Oil scarcity leads us to electric cars which leads us to Neodymium scarcity

Just came across and wrote a story about Peak Neodymium .. see: Oil scarcity leads us to electric cars which leads us to Neodymium scarcity

A metals industry analyst is raising an alarm over the use of rare earth materials in electric vehicles. For example Neodymium and certain other materials are used in high power magnets required to make electric motors with high power to weight ratios. The thing is that China pretty much controls the rare earth materials industry. This metals industry analyst is pointing to how the move to electric vehicles and wind turbines will cause a supply crunch.

I read a dozen articles to write the article I wrote (linked above) and none of them looked at the peak resources angle.

Obviously to anybody who has read Peak Everything the real issue is Peak Neodymium, right? It doesn't matter whether China controls the market or not, what matters is there is a limited supply of Neodymium and other materials.

Well now, here's the thing! As with all 'peak'theorising, the articles are usually written and evangelised by people who either, couple conspiracy theories with poor scientific research, or alternatively, make the old mistake of creating facts from a theory, instead of a theory from facts.

It is true that China has the largest known reserves of rare earths. It is also true that china is moving to cease the export of what they see as a strategic national resource.

So do we have Peak rare earth? Panic, panic, sky is falling !! Doom!(smug self satisfied knowing approval from the green left)

But, have you noticed the flaw in the 'peak theory?' Yeah that's it, the they leaft out the word 'known'!

In fact rare earth deposits occur all over the globe. (USA, Australia, Chile etc..) Until now mining development and exploration has not been a real priority for mining investment. With increasing demand (and higher prices), investment in exploration, will led to the development of vast new fields, and the concept of 'peak' will evaporate. In fact, it could very well be the next boom mineral resource!

'Knew a miner, '09 er, down in Australia, dum dee dumm dee da....'

The purpose of "scarcity" is to keep people on edge to they will pay more for products.

Of course it could be that I just watched the movie "1984" and I am wary of Big Brother.

9/4/09
BEIJING - A Chinese official tried to calm unease about curbs on exports of rare earths used in clean energy products and superconductors, saying Thursday that sales will continue but must be limited to reduce damage to China's environment.

China produces nearly all the rare earths used in batteries for hybrid cars, mobile phones, superconductors, lightweight magnets and other high-tech products. Reports of a plan to reduce exports sparked concern about the impact on industry abroad.

Beijing will encourage sales of finished rare earths products but will limit exports of semi-finished goods, said Wang Caifeng, deputy director-general of the materials department of the Ministry of Industry and Information Technology.

Exports of raw ores already is banned, and said that will continue, Wang said at an industry conference.

Wang refused to confirm Chinese news reports that this year's exports will be cut to about 8 percent below 2008 levels and future exports will be capped at similar levels. She said a plan will be be issued later this year.

"China, as a responsible big country, will not go back and will not take the road of closing the door," Wang said.

But she said China has to limit output to protect its environment. She said production of one ton of rare earths produces 2,000 tons of mine tailings.

"China has made a big sacrifices for rare earths extraction," said Wang, who said she has spent her whole 30-year career overseeing the industry. "It has damaged our environmental resources."

Wang spoke at the Minor Metals & Rare Earths 2009 conference, cohosted by China Chamber of Commerce of Metals Minerals & Chemicals Importers & Exporters and Metal Pages Ltd., a London-based metals trading and information company.

China accounts for 95 percent of global production and about 60 percent of consumption of rare earths, which include such metals as dysprosium, terbium, thulium, lutetium and yttrium, according to the U.S. Geological Survey.

The United States supplied nearly all its rare earths needs from its own mines as recently as 1990, according to the USGS. But it says output plunged after the market was flooded with low-cost ore from China, which has lower labor costs and less-stringent environmental controls.

China wants to develop its industries to process rare earths and create products from them, Wang said.

China banned new wholly foreign-owned processing ventures in 2002 but some French and Japanese companies set up operations before that, Wang said. She said new foreign investors will be required to work through joint-ventures with Chinese partners.

Last year, China exported 10,000 tons of rare earths magnets worth $400 million and 34,600 tons of other rare earths products worth $500 million, according to Wang.

China used 70,000 tons of rare earths in 2008 out of reported total global consumption of 130,000 tons, Wang said. She said she believed global consumption was higher than indicated by the official statistics.

China's demand for rare earths has surged as manufacturers shifted production of mobile phones, computers and other products to Chinese factories.

The United States and European Union have objected to similar Chinese controls on exports of other industrial materials. They filed a World Trade Organization complaint in June accusing Beijing of improperly favoring its industries by limiting exports of nine materials including bauxite and coke in which it is a major supplier.

---

Associated Press researcher Bonnie Cao contributed to this article.

The Associated Press

Actually it's not true that peak theory people leave out the word 'known'. At least not if you go to the ASPO conferences. They do discuss the rate of discovery and have theorising about the potential for new discoveries. The peak of oil discovery however occurred in the 1960's. How likely is it there will be new large oil discoveries?

The known deposits of mineable rare earth materials are N (whatever N is) and there is some unknown set of deposits of mineable rare earth materials. Add those together and you have a total amount of mineable rare earth materials, let's call that T. Okay? Clearly that amount, T, is fixed in size even though we don't know the size. Clearly in addition that at any rate of use eventually the deposits will run out. "If molly has 100 apples and eats one apple per day, how many days before Molly has to go to the store to buy more apples?" The problem in this case there isn't a store where you can buy a new planet full of rare earth materials, is there?

The numbers also show that due to expected demand increase the known supply shrinks from 8000+ years to 400+ years. And further we can expect demand to only increase as time progresses meaning the lifetime of the known reserves will shrink even further. (our dear friend Molly is deciding to go on an apple eating binge and eating more and more apples per day)

Other articles such as China's precious metal reserves threatened quote Chinese officials as describing these materials as non-recyclable. So it's not like the materials will be embedded in products and from which the materials can be extracted and reused in other products.

I apologise for the edit, I have attempted to your very well reasoned and research argument in the interests of relevancy to my comments.

My dispute with most 'peak theorists', is that they invariably get it wrong. Oh, I know if you wait long enough on a finite planet, eventually they must be right. however,I am old enough to remember the absolute conviction of the left elite and the complete conviction of my fellow university students, fanacticaly proclaiming the unasailable prediction by the "Club of Rome " that 1977 would bethe year "the Stork passed the Plow' this conclusion was based on intensive research, mathmatical extrapolation by the new IBM computer bank, and the conclusion was not only unarguably accurate, but the culprit was obvious! Bad capitalist practise and uncontrolled Western population explosion. The conclusion also extrapolated a dark vision for the future of West, and the only hope coming from the agricultural practises of the USSR and Maoist PRC. This well respected think-tank predicted that the collape of western civilisation was inevitable.

Ironically, in 1977 the west suffered from over food production and the beginning of a decline in the birth rate, (we are after all not rabbits of kangaroos), and large scale collapse of agriculture in the east! Now call me an old cynic, but I have never heard any of those esteemed individuals admit they were simply wrong!

The same absolute fervor is displayed by the "human industry is the sole cause of global warming" Their argument may be correct or otherwise, but abusing sceptic's and labeling tose voices of sceptisim as "climate change deniers", smacks of McCarthyism.

I would greatly dispute the 'peak theory' of any natural resource, (except possibly helium). We live on a vast planet, with enormous untapped resources. Even those resources that are becoming increasingly difficult to find, are extended by rapidly developing consumption technologies.

Your example of Molly's apples sounds convincing! That is until you start adding real life market factors, IE: Molly has 100 apples. But what if: 1) some apples are larger than others and are consumed over two day's? 2) Molly is sick of her diet of apples, and substitutes one pear every three days? 3) Molly discovers a new method of apple nutrient technology, and extends the value of one apple by 11 days? 4) She finds an apple tree in the back yard ? 5) Rising apple prices quickly curb her appetite for apples? 6) fashion changes mean the fat retardant enzyme in apples keep Molly thin and she decides to limit her apple consumption? 7)Cheap synthesised apple substitute becomes available, and Molly keeps real apples for special occasions, etc, etc ,

Now, none of these factors are included in your equation, and yet, they are certainly evidenced in the oil equation. If you calculate all possible factors, Molly apples' could last her, not 100 days, but 100 years!

The developing uses for rare earths are exciting, so too are the investment opportunities! On my next trip to Australia (warmer than Canada)and Chile, I shall be investigating rare earth mining practices in that vast continent. Hey, with a former rock star as the Minister for Environment, how can I go wrong?

'Knew a miner, '09 er, down Australia, used to hate Uranium
Now he luv's her, she glows so brightly,
Nuclear future... dum dee dumm dee da....'

...

The biological life on this planet has existed for zillions of years with little problem, and they perfected recycling of the basic resources of biological life zillions of years ago. However this one biological species, homo erectus, has decided they know better than biology and creates lots of nonrecyclable objects to clutter the landscape.

It's only been billions of years, unless life has transplanted itself here from other planets, which I think is most likely.
There have been many severe problems due to over-population and pollution throughout the development of our biosphere. Take oxygen for an example: it's really nasty stuff! A byproduct of the excessive flourishing of certain organisms which multiplied too much!
And homo erectus is extinct... ;-)

To get back to Neodymium scarcity (although Molly with her apples is much cuter):-

1) Neodymium based permanent magnet motors are far from the only way to create electric motors. In fact while permanent magnets are one of the simplest they're one of the least flexible (because the magnetic flux is inherently fixed giving a fixed torque/speed trade off).

2) Electric motors last a long, long time.

3) Magnets are far more easily recycled than oil burned while making reciprocal pistons create radial motion.

4) Nice move by China: Step One: kill the competition by dumping cheap ore on the market. Step Two: once prior competition has given up then restrict export. Step Three: (and this is the best one!) claim that the restriction is due to respect for the environment (and, has absolutely nothing to do with driving up the price)

5) Enter a "metal industry analyst" with scare stories of scarcity (hmmm, maybe it was a slow news day?)

My personal conclusion: We have a lot of things to worry about, but Peak Neodymium isn't one of them. Not by a long shot.

And homo erectus is extinct... ;-)

Speak for yourself, Ducky ! Thats just the sort of prejudiced comment which gives Queenslanders a bad name here in Oxford Street, and my friend in San Franscico tells me ....eh.. ooooh.. oops, Sorry, wrong forum!!