Legal Commentary

Mining for Green Power

By Jonathan H. Adler

The NYT reports on how the push for environmentally friendly power soruces has driven up demand for rare-earth elements, which can have environmentally unfriendly consequences.

There are 17 rare-earth elements ? some of which, despite the name, are not particularly rare ? but two heavy rare earths, dysprosium and terbium, are in especially short supply, mainly because they have emerged as the miracle ingredients of green energy products. Tiny quantities of dysprosium can make magnets in electric motors lighter by 90 percent, while terbium can help cut the electricity usage of lights by 80 percent. Dysprosium prices have climbed nearly sevenfold since 2003, to $53 a pound. Terbium prices quadrupled from 2003 to 2008, peaking at $407 a pound, before slumping in the global economic crisis to $205 a pound.

China mines more than 99 percent of the world?s dysprosium and terbium. Most of China?s production comes from about 200 mines here in northern Guangdong and in neighboring Jiangxi Province.

China is also the world?s dominant producer of lighter rare earth elements, valuable to a wide range of industries. But these are in less short supply, and the mining is more regulated.

Half the heavy rare earth mines have licenses and the other half are illegal, industry executives said. But even the legal mines . . . often pose environmental hazards. . . .

The biggest user of heavy rare earths in the years ahead could be large wind turbines, which need much lighter magnets for the five-ton generators at the top of ever-taller towers. Vestas, a Danish company that has become the world?s biggest wind turbine manufacturer, said that prototypes for its next generation used dysprosium, and that the company was studying the sustainability of the supply. Goldwind, the biggest Chinese turbine maker, has switched from conventional magnets to rare-earth magnets.

Executives in the $1.3 billion rare-earths mining industry say that less environmentally damaging mining is needed, given the importance of their product for green energy technologies. Developers hope to open mines in Canada, South Africa and Australia, but all are years from large-scale production and will produce sizable quantities of light rare earths. Their output of heavy rare earths will most likely be snapped up to meet rising demand from the wind turbine industry.

Full post as published by The Volokh Conspiracy on December 26, 2009 (boomark / email).