo’s cobalt production deepened when GEM, a Chinese battery maker, said it would acquire a third of the cobalt shipped by Glencore, the world’s biggest producer of the metal, between 2018 and 2020—equivalent to almost half of the world’s 110,000-tonne production in 2017. This is likely to add momentum to a rally that has pushed the price of cobalt up from an average of $26,500 a tonne in 2016 to above $90,000 a tonne…

South Korean and Japanese tech firms and it’s a big concern of theirs that so much of the world’s cobalt sulphate comes from China. Memories are still fresh of a maritime squabble in 2010, during which China restricted exports of rare-earth metals vital to Japanese tech firms. China produces about 85% of the world’s rare earths.

Few analysts expect the cobalt market to soften soon. Production in Congo is likely to increase in the next few years, but some investment may be deterred by a recent five-fold leap in royalties on cobalt. Investment elsewhere is limited because cobalt is almost always mined alongside copper or nickel. Even at current prices, the quantities needed are not enough to justify production for cobalt alone.

But demand could explode if EVs surge in popularity… the use of cobalt for EVs could jump from 9,000 tonnes in 2017 to 107,000 tonnes in 2026.  The resulting higher prices would eventually unlock new sources of supply. But already non-Chinese battery manufacturers are looking for ways to protect themselves from potential shortages. Their best answer to date is nickel.

The materials most commonly used for cathodes in EV batteries are a combination of nickel, manganese and cobalt known as NMC, and one of nickel, cobalt and aluminium known as NCA. As cobalt has become pricier and scarcer, some battery makers have produced cobalt-lite cathodes by raising the nickel content—to as much as eight times the amount of cobalt. This allows the battery to run longer on a single charge, but makes it harder to manufacture and more prone to burst into flames. The trick is to get the balance right.

Strangely, nickel has not had anything like cobalt’s price rise. Nor do the Chinese appear to covet it… Nickel prices plummeted from $29,000 a tonne in 2011 to below $10,000 a tonne 2017…. But by 2025 McKinsey expects EV-related nickel demand to rise 16-fold to 550,000 tonnes.

In theory, the best way to ensure sufficient supplies of both nickel and cobalt would be for prices to rise enough to make mining them together more profitable. But that would mean more expensive batteries, and thus electric vehicles.

Excerpts from The Scramble for Battery Minerals, Economist, Mar. 24, 2018