Episode 76: Rare Earths with Scott Dunn (Noveon Magnetics)

Episode Intro Notes

Outline

• What are rare earths?

• Why are rare earths important?

• Where are rare earth elements found?

• How are rare earth elements acquired, used, and recycled, and what are the sustainability considerations across that life cycle?

• Who are the leaders on the topic of rare earths?

• Are there any notable policies or initiatives related to rare earths and their sustainability?

• How can listeners best engage with and on rare earths?

• Expert Guest: Scott Dunn, CEO, Noveon Magnetics

What are rare earths?

• The term rare earths is likely a new term for you, as until very recently these elements were mainly familiar to geologists and specialized scientists. So what exactly are rare earths? The American Geosciences Institute defines rare earth elements, sometimes called REEs, as a set of 17 metallic elements within the periodic table. These elements have special fluorescent, conductive, and magnetic attributes, which make them very useful when mixed with other metals.

• Specifically, these rare earth elements are the 15 lanthanides along with scandium and yttrium (atomic numbers 21, 39, and 57-71). The term “rare earth” was coined in 1788 by a miner in Ytterby, Sweden who discovered ore that he had never seen before, which upon further study was found to be a new element, yttrium.  

Why are rare earths important?

• These rare earth elements are critical for many applications that we have come to rely on in our daily lives. They play a role in everything from magnets and battery alloys, to glass additives and nuclear fuel rods. In fact, many of these elements are involved in the advanced technologies we use each day in health care, transportation, power generation, and consumer electronics. The US Department of Energy notes that these elements play a critical role in a few main areas: advanced technologies, economic growth, energy independence, our environmental future, and national security.

• Let’s look deeper into a few of the main areas where rare earth elements are used in our lives, starting with advancing technology. If you’re listening to this podcast, you are likely on a phone or laptop, both of which contain rare earths to function due to their conductive and magnetic properties. A phone for example uses lanthanum within the screen to make sure that colors are displayed vividly, while other rare earths like dysprosium are used to make your phone vibrate. Even if you are listening to this podcast in your car, you’re using rare earths! Neodymium, another rare earth, is used for magnets in cars to power the vehicle’s steering and other electronic functions like electric windows, power seats, and sound systems. These magnets are also used within the inner workings of technology for flat screens, polished glass, speakers, and within the circuitry that powers our lives. Some rare earths are even used within LED lighting, camera lenses, and televisions.

• Next, and probably most interesting to you Definers, is that rare earths are a critical input to not just technology broadly, but technologies that support sustainability and the clean energy transition. As we look to mitigate the impacts of climate change and transition to more renewable energy sources, there will be an increased need for technology like wind turbines, batteries, and solar panels. This important infrastructure requires rare earth minerals to work. 

• Many scientists note that decarbonization and electrification cannot happen without these elements. Consider that an offshore wind plant requires 9 times more mineral resources than a gas-fired plant. So as we look to reduce carbon emissions by bringing more renewables into our energy mix, we’ll need to increase our rare earth usage. 

• Additionally, rare earths play a role in electrification of transportation. Minerals like lithium and cobalt, along with rare earths, are cited as key components in combustion powered vehicles and the batteries that power electric cars. Note that electric vehicles are currently only 2% of the global car market. However, with automakers across the globe looking to ramp up production of EVs to mitigate the climate impact of fossil-fuels, rare earths will continue to be important. A 2022 article from Forbes reported that China planned to build 6 million electric vehicles within the next year. That pace would require 30,000 tons of rare earths for just one year’s worth of production for electric vehicles in China. 

• Lastly, rare earths will continue to play a role in defense applications, as a matter of national security, but also as a catalyst to economic growth. In light of this importance, the US Department of Energy is working with other organizations to determine how best to extract, purify, and scale up the production of these critical elements as they are essential in the production of defense technologies like lasers, but also in items like satellites that provide GPS and wireless internet capabilities. 

• As mentioned, these rare earths are critical inputs into the goods and services that are provided within the economy like the consumer electronics, renewable energy technologies, and cars we mentioned. A lack of these materials have negative economic implications by reducing the number of goods and services our economy can sell. It is estimated that the global market for tradable rare earths is between $3 to $5 billion, but the end-market for final goods that use rare earths as inputs is over $1 trillion. So there is a lot of money at stake here!

• A 2022 briefing from the Biden-Harris Administration noted that global demand for critical minerals like rare earths are on pace to increase by 400-600% over the next several decades. And as we have seen through the COVID-19 pandemic, complex supply chains are difficult to maintain. As a result, the U.S. is looking to strengthen domestic supplies of these critical minerals; however, as you’ll learn within this episode, increasing the supply of these elements is a challenging and complex process. 

• The U.S. is not the only country that understands the importance of these metals to economic and political development. EU Commission President Ursula von der Leyen mentioned during her 2022 State of the Union Address that “Lithium and rare earths are already replacing gas and oil at the heart of [the EU] economy.” She continued by stressing that the demand for these materials will increase 5x by 2030 and access to these critical materials is what spurred the recent “European Critical Raw Materials Act,” a 2023 proposal to ensure a more secure and sustainable supply chain for the critical raw materials that are used within the digital and net zero industries along with aerospace and defense.  

Where are rare earth elements found?

• Despite the name “rare earths,” these elements are not actually super rare. In fact, one of the elements, cerium, is the 25th most abundant element of the 78 most common elements within the Earth’s crust. And a few of these elements are actually more common than gold!

• Research from the U.S. Geological Survey in January 2023 details that there are approximately 130 million metric tons of rare earth reserves that have yet to be mined and are currently within the ground. The majority of the resource deposits are estimated to be in Vietnam, Russia, China, and Brazil.

• While these elements are fairly abundant, the process for mining and extracting them is extremely difficult. They are often found in relatively small concentrations on their own and most times are mixed together with other radioactive elements, like uranium, that can be dangerous to handle and hard to purify. Because of this, many of the rare earths come from a very small number of sources and geographies.

• So the rarity of these elements ultimately is due to the difficulty in the extraction and processing of REEs. We’ll dig more into how these elements are mined in a little bit.

• It is important to note here that 2022 research showed that while these minerals may be somewhat abundant across the world, China produces 70% of these minerals and controls the majority of the supply chain. 

• The EU for example, has no major mining of these elements within their nations even though they are extremely important raw material resources for the energy independence and carbon-neutrality that European nations are seeking. Notably, the EU currently imports 98% of its supply of rare earth metals from China. 

• In the United States, Mountain Pass mine, a 400-foot pit within the California Clark Mountain range, is the only rare earth mine in the country and is owned by a company called MP Materials. This mine was the primary global source for rare earths from the 1960s to the 1990s. Today, it supplies only around 15% of the world's production of rare earths.

• Interestingly, the majority of what’s currently extracted within Mountain Pass is sold and shipped to refiners outside of the US. As a result, the majority of rare earths actually used within the US are imported from countries like China (74% of imports from 2018-2021), Malaysia (8% of imports), Estonia and Japan (both 5% of imports), and others. MP Materials is looking to expand its operations to include more production within the U.S. in an effort to vertically integrate and make more domestic this process to lessen future supply chain impacts.

• A bit more on China’s near monopoly on the supply chain for rare earths. In recent years, China has come to control 91% of refining activity, 87% of oxide separation and 94% of magnet production.

• This came to be not only because of the deposits there but the Chinese government also is investing vast resources, both political and financial, into the rare earth mining economy. As a result, it produces the metals at a much cheaper price than the U.S. and others.

• This dynamic is unlikely to change soon. A study from the International Energy Agency found that new mines take over 16 years to actually produce rare earth elements since it takes many years to test the suitability of locations for new mines and construct the infrastructure needed to begin production. Because of these long time frames, even as countries like Sweden and Australia look to expand their own production, the time frames to actually produce these elements create challenges.

How are rare earth elements acquired, used, and recycled, and what are the sustainability considerations across that life cycle?

• While we need minerals for so much of modern life, mining can be an environmentally destructive practice creating a lot of land, water, and air pollution along with deforestation, all of which can ultimately affect biodiversity, ecosystem health, and human health. This isn’t any different for the mining of rare earth elements.

• Most of the ores (i.e., natural rock or sediment that contains one or more valuable minerals concentrated above background levels) containing these elements must be mined using an open pit. This is a process that involves blasting rocks open to break them and expose the ores. The ore is then transported into a concentration plant where the rock is crushed multiple times, treated with chemicals, and smelted to be separated into different parts.

• The process of mining and refining is extremely difficult and highly complex -  there are only a handful of plants around the world that actually process these rare earth elements.

• The process to acquire even small amounts of these elements requires a lot of ore and extraction of rocks from the environment, which alters the natural environment dramatically. Many times the open pits where ore is excavated are left unfilled after extraction. And even when the pits are filled with leftover rock, it can never be returned to its naturally occurring state. This can create changes in the geochemistry of the landscape and can alter the groundwater.

• Further, the current production methods are extremely wasteful. And the waste generated from rare earth operations are not just any types of waste…these wastes can be radioactive or toxic, as rare earths are often found in combination with hazardous materials. The by-products of mining can seep into groundwater or pollute the air causing both environmental and health hazards. In fact, recent research suggests that for each ton of rare earths that are produced, over 2,000 tons of toxic waste are also produced! This toxic waste often is not disposed of properly and includes dust, waste gas, wastewater and radioactive residue.

• Much of the soil and water in the heavily mined regions of China are polluted with arsenic and fluorite due to the intensive mining practices. This contamination has affected the people living in this region causing skeletal conditions and arsenic toxicity to the residents.

• In fact, the world’s largest rare earth mine, Bayan-Obo in China, has a wastewater pond with over 70,000 tons of radioactive thorium that is being stored without a proper lining. 

• As an added layer here, there are environmental justice implications associated with mining. The majority of the people most impacted by mining of these critical materials and facing the brunt of the health issues in the more developing regions of China and other countries, are not the ones who are benefiting most from the technological advancements these materials bring.

• There is an interesting 2020 article published within the International Journal for Philosophy of Chemistry that goes into the ethical considerations of mining for rare earth elements from an environmental and intergenerational justice lens. We’ll link to it in the show notes on our website sustainabilitydefined.com if you’re interested in learning more about this topic.

• So you may be thinking, continuing to mine for these metals doesn’t seem sustainable - and you’re right. We should not solely be relying on new mines because of the complex environmental and social issues surrounding mining and production. Because of this,  current research and technological advancements are looking to remedy the current issues in mining for these elements.

• For example, researchers at Harvard University have worked to develop a method to extract these metals using bacteria and filters with lower acidity than conventional chemicals. Researchers expressed that this is a “radically different” way to separate these materials and can potentially revolutionize how we recover rare earths in a way that is much kinder to the environment. 

• There’s also a group out of China that has developed, and tested on tons of soil, an approach called electrokinetic mining that relies on electric currents to free the rare earth elements, sharply reducing the need for polluting chemicals. 

• Some companies are looking to reduce the use of rare earth elements altogether. In March of 2023, Tesla announced that their next generation of electric vehicles would be created without the use of rare earths. The company has focused their attention away from these materials in an effort to reduce environmental impacts and supply chain risks. While there are a few alternative materials Tesla is looking into, like iron and nickel-based materials for magnets, some of these technologies are still in early development. 

• Another approach is finding rare earths in manufacturing byproducts.

• Researchers at Washington University in St. Louis have created a proof-of-concept solution to extract rare earth elements from coal fly ash–a fine, powdery waste product from the combustion of coal. This novel extraction process uses supercritical fluid, commonly used to decaffeinate coffee, to recover rare earths from material that would have otherwise been discarded in a landfill. 

• Other companies are looking into ways to recycle rare earths and then, in turn, use the recycled metals within their products. If you are excited about rare earths recycling, and we know you are, then make sure to stick around for our interview with the CEO of Noveon Magnetics, a leading REE recycler. While rare earths can be recycled, a 2018 study found that only about 1% of all rare earths are recycled from their end-products. The other 99% of these important elements are thrown away as waste after the consumer use phase. This shortage of recycling is due to many reasons, but a main one is that there is often a lack of collection infrastructure available to get these materials back at the end of consumer use, especially as many of these elements are used in such small quantities within products. And even when these products are collected, the rare earths are often of too small a quantity to recover and recycle.

• Companies are starting to think more about how to recover these important components at the end-of-life for products as the supply chain issues continue and they look to improve overall sustainability performance. With large amounts of rare earth’s already in existence, if they can practically be recovered and recycled, there can be less supply chain, environmental, and social impacts.

• One company making progress on recycling and recovering rare earths is Apple. In April of 2023, Apple announced that it is working to expand the amount of recycled materials within all of their product lines and reduce their reliance on newly mined materials. This includes a goal from the company to have all of the magnets within Apple devices be sourced entirely from recycled rare earth elements. During the announcement, Apple mentioned that magnets are the biggest use of rare earths for the company. In 2022, Apple had already made some pretty significant progress towards these goals. At year-end 2022, the company reported that over 66% of all aluminum and about 73% of the rare earths used by the company within iphones, ipads, apple watches and computer models were made from recycled materials. 

• This progress was due in large part to those iphone take back and trade-in programs. Apple has created their own internal supply chain to get products back after use. Apple then uses robots and other technologies to disassemble their own products and separate the components to allow specialty recyclers to recover these in demand materials, especially rare earths, which the company noted are often lost within traditional electronic recycling. So those iphone trade-in programs are really critical to advancing these goals for the company, not just for saving consumers a little bit of money.

Who are the leaders on the topic of rare earths?

• There are a few key organizations working globally on rare earths. One organization, the Rare Earths Industry Association (REIA), is an international non-profit based in Belgium that represents the entire rare earths value chain. Importantly, the REIA is looking to develop an updated life cycle analysis for rare earth production so that policymakers and businesses can better understand their environmental impacts and make better decisions about the production and management of these materials. They also have goals for this data to be incorporated into the life cycle assessments for all of the end use products these materials are utilized within.

• In June 2023, the REIA hosted its annual conference and general assembly in Barcelona, Spain. The conference brought together key stakeholders from the industry to learn about the latest developments, solutions, challenges, and technologies. 

• Another organization, the Consortium for Rare Earths Technologies, also known as CREaTe, is an organization that is working to develop technologies for “extracting, processing, reclaiming, and finding alternatives” for these rare earth elements. CREaTe is looking to invent technologies that not only improve the feasibility of these elements, but also to reduce their environmental impact. While a fairly new organization, CREaTe has over 120 members with expertise across the rare earths supply chain in the U.S. from end users to processors to universities. 

Are there any notable policies or initiatives related to rare earths and their sustainability?

• While a key pillar in International Energy Agency’s comprehensive approach to mineral security is mainstreaming higher environmental and social standards, most policy is related to increasing its production rather than improving sustainability.

• For example, a bipartisan bill recently considered in the U.S. Congress, the Rare Earth Magnet Manufacturing Production Tax Credit Act of 2023, would create a tax credit for rare earth magnet production in the United States. It includes a $20-a-kilogram credit for U.S.-made magnets, while manufacturers sourcing 90% of their component parts from U.S. producers could be entitled to a $30-a-kilogram credit, with both credits phasing out at the end of 2025.

• Some policies are looking to improve sustainability by increasing transparency.

• Canada’s Critical Mineral Strategy released in 2022 says the country “is seeking to advance efforts that support human rights through collaboration on transparency and traceability in the critical mineral supply chain, as under Canada’s Extractive Sector Transparency Measures Act (ESTMA), and through participation in international activities like the Extractive Industries Transparency Initiative.”

• Related to human rights, there’s also honoring commitments in the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) as part of any rare earth extraction or recycling.

• In August 2022, Indigenous leaders launched the Secure Indigenous’ Peoples’ Rights in a Green Economy (SIRGE). The SIRGE Coalition is focused on full implementation of the UNDRIP, including the right to Free, Prior, and Informed Consent, in all endeavors related to the extraction, mining, production, consumption, sale, and recycling of transition minerals and rare earth minerals around the world. 

• Two potential sources of rare earth elements outside of land on Earth entail regulations that are still in development.

• Lunar mining and asteroid mining could provide sources of rare earths. 

• The Outer Space Treaty of 1967, signed by 113 countries, says that space is free for exploration and use by all countries, and that no nation can claim ownership to celestial bodies, but it’s not clear how this would apply to exploiting resources on the moon or asteroids. The UN has formed a group to develop principles for the exploration and exploitation of space resources.

• Companies are already looking into it. AstroForge, an asteroid mining startup, is planning to launch two missions in 2023 to explore mining asteroids that are thought to have abundant platinum group elements.

• Then there’s deep sea mining.

• The International Seabed Authority is working on finalizing regulations for mining the ocean floor of the deep sea.

• Collecting minerals in the deep sea would require large machines that scrape the ocean floor, generating clouds of sediment and potentially disrupting marine ecosystems.

How can listeners best engage with and on rare earths?

• The Science History Institute Museum and Library details three main ways that we as consumers can make the rare earth economy more sustainable. 

• First, supporting recycling.

• Rather than throwing away or discarding technology, batteries, cars, etc., we must actively ensure they are donated or recycled.

• Also, individuals can support legislation and policy proposals that incentivize and expand technology recycling programs for hard to recycle items like phones and computers, but also things like decommissioned airplanes or wind turbines. While there are small scale recycling and take back programs, like the one we mentioned earlier from Apple, these are not widespread enough quite yet. 

• Second, consumers can support “right to repair” policy and legislation. You may have noticed that sometimes when a component in your technology breaks, it is impossible to fix yourself or cannot be fixed at all, even if the issue is minor. Many times this is due to the fact that the technology is not designed to be fixed or spare parts are not sold to consumers. The right to repair movement seeks to allow for consumers of devices and equipment to freely repair and fix their products, rather than opting for buying new products when something can just simply be fixed. By fixing existing technologies, consumers can in turn minimize the production of new materials like rare earths.

• If you’re interested in supporting the right to repair legislation in the U.S., you can check out repair.org to follow current legislation, get involved on the topic, and engage your legislators. 

• And lastly, we can all become more informed consumers on the topic of rare earths. Just by understanding where the technologies we use come from and the importance of rare earths in our lives, we can make better choices about how we use and consume. Collectively we can also let policymakers and companies know that we are interested in increased transparency on the use of rare earth elements and increasing the sustainable use of these materials is important.

• For more on sustainability and transparency, check out episode 74.

Expert Guest: Scott Dunn, CEO, Noveon Magnetics

• Scott Dunn has been the CEO of Noveon Magnetics since January 2016. Noveon is a U.S. manufacturer start-up based out of Texas that recycles discarded rare earth magnetic material to produce cutting-edge, high-performance “EcoFlux” magnets, which can be used to power the batteries in EV motors, wind turbines, and other sustainable applications. 

• Scott oversees strategic planning and capital allocation for the company and has been featured in Forbes and Fortune. Scott’s experience is in manufacturing with a background in environmental science and interests in geopolitics and natural resources. Scott is a conservationist who believes in economic freedom and technology. He embraces a cornucopian worldview, which means he believes technology and innovation can solve environmental and resource challenges posed by our growing population.