Rare Earths: Maturing Markets Will Help Supply Chain Transparency

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Source: Adobe Stock/jarous

David S. Abraham runs the Technology, Rare and Electronics Materials Center and is author of “The Elements of Power: Gadgets, Guns And the Struggle for a Sustainable Future in the Rare Metal Age.” His career spans from commodities trading and Wall Street to the White House where he oversaw international and natural resource programs. He is a frequent speaker on rare metals and technology demands. This is part two of a discussion about rare metals, particularly rare earth element production and other issues surrounding the metals that fuel the gadgets and technology we love, with MetalMiner Editor Jeff Yoders. Here is part one if you missed it.

This part of our discussion focuses on rare earths, environmental product declarations, conflict-free minerals certifications and the challenges for buyers, miners and refiners in very loosely defined markets. 

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Jeff Yoders: Looking at solar panels, cell phones, wind turbines and other end-use products that use rare earth elements, do you feel that, in the near future, their production will require more readily available data about available supply, production and existing stockpiles of these elements or more transparent commodity markets? As we’ve seen in other maturing manufacturing industries?

David Abraham: With the increasing specialization of the materials we need — higher-grade, different specs — it’s going to be increasingly challenging to commoditize them. There is not a lot of interest among the producer companies to open the books and allow people to know what materials are being produced at what grade and so forth. Although it would be much more beneficial to have an open accounting, it’s a real challenge to do so. The London Metal Exchange is trying to commoditize certain minor metals but the challenge there is at what stage? What becomes the base commodity? What grade of neodymium? What grade of dysprosium? Because they are traded so lightly, the challenge is are vast. I would love to see it done, but I just don’t see it being done very well anytime soon.

Circuit boards depend on minor metals such as tantalum. Source: Adobe Stock/Lionelpc

Circuit boards depend on minor metals such as tantalum. Source: Adobe Stock/Lionelpc.

JY: Too many hurdles to cross?

DA: The interests are there further downstream especially as companies need to report on conflict minerals. As I elude to in the book, the people who are buying and selling the metalsdon’t see much benefit without that pressure from further downstream.

JY: What about the trend toward environmental product declarations and conflict-free metal designations. Do they hold any hope for opening up the rare metal supply chain to transparency?

DA: We really want to make sure the products that we use aren’t causing unintended harm. That’s a wonderful thing in and of itself and it gets people thinking, ‘where did these materials come from?’ The challenge, though, for a company to know exactly where all its materials come from, it’s a huge hurdle. Right now, they have to know where the material doesn’t come from, which is a little easier.

To know where EVERY spec comes from is a lot harder, and unrealistic currently. Many parts of the world simply don’t document, and don’t really have a reason, honestly, to document. As you know, going seven or 10 layers deep in a supply chain is difficult and they are going to places that don’t understand conflict minerals or even what’s to understand about them. I appreciate the direction it’s going.

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JY: When Dodd-Frank conflict mineral certifications were due earlier this year we reported on the results and one of the companies that submitted a 1502 form SD was Party City. They wanted to disclose the supply chain for their mylar balloons. The company’s submission said “It is possible that certain of the company’s metallic balloon and novelty products may contain Conflict Minerals” while explaining the many layers of suppliers and sub-suppliers in their chain.

DA: Its a relatively easy thing to know where balloon material is coming from. Compared to, say, airplanes with really complex alloys with say, a sprinkling of titanium or rhenium in various components.  It’s a challenge and hopefully we are pushing people in the right direction to ask the right questions, even though they’re not always going to be able to come up with the complete answer. The US Congress is saying to the Department of Defense ‘know where everything comes from.’ But supply chains are moving things and go through time. They’re not only seven to 10 layers deep, they’re years deep, in some cases. To know where everything comes from all of the time is more of an ideal than an end statement.

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