U.S. faces rare earth supply chain disruptions in the medium...

U.S. faces rare earth supply chain disruptions in the medium term

Thursday, February 02, 2012 by Anthony David - Critical Strategic Metals
During December 2011, the US Department of Energy (DoE) released the 2011 ‘Critical Materials Strategy’, a report that examines the role of materials such as rare earth metals in the ‘clean energy economy.’

The report cautions that the US runs the risk of facing disruptions in its short-term rare earth supply chain until 2015 at least. Shortage of five critical rare earth minerals—dysprosium, europium, neodymium, terbium and yttrium—could create expensive interruptions in the production of electric vehicles, wind turbines and energy-efficient lighting.

In a statement, the DOE said, “The report found that several clean energy technologies use materials at risk of supply disruptions in the short term, with risks generally decreasing in the medium and long terms. Supply challenges for five rare earth metals may affect clean energy technology deployment in the years ahead.”

Prices of many of the 16 materials analyzed have been far from stable over the last 12 months and some have in fact seen ten-fold price rises.

The pressure on supplies would be further heightened by laws that demand that incandescent light bulbs be phased out.
The 2010 report raised similar fears when China announced its decision to reduce its rare earth export quota. In its wake, the DOE developed the nation’s first critical materials research and development plan.

The result is a $20-million amount in the 2012 spending bill towards advancing projects that develop alternate materials, diversify supplies, develop more efficient deployment of rare metals and enable recycling and reuse.

The report recommends that the US begin development of rare earth extraction, processing and manufacturing capabilities and also collaborate with Europe and Japan in attempts to reduce global scarcity.

PricewaterhouseCoopers (PwC) has also sounded an alarm about the possible supply shortage. The PwC report stated, “Demand for rare earth metals is currently expected to outstrip supply by 30,000–50,000 tons in 2012.

This shortage is likely to result in a decline in production rate of devices and products such as mobile-phones, TVs, military equipment and wind turbines that require rare earth metal made components.”