Critical Rare Earths, National Security, and U.S.-China Interactions

Rare earth metals and salts. The left-most metal disc is cast dysprosium metal,
resting on a sheet of sublimated dysprosium. The other metal disc is scandium
and the metal cylinder is gadolinium.

China angers the world as battle for rare earth metals escalates - Telegraph

Last week, the EU, US and Japan formally asked the World Trade Organisation (WTO) to look at China’s export restriction on rare earth metals. Lawyers believe the case will run and run.

RAND Analyst David L. An has an approach

Critical Rare Earths, National Security, and U.S.-China Interactions: A Portfolio Approach to Dysprosium Policy Design | RAND

In recent decades, China has become the world's principal source of rare earths extraction, processing, and manufacturing of its derivative goods. China's monopoly is partly a result of its rich geological endowment, particularly of the "heavy" rare earths that are increasingly valuable in green energy and military technology applications. The country's rapid industry consolidation, however, has been abetted by unfair policies such as export restrictions that subsidized domestic producers. Furthermore, Beijing has indicated a tight-fisted disposition, intent on reserving its rare earths for domestic consumers and preferring that trade partners "find their own sources."

This dissertation examines how the U.S. can pursue a portfolio of policies to reduce American vulnerability to the supply disruption of one critical heavy rare earth, dysprosium. [from the Greek ‘dysprositos’ meaning ‘hard to obtain.’] Intended primary for U.S. policy makers, the study first provides a consolidated narrative of the interplay of politics, economics, and geology of rare earths in general and dysprosium in particular. It then systematically evaluates the effectiveness and costs of a roster of new and incumbent policies.

A new strategic planning framework leverages mixed-integer linear programming to concoct policy portfolios that maximize U.S. resiliency to dysprosium supply disruptions at given budget levels. This enables a trade-off analysis comparing the portfolios' vulnerability reduction effectiveness against their costs. This analysis culminates with a recommendation of the portfolio that balances fiscal feasibility with acceptable vulnerability reduction. The hope is that the method and research findings will also serve as a generalizable template for mitigating the criticality of other vulnerable rare earths and materials.

Dysprosium, the Most Critical Rare Earth

This study heavily relies on the critical materials framework established by NRC (2008) and Bauer et al. (2011) which introduced the criticality matrix. According to this matrix, the more important a material is to society and the more risk there is of a supply disruption for that material, the more critical or vulnerable the material. Dysprosium ranks high in both dimensions (Bauer et al. 2011). Criticality is manifested in part by shortfalls, the difference between available supply and demand. A range of potential shortfalls is possible in the decades ahead. In the best case, the shortfalls will be limited if demand requirements are stable and supply capacities grow steadily outside of China. In the hypotheticalworst case, however, the shortfall can be very acute.

Uses - Magnets, Lamps, Reactor Rods

Dysprosium’s main use is in alloys for neodymium-based magnets. This is because it is resistant to demagnetisation at high temperatures. This property is important for magnets used in motors or generators. These magnets are used in wind turbines and electrical vehicles, so demand for dysprosium is growing rapidly.

Dysprosium iodide is used in halide discharge lamps. The salt enables the lamps to give out a very intense white light.

A dysprosium oxide-nickel cermet (a composite material of ceramic and metal) is used in nuclear reactor control rods. It readily absorbs neutrons, and does not swell or contract when bombarded with neutrons for long periods. 

Rare Earth Elements: The Global Supply Chain - R41347.pdf

China Dysprosium, China Dysprosium Manufacturers and Suppliers on Alibaba.com

China has paid the price for rare earth dominance

China Tries to Clean Up Toxic Legacy of Its Rare Earth Riches - NYTimes.com
TIANJIN, China — In northern China, near the Mongolian border, radioactively contaminated leaks from two decades of rare earth refining have been slowly trickling underground toward the Yellow River, a crucial water source for 150 million people.

Alternative Suppliers May Arise

Northern Minerals on path to becoming a leading dysprosium producer by 2016 | InvestorIntel
The PFS confirms that, says Northern, Browns Range could be “the first significant world producer of high value dysprosium outside of China.” Northern says production could begin as early as the latter half of 2016. This means that the Browns Range project offers excellent economics because, apart from the presence of dysprosium (which commands premium prices), the PFS was based on “a conventional mining operation involving both open cut and underground operations, and a relatively simple processing flow-sheet with all infrastructure located on site”. The PFS also identified a base production of 279 MT of dysprosium per year and a total of 3,200 MT of mixed rare earth oxides. Such is the concentration of ‘heavies’ in the mix that Northern could survive on the production of dysprosium alone. Northern also noted that it has faced little difficulty in extracting the xenotime (the mineral containing the rare earths) from the host rock. Having completed the feasibility study, therefore, Northern has also maintained a degree of financial ‘independence’, managing to keep control of funding mechanisms as it moves to secure the capital to bring the project to production stage. The current resource estimate for the Browns Range project now stands at 4.13-million tons of at 0.68% (or 28,084 tons TREO).

Due to the global economic downturn, the rare earths market was marked by lower demand in the past two years, resulting in a price consolidation and a determined effort by the Chinese government to cut down on price distorting mechanisms as ‘black market’ rare earths trading. China’s rare earth policy has also established the increasing buildup of strategic reserves by the Chinese government including terbium oxide, neodymium, gadolinium, dysprosium and praseodymium. 

The PFS confirms that, says Northern, Browns Range could be “the first significant world producer of high value dysprosium outside of China.” Northern says production could begin as early as the latter half of 2016. This means that the Browns Range project offers excellent economics because, apart from the presence of dysprosium (which commands premium prices), the PFS was based on “a conventional mining operation involving both open cut and underground operations, and a relatively simple processing flow-sheet with all infrastructure located on site”. The PFS also identified a base production of 279 MT of dysprosium per year and a total of 3,200 MT of mixed rare earth oxides. Such is the concentration of ‘heavies’ in the mix that Northern could survive on the production of dysprosium alone. Northern also noted that it has faced little difficulty in extracting the xenotime (the mineral containing the rare earths) from the host rock. Having completed the feasibility study, therefore, Northern has also maintained a degree of financial ‘independence’, managing to keep control of funding mechanisms as it moves to secure the capital to bring the project to production stage. The current resource estimate for the Browns Range project now stands at 4.13-million tons of at 0.68% (or 28,084 tons TREO).
Due to the global economic downturn, the rare earths market was marked by lower demand in the past two years, resulting in a price consolidation and a determined effort by the Chinese government to cut down on price distorting mechanisms as ‘black market’ rare earths trading. China’s rare earth policy has also established the increasing buildup of strategic reserves by the Chinese government including terbium oxide, neodymium, gadolinium, dysprosium and praseodymium.
- See more at: http://investorintel.com/rare-earth-intel/northern-minerals-path-becoming-leading-dysprosium-producer-2016/#sthash.X8QKX4UM.dpuf