The commodity crunch that could turn the tables on clean energy
For a generation, the cutting edge of American innovation
lived in the garages and office parks of Silicon Valley. Our brightest
minds forged their master works in the digital ether, breakthrough after
breakthrough propelling humankind into the Information Age.
Today, a new high-tech rush is underway. This one is spurred by the grim reality of climate change and the ascendance of clean energy. But the technologies that promise to slow the rise in temperature will be sculpted not from ones and zeros. They will be forged from a handful of rare minerals sprinkled across some of the most remote places on Earth.
For a moment, forget its voluptuous curves, chic interior or streamlined display. What makes Tesla’s Model 3 an object of envy is the 215-mile range. Without its vroom, Tesla’s latest invention would be a luxury golf cart, a plaything for high-earning tree huggers. Instead, it’s the first mass-produced electric car with mass-market sex appeal.
The beating heart of a Tesla sedan is the lithium-ion battery strapped to the underside of the car. Guarding that precious cargo is a titanium plate. Lithium and titanium are what David Abraham, author of The Elements of Power, calls rare metals — elements whose total annual production can fit into just a few rail cars.
“We don’t realize that the products we need today are more tied to the ground than ever,” said Abraham. “And the green products themselves are even more tied because of the materials that the rely upon.”
Without lithium, the Model 3 would run on a heavy
lead-acid battery. Without titanium, its underbelly would be guarded by
weighty stainless steel. The car would be lumbering, sluggish and easily
fatigued — hardly the speed demon Tesla promised. For all his genius,
Elon Musk owes much of his success to the darker corners of the periodic
table.
Rare metals don’t just live in your next electric vehicle. They occupy your alarm clock, your television and your desktop PC. A Sonicare toothbrush contains 35 different metals. Your iPhone contains half the elements found on Earth.
Rare metals are also essential to the hardware of clean
energy — wind turbines, solar panels and home batteries. As demand for
green technologies rises, so will demand for rare metals.
Problematically, many rare metals are only mined as byproducts of more common minerals. Selenium and tellurium are extracted from copper slag. As a byproduct, rare metals are cheap to produce. Mined on their own, they would be prohibitively expensive, meaning that as demand for rare metals rises, supply could remain static.
By and large, the metals needed for clean energy are abundant, but mining operations are scarce and supply remains tenuous. This summer, Tesla opened its Gigafactory, a mammoth-sized facility in Nevada that will produce batteries for its forthcoming fleet of Model 3s. By one estimate, the factory will consume 25,000 tons of lithium hydroxide per year, nearly half of the current global supply. Where will the lithium come from?
Brian Paes-Braga, the 28-year-old CEO of LithiumX, says he wants his company to be the Standard Oil of lithium, a cornerstone of America’s clean energy boom. Lithium X boasts the largest land position in Clayton Valley, Nevada, the only major source of lithium in the United States. The firm is contending with lithium giants like Albemarle and relative newcomers like Oroplata for a slice of the Tesla pie.
“We think that everyone actually has to work together on
this,” said Paes-Braga. The former stockbroker aims to help Musk and
other entrants to the clean-energy business access the raw materials
needed to wean the world off fossil fuels.
The U.S. has fallen woefully behind on rare metal output, and that poses a sizable challenge for Tesla and other Americans manufacturers looking to shore up supply lines and drive down costs by buying from local producers. China, by contrast, has become a world leader in rare metals, a fact that gives Chinese manufacturers a competitive edge.
China wants to use its cache of rare metals to produce
cutting-edge clean energy technologies that can be sold abroad. “They
are not satisfied making Christmas lights anymore, and they are not
satisfied assembling iPhones,” said Abraham.
The United States has its own clean energy ambitions, but it’s lagging behind on materials, and building up a supply is no easy task. Americans balk at the high environmental cost of mining. New suppliers only enter the field when the price of minerals shoots up, and supply chains take years to develop.
The alternative, importing materials from China, isn’t without its risks. In 2010, China blocked exports of rare metals to Japan over a territorial dispute. Currently, the U.S. is bringing a trade case against China over export duties on nine different materials.
China’s rare metal production is consolidated in state-owned enterprises, meaning the government can restrict exports to competitors abroad. And it can be difficult to prove that a company — even a state-owned company — is playing favorites with domestic manufacturers.
“If a goal of Beijing is to bolster its green companies by providing cheap, accessible materials to downstream manufacturing, owning a resource company provides a great way to do that,” said Abraham. “Could Beijing use its ownership stake to decide who can buy which resources and at what price? Yes.”
That is bad news for American manufacturers vying to remain competitive in a global market. A 2013 study publishing the Proceedings of the National Academy of Sciences
looked at 62 metals used in modern technologies. In every case,
substitute metals proved either inadequate or nonexistent. At the
current rate, the clean energy arms race could become a game of Iron Chef in which China has access to the full pantheon of herbs and spices, and America is left with an old bottle of Mrs. Dash.
Facing shortages, American companies might flee to China where demand for clean energy is booming, labor is cheap and the raw materials are readily available. By operating on Chinese soil, firms would make themselves vulnerable to intellectual property theft. They would also siphon well-paid manufacturing jobs from American cities. If the clean energy revolution is to make good on its fervent promise of middle-class job growth, enough green tech firms have to remain on this side of the Pacific.
“It’s hard to get the flour and the chocolate chips and the butter all out of the chocolate chip cookie,” said Abraham. “We’re good at making things. We’re really not good at extracting the metals afterward.” He contends Americans need to get better at mining.
“If we can stop focusing on apps and start focusing on producing products, that would be helpful,” said Abraham. “Materials science is slow. Metallurgy is slow. The work to make a better battery takes a long time and it’s not as sexy.”
Abraham laid out several possible remedies to bolster the country’s rare metal output.
“I would not argue to produce all material in the U.S.,” said Abraham. “But having abundant access to a material and producing locally spurs industries to develop and use that material.”
The United States, by and large, imports lithium and electric vehicle batteries from overseas. China, the world’s largest consumer of lithium and a leading producer of EV batteries, boasts the world’s second-largest lithium reserves. With the Gigafactory ramping up production, the dynamic could shift. Rising demand for lithium could send U.S. producers into overdrive.
For some, clean energy augurs a new era of extraction where rare metals invite all of the same risks as oil — trade disputes, market volatility, environmental damage. But Abraham believes rare metals are essential to warding off carbon pollution and climate change. And robust domestic production is vital to protecting domestic manufacturers against shocks to supply, including OPEC-style embargoes by hostile foreign powers.
In the Rare Metal Age, materials will rule. The next great technological marvel may be conceived in a glittering San Francisco high-rise, but the raw materials needed to build it will emerge from the murky depths of the grittiest mines. Access to the core ingredients of clean energy will shape not only the success or failure of green tech entrepreneurs, but the success or failure of our efforts to halt climate change.
“When there are cuts, there are still ways to get some supply,” said Abraham, “but it’s no way to build an industry critical to the future of saving the planet.”
Jeremy Deaton writes for Nexus Media, a syndicated newswire covering climate, energy, politics, art and culture. You can follow him at @deaton_jeremy.
Today, a new high-tech rush is underway. This one is spurred by the grim reality of climate change and the ascendance of clean energy. But the technologies that promise to slow the rise in temperature will be sculpted not from ones and zeros. They will be forged from a handful of rare minerals sprinkled across some of the most remote places on Earth.
For a moment, forget its voluptuous curves, chic interior or streamlined display. What makes Tesla’s Model 3 an object of envy is the 215-mile range. Without its vroom, Tesla’s latest invention would be a luxury golf cart, a plaything for high-earning tree huggers. Instead, it’s the first mass-produced electric car with mass-market sex appeal.
The beating heart of a Tesla sedan is the lithium-ion battery strapped to the underside of the car. Guarding that precious cargo is a titanium plate. Lithium and titanium are what David Abraham, author of The Elements of Power, calls rare metals — elements whose total annual production can fit into just a few rail cars.
“We don’t realize that the products we need today are more tied to the ground than ever,” said Abraham. “And the green products themselves are even more tied because of the materials that the rely upon.”
The Model 3
Rare metals don’t just live in your next electric vehicle. They occupy your alarm clock, your television and your desktop PC. A Sonicare toothbrush contains 35 different metals. Your iPhone contains half the elements found on Earth.
Rare metals need in clean energy
Problematically, many rare metals are only mined as byproducts of more common minerals. Selenium and tellurium are extracted from copper slag. As a byproduct, rare metals are cheap to produce. Mined on their own, they would be prohibitively expensive, meaning that as demand for rare metals rises, supply could remain static.
By and large, the metals needed for clean energy are abundant, but mining operations are scarce and supply remains tenuous. This summer, Tesla opened its Gigafactory, a mammoth-sized facility in Nevada that will produce batteries for its forthcoming fleet of Model 3s. By one estimate, the factory will consume 25,000 tons of lithium hydroxide per year, nearly half of the current global supply. Where will the lithium come from?
The Standard Oil of Lithium
If Elon Musk is a modern-day Henry Ford, just 200 miles from his Gigafactory, a handful of rare metal magnates are lining up to be this century’s John D. Rockefeller.Brian Paes-Braga, the 28-year-old CEO of LithiumX, says he wants his company to be the Standard Oil of lithium, a cornerstone of America’s clean energy boom. Lithium X boasts the largest land position in Clayton Valley, Nevada, the only major source of lithium in the United States. The firm is contending with lithium giants like Albemarle and relative newcomers like Oroplata for a slice of the Tesla pie.
A rendering of the completed Gigafactory
The U.S. has fallen woefully behind on rare metal output, and that poses a sizable challenge for Tesla and other Americans manufacturers looking to shore up supply lines and drive down costs by buying from local producers. China, by contrast, has become a world leader in rare metals, a fact that gives Chinese manufacturers a competitive edge.
China, Global Leader on Rare Metals
China produces the preponderance of the Earth’s rare metals. America’s largest trading partner has spent years building environmentally destructive mines and developing supply lines to provide an uninterrupted flow of indispensable materials. If you want to know where the rare metals in your toothbrush come from, look to the pock-marked terrain of Inner Mongolia.
The Bayan Obo Mining District in Inner Mongolia is China’s largest source of rare metals.
The United States has its own clean energy ambitions, but it’s lagging behind on materials, and building up a supply is no easy task. Americans balk at the high environmental cost of mining. New suppliers only enter the field when the price of minerals shoots up, and supply chains take years to develop.
The alternative, importing materials from China, isn’t without its risks. In 2010, China blocked exports of rare metals to Japan over a territorial dispute. Currently, the U.S. is bringing a trade case against China over export duties on nine different materials.
China’s rare metal production is consolidated in state-owned enterprises, meaning the government can restrict exports to competitors abroad. And it can be difficult to prove that a company — even a state-owned company — is playing favorites with domestic manufacturers.
“If a goal of Beijing is to bolster its green companies by providing cheap, accessible materials to downstream manufacturing, owning a resource company provides a great way to do that,” said Abraham. “Could Beijing use its ownership stake to decide who can buy which resources and at what price? Yes.”
Pixabay
China produces the vast majority of neodymium and dysprosium, two metals used in wind turbines.
Facing shortages, American companies might flee to China where demand for clean energy is booming, labor is cheap and the raw materials are readily available. By operating on Chinese soil, firms would make themselves vulnerable to intellectual property theft. They would also siphon well-paid manufacturing jobs from American cities. If the clean energy revolution is to make good on its fervent promise of middle-class job growth, enough green tech firms have to remain on this side of the Pacific.
A Rare-Metal Remedy
What is the fix for America’s rare metal deficiency? That is the subject of some debate. Environmentalists have called for manufacturing systems where no high-tech gizmo ends up in a landfill. Cities would become the mines of the future. Rare metals would be teased from our used phones, computers and electric cars — at least in theory.“It’s hard to get the flour and the chocolate chips and the butter all out of the chocolate chip cookie,” said Abraham. “We’re good at making things. We’re really not good at extracting the metals afterward.” He contends Americans need to get better at mining.
“If we can stop focusing on apps and start focusing on producing products, that would be helpful,” said Abraham. “Materials science is slow. Metallurgy is slow. The work to make a better battery takes a long time and it’s not as sexy.”
Abraham laid out several possible remedies to bolster the country’s rare metal output.
- Deploy American brainpower. Because the United States produces so little of the Earth’s rare metals, the country is sorely lacking in experts. When the Bureau of Mines closed its doors in 1996, materials science lost a major source of funding. The country needs more minds and more dollars dedicated to extracting and processing minerals at lower cost and with minimal environmental damage.
- Make gadgets that last longer. Planned obsolescence is the enemy of conservation. To make better use of scarce materials, manufacturers need to produce devices that last for years.
- Set up a materials agency. After the 1970s oil crisis, America spearheaded the International Energy Agency (IEA) to ensure the flow of oil around the world. Abraham says we need a version of the IEA for materials, an international forum for managing issues related to rare metals.
- Develop strategic reserves of rare metals. Drawing from the same playbook, Abraham says companies should keep stockpiles of essential materials to guard against shocks to supply — something like the reserves developed in response to the OPEC oil crisis. Governments can offer incentives to companies who comply.
“I would not argue to produce all material in the U.S.,” said Abraham. “But having abundant access to a material and producing locally spurs industries to develop and use that material.”
The United States, by and large, imports lithium and electric vehicle batteries from overseas. China, the world’s largest consumer of lithium and a leading producer of EV batteries, boasts the world’s second-largest lithium reserves. With the Gigafactory ramping up production, the dynamic could shift. Rising demand for lithium could send U.S. producers into overdrive.
For some, clean energy augurs a new era of extraction where rare metals invite all of the same risks as oil — trade disputes, market volatility, environmental damage. But Abraham believes rare metals are essential to warding off carbon pollution and climate change. And robust domestic production is vital to protecting domestic manufacturers against shocks to supply, including OPEC-style embargoes by hostile foreign powers.
In the Rare Metal Age, materials will rule. The next great technological marvel may be conceived in a glittering San Francisco high-rise, but the raw materials needed to build it will emerge from the murky depths of the grittiest mines. Access to the core ingredients of clean energy will shape not only the success or failure of green tech entrepreneurs, but the success or failure of our efforts to halt climate change.
“When there are cuts, there are still ways to get some supply,” said Abraham, “but it’s no way to build an industry critical to the future of saving the planet.”
Jeremy Deaton writes for Nexus Media, a syndicated newswire covering climate, energy, politics, art and culture. You can follow him at @deaton_jeremy.
