The only way humanity can subsist on planet Earth is by aligning with commercial and survival practices that are ecologically sustainable, and which do not overly disrupt our natural environment. We cannot live except for in the world we have, and society as we know it cannot be put on pause while we try to prepare and implement a more ecologically-sustainable alternative; progress towards natural balance will be ongoing, uneven, and economically painful to many of the foundations of capitalism-as-usual which have been terminally embedded in antiquated modes of commerce. And though humans can change much with will power alone, we cannot change our modern “need” for certain raw materials that we must dig out of the ground, with no naturally existing alternatives.
The mix of resources required for human society is constantly shifting and changing. Some materials, like iron, sand and limestone, are fairly constant and have been implemented into all modern cities in large abundances, particularly in major civil architecture projects and the cement-based transportation networks that connect cities and towns into a national economy. As time unfolds, advances in technology introduce new ways to apply new materials to the process of modern city-building; for example, the newest development methods substitute in lighter yet incredibly strong steel, aluminum and other nickel, copper, and zinc metal alloys with myriad beneficial qualities like corrosion resistance which helps them to last longer. But this is just the tip of the iceberg. Technological progress has also revealed much more mind-boggling manufacturing possibilities made possible with the use of very particular minerals, many in a category referred to as Rare Earth Elements, or Rare Earth Oxides (REO), see: below.
Extraction, as a process of acquiring critical minerals that have been located in the Earth’s crust through massive mining operations, will go on. If we want to live in a “green” future, powered by super-advanced eco-friendly technologies that allow us to harvest energy in sustainable ways from non-polluting sources, we must first build those “green” machines and cities from critical minerals that we dig out of the ground and use for manufacturing on a massive scale. The world that we currently have, as built by the prevailing powers of capitalism-as-usual over the past century, has been built to accommodate a fossil fuel-centric infrastructure; transitioning to a society powered by alternative energies is an extensive process that we have only just begun, and which will ultimately require the dissemination of green technologies to nations around the globe that dwarf what has already been accomplished by hundreds or even thousands of times over. We need much, much, much, much more of the “good” technologies that are emerging to supplant the antiquated ones, and there is no better alternative, at least known to current modern science, to replace the critical minerals we need at a scale that could be helpful.
If we expect to live in a future where we add significantly less volatility to our Earth system, we are going to have to dramatically expand the amount of green technology that gets used on a planetary scale, and extraction and mining efforts must realize correspondingly significant increases to provide those raw materials. Of course, this is not ideal, especially for localized populations who are disproportionately disadvantaged by environmentally devastating mining operations, but the alternative, a volatile and inhospitable planetary surface, is far worse.
Rare Earth Oxides (REO) and Critical Metals
Rare Earth Oxides (REO) are certain chemical compounds scattered throughout the Earth’s crust that have very rare and extraordinary properties when applied in certain mechanical and electronic ways. They are mixed up with all the other “rocks” in the ground in different concentrations across different areas of the surface of the planet; most of them are very unevenly distributed, with some only known to naturally occur in geographic formations within a single nation’s borders.
In brief, there are 17 Rare Earth Oxides: atomic numbers 57-71 on the atomic table (termed the “lanthanides”) plus scandium and yttrium. Roughly a third of the known and confirmed “reserves” of these chemical compounds are thought to be underground within Chinese borders. Nearly two thirds of the production of REO materials has come out of China in recent years.
Technologies produced with the special advantages of REO are the very things that make the modern society actually modern as we know it to be: they are what allow man-made robots to thrive in the cold vacuum of space; they are what allow us to sharpen the precision in our lasers, optics and sensors; they enable the use of rockets and hypersonic jets and wind turbines; they are intrinsic to the advances of next-gen batteries and semiconductors, and the supercomputer chips necessary to power machine learning and AI; they are integrated into EVs, solar panels and wind turbines and potentially any and all new green technologies; and they are vital to manufacturing and maintaining the most advanced military and defense equipment. REO-incorporated technology will be increasingly embedded into the future in countless ways.
A list of 50 minerals (including the REOs) that are highly critical to modern economic development was publicly released earlier this year by the United States Geological Survey (USGS) of the US Department of the Interior, the preeminent provider of data on mineral and natural resources, both domestically and globally, to the federal government. Clearly standing apart in significance, aluminum is critical to virtually every economic sector. An economy without access to these minerals is an economy that is less than modern—unable to compete in the modern world, let alone even build one.
[The planned budget for ‘23 for the USGS is roughly USD$1.7B, making it very likely the best funded and most extensive mineral data provider in the world. Helpful expansions have been approved for next year’s budget with
multi-million dollar increases specifically directed to “Energy and Mineral Resources Programs”, to further expand critical mineral supply chains, renewable energy sourcing, and other necessary and eco-sustainable activities related to our energy-centered future. We highly recommend the use of USGS mineral data.]
The total amount of global REOs in the ground is roughly calculated with the term “reserves”, which is actually an imprecise notion, despite the analytical purpose of the metric. Reserves are, supposedly, the amount of the chemical
compound that is “known” to be in the ground in specific geographic locations. However, claiming and verifying reserves is an inconsistent process across nations and companies, and many mining operators have a very strong
financial incentive to either declare or omit what they may know about what’s under the ground of the land they own in order to manage the price expectations of the commodities they are selling. This behavior is fundamental to capitalism-as-usual, so since the true accounting of REOs in the ground prior to extraction can never be objectively determined or
universally agreed upon, it can reasonably be assumed that all extraction operations are controlling access to their land and “managing” their claimed reserves in order to manage their own company’s ongoing solvency. Furthermore, REO producers and suppliers from the PRC, the world’s current REO behemoth, are generally required to report based on quota metrics unrelated to confirmed reserves, and even then, authenticity of reports for politically-loaded quota requirements is dubious at best, so true production numbers coming out of the PRC are difficult to come by.
The reason the PRC dominates the REO market is historical. After entering the REO market in the 1980s, China quickly climbed the ladder to become the world’s largest miner, producer and out-putter by the mid 1990s. It was able to accomplish this feat by selling at very low prices; because China’s overall economic development was so much lower at the time, they were happy to accept much lower revenues than other global suppliers and competitors. Over the course of the decade of China’s REO industry expansion, most of the rest of the world’s REO mining operations were forced to close because the price of REOs (due to China’s undercutting) was too low to keep the mines financially viable. The depressed price put many of China’s competitors out of business, so market dominance spread even further over
the ensuing two decades, allowing PRC producers to greatly expand their extraction and refining capacities and leaving us with the market segmentation that we currently have today.
There are countless “unverified” REO deposits buried elsewhere around the world that will become financially viable when the price inevitably rises, as it will when the market expansion reaches a pace Chinese producers can’t quite
keep up. The needs for revenue consistency and supply expansion will motivate suppliers to seek out new reserves, and the steadily increasing demands from mid-market producers and downstream consumers will force the price up. As these forces unfold, the composition of market control will shift, allowing new opportunities for capitalists and investors.
In the Trans-Pacific region Vietnam and Australia also hold enormous reserves of relatively untapped Rare Earths. Australia has only been mining REO since 2007, so the industry is still young, but expanding and becoming more profitable. One great example of smart regional expansion of REO production can be seen in the Australian company Lynas. Lynas operates one of the world’s most modern REO processing facilities in Malaysia, which refines REO ore sourced from Western Australia. Malaysia’s experience working with this advanced multinational corporation will help it to further develop its own REO industry assets to tap into domestic REO deposits, which are already starting to be confirmed. More reserves will likely be “discovered” as more funding goes looking for it.
REO assets in Vietnam are currently seriously underdeveloped. Vietnam may have more REO deposits domestically than any other nation except the PRC, but exploitation of the pay dirt has been painfully slow. Market forces (internationally) will continue to put capitalistic pressure on accelerating extraction efforts of REOs, ultimately establishing long-term, ongoing mining operations. It is only a matter of time; global transition to an eco-sustainable
economy will demand that those REO assets be extracted and implemented into green technologies. The greatly improving macroeconomic strength and political stability currently displayed by the Vietnamese government under
control of the Communist Party of Vietnam (VCP) are coalescing well within the nearby geopolitical environment, finding many areas of common ground with its largest neighbor and biggest trading partner, China, and making the prospects for the foundational development of a larger REO industry bright.
The bottom line: REO-based products will be even more valuable tomorrow. Old mines will have their financial viability renewed. New extraction operations will be explored and established. Locals will revolt, and environmental concerns will arise, along with plenty of corresponding litigation and press, but the necessity of REO extraction will often prevail.
The cost of not increasing the use of Rare Earths (which is to say, the cost of continuing to do things in the much-more-harmful, fossil fuel-centric way of the past) is far more devastating.
Because the costs and challenges to expanding the REO mining industry globally are very high, some key companies will find future success with REO recycling operations as well. It is challenging and dangerous, but discarded electronics can be extremely valuable if their expensive and rare constituent components, particularly magnets, can be pieced apart from their complex designs and reinserted into the manufacturing process. Increasing the “circularity” of the REO economy by increasing recycling and reuse efforts is more sustainable and offers numerous lucrative opportunities for capitalists, though more strides need to be made as no current company, in our view, possesses the required technology to recycle REO parts at the requisite skill and efficiency. The challenge will likely be surmounted by an advanced robotic system, possibly integrating a large tech company into the sector.
tkscm, limited 