New research presents an alternative to mining for essential rare earth metals : The Indicator from Planet Money Rare earth metals are everywhere – in cars, drones, the device you're listening on right now — and China has the market cornered. But a new laboratory breakthrough could level the playing field.

For sponsor-free episodes of The Indicator from Planet Money, subscribe to Planet Money+ via Apple Podcasts or at plus.npr.org.

An end to China's rare earth monopoly?

  • Download
  • <iframe src="https://www.npr.org/player/embed/1134110697/1134174734" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

SYLVIE DOUGLIS, BYLINE: NPR.

(SOUNDBITE OF DROP ELECTRIC’S "WAKING UP TO THE FIRE")

DARIAN WOODS, HOST:

This is THE INDICATOR FROM PLANET MONEY. I'm Darian Woods.

PADDY HIRSCH, HOST:

And I'm Paddy Hirsch. At the heart of every piece of machinery powered by electricity lies the humble magnet. Of course, you know this from your physics class in high school, Darian, right?

WOODS: Oh, yeah. I was in the front row.

HIRSCH: Anyway, most magnets, like the one in your battery-powered clock for example, are cheap and easy to produce. But the magnets in high-tech machinery like electric vehicle motors or, I don't know, space shuttle turbines are very different.

WOODS: These so-called permanent magnets are subject to intense heat and pressure. And to make the really high-end ones, you need a special ingredient - rare earths. These are elements that can be hard to find and are even harder to extract and refine.

HIRSCH: Yeah. And the vast majority of rare earths right now are produced in China, which means that China dominates that market. Recently, however, scientists discovered a way to produce a metal in a lab that could be used to make high-end magnets without using rare earths.

WOODS: The metal is called tetrataenite. And on today's show, we're going to find out what it is, how it's made...

HIRSCH: ...And how it came from space.

WOODS: That's right. And we're going to hear how it could transform not just the market for rare earths and permanent magnets but the balance of technological power between China and the West. That's all coming up after the break.

(SOUNDBITE OF MUSIC)

HIRSCH: To understand all about tetrataenite, we called up one of the scientists who helped make it in the lab.

LAURA HENDERSON LEWIS: I am Laura Henderson Lewis. I am professor of mechanical engineering and chemical engineering at Northeastern University in Boston, Mass.

WOODS: We also caught an investor who tracks technologies that use rare earths.

JONATHAN HYKAWY: My name is Jonathan Hykawy, and I'm the president of Storm Crow Capital Ltd.

HIRSCH: Jonathan is tremendously excited by the news that scientists may find a way to create a metal that could remove the need to use rare earths in some high-end magnets.

HYKAWY: This new discovery, this tetrataenite announcement, is one of the most interesting things I've seen in the space, and I look at a dozen of these sorts of discoveries a week. Ninety-nine point nine percent of them will never become commercial. This one actually might.

WOODS: Tetrataenite is not an unknown metal, but Laura says it is pretty extraordinary.

LEWIS: Tetrataenite is a cosmic mineral, and it was first discovered and named in the 1980s.

HIRSCH: And when Laura says tetrataenite is cosmic, she means that in its natural form, it literally comes from outer space.

LEWIS: It's only found in a few meteorites. Some of them are in the Smithsonian.

WOODS: It's made out of two common metals, iron and nickel, which bonded and cooled over a very, very long time while the meteorite was spinning around up there in the cosmos.

LEWIS: And that doesn't happen very quickly naturally. So it can take up to, you know, many millions up to a billion years to form a large piece of tetrataenite.

HIRSCH: And replicating a billion-year cooling process in a lab is challenging and, perhaps not surprisingly, rather expensive.

WOODS: I mean, good luck getting a lease for that length of time.

HIRSCH: (Laughter) Yeah. But Jonathan Hykawy says the benefits are potentially huge. That's because iron and nickel are dirt cheap compared to rare earths like neodymium or terbium that we currently need to use when we make high-performance permanent magnets.

HYKAWY: Today, neodymium oxide is trading at about $100. It's $104 a kilo. Terbium oxide, which is one of the materials that allows magnets made with it to function at much higher temperatures than it normally would, that's trading at something like $1,900 a kilogram.

WOODS: But nickel and iron, on the other hand, trade for less than 25 bucks a kilogram. So you can see the cost-saving implications here if we can make permanent magnets out of such inexpensive materials.

HYKAWY: It's got the possibility and the potential of actually crippling the existing rare earths market.

HIRSCH: Crippling? Wow, that's...

WOODS: You heard it here first. Watch out, rare earth market.

HIRSCH: Yeah. And rare earths are expensive not because they're difficult to mine, although some are. The problem is that they're usually combined with other materials, and it's the process of separating them to get that raw element that's so difficult.

HYKAWY: You dig the ore out of the ground. You grind it. You beneficiate it. You pull out those rare earth-bearing minerals. You subject them to an acid leach to pull the metals out. Getting the individual rare earths out is extremely difficult.

WOODS: The U.S. used to be a leader in the rare earths business back in the 1980s, but Laura says that production was so expensive and so messy that the U.S. decided to outsource to China.

LEWIS: So not only was China blessed with a large deposit of rare earth elements - it's in inner Mongolia - but they were also willing to put in the infrastructure to separate these elements. And the U.S. was not so particularly interested in doing that, especially if China would do it for a reduced overhead because the processing is not particularly environmentally friendly.

HIRSCH: And 30 years on, Jonathan says, China effectively owns the rare earths market.

HYKAWY: Almost all of the processing in quantity in terms of separating out pure neodymium oxide, pure praseodymium oxide or a mix of the two that's pure enough to be used in magnets is done in China. Almost all of the conversion of those oxide materials to metals is done in China, and a very large proportion of the actual magnet alloy manufacturing is done in China.

HIRSCH: China controls more than 71% of the world's extraction and 87% of the world's processing capacity of rare earths. It also makes more than 80% of the world's permanent magnets.

WOODS: Jonathan says that if tetrataenite is a viable success, most permanent magnets could be produced at a fraction of their current cost. That would turn the magnet market on its head and also the market in rare earths.

HYKAWY: This is going to be a fairly big disruption to a lot of companies. The Chinese companies or the producers are going to have to start worrying about what their economics are going to look like if they're only selling a fraction of the amount that they used to.

HIRSCH: The magnets that go into your electric scooter or your air conditioner would be cheaper, which would be a win for consumers. But there could be a big downside. Some rare earths could end up becoming more expensive because there would be less incentive to mine and extract them.

WOODS: And that could be a problem for a range of other industries, and that's because rare earths aren't only used in magnet manufacturing. They're also key components in all kinds of high-tech applications, from fiber optics to radiation scanners to advanced military equipment.

HYKAWY: If suddenly the rare earth industry can't afford to dig the material out of the ground because we can't sell magnet materials, the availability of things like lutetium, erbium for the fiber optic industry and some of these other small quantity, quite rare, rare earths is going to suffer as a result.

WOODS: And these markets aren't huge. The rare earths market is somewhere between $12- and $16 billion a year. And just for scale, that is about the size of the global market for gin.

HIRSCH: Oh, really?

WOODS: Permanent magnets, that's about 34 billion, which is about the size of the global market for orange juice.

HIRSCH: Somewhat less interesting. So the disruption of either the magnets market or the rare earths market wouldn't hurt China that much financially. But strategically, that's a whole other question. The demand for high-end permanent magnets is growing fast, and these magnets are vital to all sorts of products that are going to become increasingly important as the world transitions to a clean-energy economy. So of course, I'm talking about things like electric vehicles, industrial air conditioners and wind turbines.

WOODS: And so it's in China's interest to stay on top of the markets in magnets and rare earths, and the U.S. knows it. And that's why there's been talk about America moving back into the rare earths business. But the U.S. only has one mine running at the moment. That's in California. And bringing new facilities online will take years.

HIRSCH: Which makes the lab production of tetrataenite look kind of like a gift of magical alien technology from outer space, which it sort of is - just without the aliens. But Laura Lewis at Northeastern says it's no quick fix.

LEWIS: Having this is not the same as having a magnet. I often use the analogy - you may have a material to make a brick, but you have to put the bricks together to make a wall. And then that wall makes the Taj Mahal.

WOODS: She says there's no guarantee that the lab tetrataenite will work as well as the tiny bits of metal mined from the meteorites. Even if it does, nothing will happen overnight.

HIRSCH: Yeah. Best case, she says, it could be five to eight years before tetrataenite could make a meaningful difference to the magnet-production business or to the rare earth markets. Until then, the race is on to compete with China and to secure new sources of rare earths - far in the Australian desert, deep under the seabed in Japan, maybe in outer space.

WOODS: I mean, once you've run out of land, that's my guess as where you have to go.

HIRSCH: It is the final frontier.

WOODS: It is, after all, the final frontier.

(SOUNDBITE OF MUSIC)

HIRSCH: This show was produced by Noah Glick with engineering from Maggie Luthar. Dylan Sloan checked the facts. Viet Le is our senior producer. Kate Concannon edits the show. And THE INDICATOR is a production of NPR.

WOODS: Is it meteorite or meteoroid, Paddy?

HIRSCH: So here's the thing - when it's in space, it's a meteoroid.

WOODS: OK.

HIRSCH: When it hits the atmosphere and it burns - you've got that shooting star thing - that's a meteor. And if it survives that and it hits the Earth, that is a meteorite.

Copyright © 2022 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.