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Politics could upend global trade in rare earth elements

The date of: 2019-04-12
viewed: 10

Source:Science Daily

Companies and governments worldwide are anxiously watching the fate of a sprawling industrial facility 30 kilometers north of this city on the east coast of peninsular Malaysia.

The 100-hectare Lynas Advanced Materials Plant (LAMP) produces 10% of the world's output of rare earth oxides (REOs), minerals needed in technologies including mobile phones, hard drives, surgical lasers, and cruise missiles. Lynas, an Australian company, imports concentrated ores from mines in Australia and refines them in Malaysia, where costs are lower; it sells REOs—which include cerium compounds, used in catalytic converters, and neodymium, critical to permanent magnets—to Japan, the United States, and other countries. The plant produced almost 18,000 tons of REOs in 2018.

Now, LAMP faces closure, barely 7 years after it opened. Environmental groups have long opposed the on-site storage of slightly radioactive waste from the extraction process, and they found a sympathetic ear in a new government elected in May 2018. In December 2018, the government demanded that LAMP ship its radioactive waste back to Australia if it wants to renew its operating license, which expires on 2 September. The company says exporting the residue by the deadline is “unachievable.”

The standoff has caused Lynas's stock to lose almost half its value and has worried many countries hungry for REOs. A shutdown would be “a significant event with a ripple effect,” says Ryan Castilloux, a metals and minerals analyst at Adamas Intelligence in Amsterdam. For one thing, it would strengthen China's position as the dominant supplier of REOs, which many countries deem a strategic risk. Japan's electric vehicle industry, for instance, would lose its main supplier of REOs for permanent magnets.

Rare earth elements include those with atomic numbers 57 to 71, the “lanthanide series” of the periodic table, as well as scandium and yttrium. Their exceptional magnetic and conductive traits make them critical to clean energy technology, such as hybrid fuel cells, solar panels, and wind turbine magnets. Industries worth trillions of dollars depend on REOs worth only billions, Castilloux says.

Rare earth deposits are found in more than 800 locations worldwide. Refining them takes lots of corrosive chemicals and generates huge amounts of residue. China was long the sole supplier; when it reduced exports in 2010, citing environmental concerns, prices jumped as much as 26-fold and major consumers scrambled for alternate sources. The United States and Myanmar mine REOs as well, but these are also processed in China, which now produces about 89% of the global REO output (see graphic, below). Lynas has become a “flagship” of REO production outside China, Castilloux says.

But the company is running aground in Malaysia. At LAMP, ores are roasted with acids to dissolve the REOs and then diluted with water. This creates a solution of concentrated REOs and a pastelike residue—more than 1.5 million tons so far, of which 30% is slightly radioactive because it retains thorium and uranium from the ores. Some REO facilities elsewhere have built permanent, secure facilities to store such waste, says Julie Klinger, a geographer and expert in REO mining at Boston University; others are secretive about what they do with it. “Residues are definitely the main issue,” says Tracy Moore, CEO of Canada Rare Earth Corporation in Vancouver.

In a plan approved by the previous government, Lynas aimed to recycle its residues; the company has sponsored Malaysian researchers to turn them into soil enhancers. These efforts have not yielded commercial products, however. And in December 2018, a new executive committee, appointed by the government to evaluate LAMP, cautioned against using the radioactive waste in agriculture as it might accumulate in the environment. Retired radiochemist Amran Majid of the National University of Malaysia in Bangi and others have suggested a different strategy—extract the thorium, which accounts for almost all of the radioactivity, for use as fuel for nuclear reactors.

So far, LAMP has been storing residues on-site instead, in rapidly growing hills. The specter of piled up radioactive waste has sparked public fears, which experts say are exaggerated. Workers at the site are exposed to about 1.03 millisieverts (mSv) per year, Lynas reports, far below the 20-mSv threshold advised by the International Atomic Energy Agency (IAEA) for workers exposed to radiation. The health effects of such low doses are “negligible,” says Kwan Hoong Ng, a medical physicist at the University of Malaya in Kuala Lumpur. People outside the facility are at an even lower risk, Amran adds.

Still, in 2011 and 2014 IAEA found that Lynas lacked adequate plans for a permanent facility if recycling fails. The executive committee has suggested Lynas build one immediately, citing the potential for natural disasters to disperse the residues. (Monsoon storms and floods are common in the area.) Radioactivity isn't the only risk, says Bun Teet Tan, chair of Save Malaysia Stop Lynas, a nongovernmental organization here. A 2013 review by the ?ko-Institute in Darmstadt, Germany, commissioned by Tan's group, found that heavy metals such as nickel, chromium, lead, and mercury could contaminate groundwater.

Neither the ministry in charge nor Lynas responded to interview requests from Science. In a financial report issued in late February, Lynas directors said the company has lived up to the terms of its operating license and will build permanent storage if necessary; exporting the residue should be a last resort, they said.

Saleem Ali, an expert in energy and the environment at University of Delaware in Newark, says the anti-Lynas fervor in Malaysia is “a classic case of the not-in-my-backyard syndrome.” He says recycling is a commendable option but worries activists are now “stigmatizing the waste.” Because REOs are crucial for green technology, “The industry needs to make the case more effectively that [it] benefits not just the local, but also the global community,” Saleem says. Klinger says the conflict offers an “exciting opportunity” to develop new solutions for clean REO production that could serve as a model for others.

How the impasse will end is unclear. On 5 April, Prime Minister Mahathir Muhamad announced that Lynas can continue to operate if it imports only nonradioactive materials. In a statement, Lynas said it “sees value” in that idea. But shifting the processes that produce radioactive waste to Australia would be expensive, Castilloux says. “A slowdown in production or outright shutdown is certain.” And Mahathir didn't say whether waste already stored at LAMP can stay.

Meanwhile, REO producers from developed countries are establishing new footholds worldwide. A Lynas shutdown would offer “greater market opportunities” for other players, but could also “discourage financing” as investors might fear similar problems, Moore says.

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