We call them either l The Diaoyu Archipelago, or the Senkaku Islands - eight rocks a few kilometers wide, located about 200 kilometers southwest of Okinawa. They are uninhabited, and so strategically unimportant that during negotiations for the Treaty of San Francisco in 1951, which established Japan's territorial boundaries, diplomats forgot to mention them. They remained "occupied " by the United States until 1972. Today, Japan claims them, but also China and Taiwan.
These submerged reefs make it possible to make wonderful peaches. During the first week of September 2010, several Chinese trawlers without fishing rights were seen operating in what Japan calls the "Senkaku ". According to various sources, it has been sighted between a single and up to 160 boats. The Japanese Coast Guard were dispatched toescort ships out of disputed waters. Most of them have complied with this request.
Only one has not. The trawler Minjinyu 5179, with a crew of 15 and registered in Quanzhou, struck a patrol boat twice. According to one of the accounts, the captain and his entire crew were intoxicated at the time. In any case, the Coast Guard boarded the ship and arrested the captain.
Price increaseby 700%
What happened next can be seen in the graphic above: China has imposed an embargo on shipments of what are called the "elements of the earth rare "(ETR, or " Rare Earth Elements "in English) to Japanese ports. This embargo has blocked one of the world's most important supply chains, causing the global prices of the types of elements and compounds found in industrial magnets and consumer electronics to rise more than 700%.
At the time, manufacturers of computer components and devices had already taken steps to diversify their supply chains. And it didn 't work though. Because if this industry was non-existent in China at the beginning of the century, the country is now the supplier of more than three quarters of the rare compounds of the world. Why ? Due to a set of circumstances that unfolded billions of years ago, when the crust twander was cooling and the tectonic plates were starting to pull away from each other. Yes, China just happens to be the world's primary source of these much sought after magnets.
The Resource of Owning the Resource
"People don 't 'have no idea where their business is coming from,' remarks David S. Abraham, researcher at the Institute Washington-based New America Public Policy Officer . “They don't realize the complexity of what's in their iPhone, laptop or refrigerator. Countries like Japan and China have a better idea of what it takes to make manufactured goods because that is where production takes place.
In 2017, the White House issued an executive order, calling on federal agencies to develop a strategy to respond to disruptions in the supply chain for rare earths and essential minerals. In the month of mFollowing this, the Home Office published a list of 35 "mineral products which are essential for the security and economic prosperity of the nation". They include common elements like aluminum, cobalt and graphite, uranium, as well as the 17 members of the rare earth group: scandium, yttrium, and the 15 llic chemical elements called lanthanides.
- Scandium (Sc) is a soft and light element which, combined with iodine, produces an agent added to discharge lamps to increase their intensity, and to tint them slightly yellow, such as sunlight.
- Yttrium (Y) is used in several inorganic compounds to produce superconducting ceramics, such as copper barium oxide (YBCO). Last January, to compensate for trade imbalances, China has agreed to buy scandium and yttrium from US mines , although no US mine currently produces yttrium or scandium.
- Among the lanthanides, Samarium (Sm) , an inexpensive rare earth element, combined with cobalt, produces a small permanent magnet (SmCo), powerful and large in size, but prone to scaling.
- Neodymium (nd) is not a particularly expensive item, selling for around $ 70 per kilogram .You may remember that Apple had problems in 2015 with the neodymium magnets used for "feedback " in its Apple Watch and iPhone because they degraded faster than expected. .
- Dysprosium (Dy) is a very rare and very magnetic heavy rare earth element (HREE). been used in reactor bar coolantsnuclear rs. Since then, it has become a basic ingredient for the production of headphone magnets, as well as some lithium-ion batteries to prevent power loss at high temperatures.
In its 2015 book, The Elements of Power : Gadgets, Guns, and the Struggle for a Sustainable Future in the Rare Metal Age , Abraham tells the story of a Fujitsu researcher named Masato Sagawa, who was working on a way to 'add elements to space the neodymium atoms, amplifying the magnetism. He did this in 1983 by adding iron, boron and, to counteract the loss of conductivity at high temperature, between 3 and 6% dysprosium. The resulting NdFeB compound is among the most potent in the world, and this tiny chunk of dysprosium proved invaluable.
Until 2018, when Australia reignedChina was the sole global source of dysprosium, invested in the rare earth market. Myanmar (Burma) entered the market last year, and ironically exported its production to China. Early this year, the United States Department of Defense began supporting mine building efforts on American soil to find dysprosium and other rare earths in Texas and California. Also, the Pentagon has started pushing for legislation that would raise budget spending caps for REEs under the Defense Production Act to $ 1.75 billion dollars.
Yet, according to a letter obtained by Reuters, their efforts had already been halted in April , pending “further research.” This research finally received $ 122 million in funding from the Department of Energy in September, after being combined with an initiative to boost domestic production of more materials. conventional.
Command & Control on rare earths?
Published last March by the Center for Strategic and International Studies, a text by Tobin Hansen (now a junior fellow at the Carnegie Endowment for International Peace), titled "Securing US Access to Rare Earth Elements ", begins with this sentence: "the control of the production of essential minerals necessary for the defense and processes of manufacturing is a new feature of the escalating tensions between statess United and China on trade and security ”. This is the kind of language a Pentagon analyst likes.
Eugene Gholz, associate researcher in the Department of Defense and Foreign Policy at the Cato Institute, refutes this claim. "This is what the market is: a lot of contractual relationships between independent entities, to get the supply of all the things you need - whether it's essential minerals, or the cup of coffee you need. I drank a few minutes ago. I don 't have to own the farm to get coffee.
During the global pandemic - which is arguably the biggest stress test of the world economy in a century - the ETR supply chain appears to have remained strong, and s 'may even be reinforced. It can be argued that if the supply chain had been more diverse and if more customers had relied on pro sourcingcoming from outside China - which has largely recovered from the first wave of the pandemic - the situation would have been more critical.
China's management of this chain of procurement, said David Abraham, "has been a boon to technology companies."
"They have a reliable supply of materials at inexpensive prices. They didn 't have to worry about where these rare materials came from. The fact that China produces (the components that incorporate the rare earth elements) at a low price, because it cares less about the environment or has less labor costs high, allowed them to pass the course. They don't think about things that don't necessarily cost too much. "
Photo Pillars of Zhangjiajie by Dcpeets, under license Creative Commons 4.0.
In the midst of geopolitical and macroeconomic debates, and political questions opposing virtues tolong run from globalization to the short run gains of nationalism, there is a striking fact: the formation of our solar system, which left the Earth somewhat wobbly, tilted and imperfectly shaped, gave China a natural advantage over rare earths several billion years before the first vibrations of iPhones.
How were rare earths shaped?
The magnificent sandstone pillars of Zhangjiajie in southern China are so high and so deep you might think they had to be hoisted by a huge crane. Billions of years ago, the land in this region was actually the bottom of the ocean. Considerable tectonic activity has left quartzite deposits on the surface that have been carved out by millions of years of ebb tide, leaving behind natural mineral skyscrapers, which have been further shaped by erosion.
The Mutianyu Great Wall by CTLiotta, published under Creative Commons 1.0.
Geologists have discovered a silicate clay mineral at the base of these towers. A crisp white called kaolinite, or Al2Si2O5 (OH) 4. It is a fairly common mineral to have been found in what is now southern Iran, in pottery fragments from the ancients. Sumerians, who obviously appreciated its brilliance.In the case of Zhangjiajie, geologists believe that deposits of kaolinite formed when naturally acid rain flowed between these towers, mixing with granite and settling in wet ponds. ponds formed a kind of mixture called "ion-absorbing clay " which surprisingly collected rare earths.
So Zhangjiajie towers can be thought of as co-fingers.losses pointing straight to where the rare earths are. Besides, parts of the Great Wall of Mutianyu , built in the 6th century AD with local materials are said to contain dysprosium.
2006 aerial photo from the Bayan Obo open pit .
Gigantic mines and artisanal mines
In the Inner Mongolia region, north of China, there is a gigantic open pit mine called Bayan Obo - it is the source of half of the world's REE. It is apparently a mine of iron ore. Rare earths are nonetheless mined there, and their sale helps offset some of the cost of producing iron in China. As Eugene Gholz of the Cato Institute told us, ETR production doesn 't 'implies essenThere is no cost that has not already been allocated to extracting the iron ore. “Mining costs are an insignificant fraction of the cost of rare earths.
In southern China, where all the colossal pillars of rock are found, "mining " - if you can call it that - is being done on a surprisingly large scale. small. As first reported on New York Times in 2010 , illegal dysprosium mines regularly appear. At least a third of HREE mines in China, says Eugene Gholz, are illegal and operated without a license. Additionally, according to a recent report from Yale University , these small mines are the source of large-scale environmental disasters. Because the watersWaste that comes from these mines flows downstream into rivers, taking with them everything rare earth miners don't need or want - for example uranium.
"These are people," says Eugene Gholz, "who dig a hole in the ground, pour acid into it, wait for the acid to react with the soil and remove the rare earths, which float out of it. at the top, then skim it off and leave puddles of acid in the ground. Entire families do this for a day or two at a given site. They dig a hole, they throw in the acid, and they collect the rare earths. And they left before the security forces arrived. ”
Aerial photographs reveal the damage these illegal miners leave behind. "It 's cheap," says Eugene Gholz, "if you are willing to put up with poor working conditions, environmental devastation, resale to organized crime - and all the rest.nneries that go with it ”.
The land of 5 fingers
Photo from pic of the five fingers to Zhangjiajie by chensiuyan, released under the GNU 1.2 Free Documentation License.
For various reasons - some geopolitical, some cultural, and some inevitably geological - China has gained a natural advantage in the production of rare earths. For Australia, the United States or any other country, launching a competitive rare earth market would require investment in processes, more environmentally friendly mining skills and equipment. But they should also take into account that they would probably drill in limestone and not in sandstone. In short, it would cost a lot more thando it in China.
And that, as Dr Sherman Robinson of PIIE told us, automatically puts any new player at a disadvantage in a global market. A high-cost producer, he says, cannot export. Jobs are disappearing, and customers are shifting their supply chains to bypass them. Sustaining a market that cannot contain itself, like the tobacco market, would require government subsidies - perhaps permanent.
So the question is how lucky is China? in the rare earth market is sustainable.
The graph at the beginning of this article seemed remarkable at the time for its peak, like one of the giant pillars of Zhangjiajie. Perhaps its most prominent feature today is how this peak collapsed. After the Japanese embargo was lifted, China began a process of stockpiling ETRs, building up such a large stock that it weathered the shocks of demand.after confinement. And there has been no rare earth supply crisis since.
At the same time, however, China's position could be untenable for China itself, and this very soon. Rare earths have high commercial values only when there is a crisis that China can control, like a fishing trawler triggering an international escalation. In the event of a pandemic, on the other hand, the country must keep prices low to preserve market stability in the context of a global economic crisis.