August 27, 2013

Baotou Rare-Earth and Vestas Wind Systems sharing a dirty secret?

by Taras Berezowsky on August 27, 2013 |

Rare earth mining companies such as Lynas Corporation pay lip service to the fact that rare earths is a dirty, dirty business – but it’s not necessarily easy to toe the line between environmental fiascos and growing demand/profitability.

MetalMiner’s weekly report highlighting the price trends of rare earth metals comes out later this morning, and upon seeing what the latest movements are, we’ll be able to better tell if the recent increases in price over the summer are firming up and becoming sustainable.

However, the nagging environmental questions around rare earth mining (and the further-downstream activities that rely on it) remain.

Lynas Corp., Molycorp and other western producers of REEs are hoping that demand and prices remain supported in the medium-to-long term, especially if statements such as these hold true: A study conducted by IHS Chemical, based in Houston, Tex., estimated “that from 2012 to 2017, global demand for rare earth products will grow by 7.6 percent annually and reach more than 150,000 metric tons, with China leading consumption growth at 8.3 percent annually,” according to a story run by ThomasNet.

The author of the story, David Sims, lays out an argument that implicates the renewable energy industry in very dirty doings – no, not the type of stuff that Anthony Weiner/Carlos Danger would do; but in fact, literally sullying the environment by using raw materials in the manufacture of solar panels and wind turbines (by the likes of Vestas Wind Systems) which in turn are extremely environmentally unfriendly to produce.

Mining REEs Pollutes – Is This News?


MetalMiner has reported on rare earth mining pollution extensively, with stories of China’s biggest producer, Baotou (or Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co Ltd., if you’re into full names) leading the way not only in output but in polluting the countryside, with innumerable “cows, horses, chickens, and goats, killed off by the toxins.”

Also not news? That so-called “clean energy” isn’t so clean. As Sims alludes to in his article, the “do-gooder-ism” of the renewable energy sector (“tiny carbon footprint!”) may be far outweighed by the carbon footprint of producing rare earths, a sizable component of turbines and panels.

The Takeaway

To circle back to Lynas and Molycorp, there could be an interesting takeaway here, especially when it comes to light REE production viability and pollution.

“I predict that only one of the two large-scale existing light rare-earth producers will survive. I don’t know yet which one I would pick between Molycorp and Lynas,” wrote Jack Lifton in his most recent rare earths outlook post on Technology Metals Research.

Although Lynas, producing primarily in Asia, has come up against pollution backlash, Molycorp operates in the U.S. – potentially a more stringent legislative environment.

As Sims writes: “The irony is rather hard to miss – proponents of wind power demand stringent environmental standards on our domestic coal and nuclear industry, but seem strangely unconcerned at the appalling environmental conditions necessary to supply their rare earths habit.”

If full-scale REE production comes into these proponents’ backyards, perhaps “Advantage: Lynas”?

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