Published: June 2011

Rare Earth Elements


The Secret Ingredients of Everything

From smart phones to hybrid vehicles to cordless power drills, devices we all desire are made with a pinch of rare earths—exotic elements that right now come mostly from China.

By Tim Folger
Photograph by Nick Mann

Most of us would be hard-pressed to locate Inner Mongolia, Jiangxi, or Guangdong on a map. Yet many of the high-tech devices we depend on—cell phones, laptops, and hundreds of others—would not exist without an obscure group of elements mined, sometimes illegally, in those three and other regions of China.


The list of things that contain rare earths is almost endless. Magnets made with them are much more powerful than conventional magnets and weigh less; that's one reason so many electronic devices have gotten so small. Rare earths are also essential to a host of green machines, including hybrid cars and wind turbines. The battery in a single Toyota Prius contains more than 20 pounds of the rare earth element lanthanum; the magnet in a large wind turbine may contain 500 pounds or more of neodymium. The U.S. military needs rare earths for night-vision goggles, cruise missiles, and other weapons.

"They're all around you," says Karl Gschneidner, a senior metallurgist with the Department of Energy's Ames Laboratory in Ames, Iowa, who has studied rare earth elements for more than 50 years. "The phosphors in your TV—the red color comes from an element called europium. The catalytic converter on your exhaust system contains cerium and lanthanum. They're hidden unless you know about them, so most people never worried about them as long as they could keep buying them."

Now a lot of people are worried.

China, which supplies 97 percent of the world's rare earth needs, rattled global markets in the fall of 2010 when it cut off shipments to Japan for a month during a diplomatic dispute. Over the next decade China is expected to steadily reduce rare earth exports in order to protect the supplies of its own rapidly growing industries, which already consume about 60 percent of the rare earths produced in the country. Fears of future shortages have sent prices soaring. Dysprosium, used in computer hard drives, now sells for $212 a pound, up from $6.77 eight years ago. Over just two months last summer, prices on cerium jumped more than 450 percent. World demand will probably exceed supply before the end of 2011, says Mark A. Smith, president and CEO of Molycorp, an American company that reopened a rare earth mine at Mountain Pass, California, last year.

"We're in a supply crunch right now, and it's a pretty severe one," says Smith. "This year the demand will be 55,000 to 60,000 tons outside of China, and everyone's best guess right now is that China will be exporting about 24,000 tons of material. We'll survive because of industry inventories and government stockpiles, but I think 2011 will be a very, very critical year in terms of supply and demand."

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