Why rare earth element production is always out of whack
Rare earth element miners must always be solving a balance problem, that is matching economic demand and mineral production, say researchers in the Journal of The Minerals, Metals & Materials Society.
Lead author K. Binnemans writes that market balance is a moving target due to technological evolution and the unique nature of mining rare earth elements.
The rare earths or rare-earth elements (REEs) are found in nature as mixtures of the different elements in certain ratios, which can show variations depending on the type of ore or the geographical location of the deposit.
The result is a sometimes very high demand of an REE that is a minor constituent in the ore (such as dysprosium), while the demand of the major constituent (such as yttrium) is relatively much lower. Increasing the overall REE production to meet the highest demand of any REE and to stockpile the other REEs with lower demand seems to be an obvious solution. This will increase the overall price of the REEs due to the extra costs for separating the REE mixtures and stockpiling. Adjusting the overall REE production to optimize the REE producer’s operational margins will create surpluses of some REEs and shortages of other REEs. Shortages of a minor constituent lead to dramatic price increases of this REE due to its (very) high price inelasticity. Preferentially, the REE market is driven by the demand for elements that are very abundant (cerium and lanthanum) since this will create fewer problems with stockpiling of the elements that are available in excess.
The authors note that the miners like Molycorp are turning to REE recycling to smooth the bumps. Not only does it mitigate the reliance on Chinese market dominance but it also helps bring markets back to some balance.
Recycling of NdFeB magnets to recover neodymium and dysprosium implies that less primary REE ores have to be mined to ensure the global supply of neodymium and dysprosium. Less mining of REE ores means less overproduction of cerium and samarium.
Creative Commons image by Frank Kovalchek