Race to boost future supplies for rare earth elements
Global warming necessitates urgent move to electric vehicles requiring lithium
RARE earth elements (REEs) are the key to the industries of the future. Without them countries will lose their competitive industrial advantage, which is why the price of REEs have been rocketing and will continue to do so in the years ahead.
It used to be that the great powers set their sights on oil as a strategic resource, which drove their foreign policy priorities, but oil is fast being eclipsed by the list of 17 critical elements in the periodic table, which are essential to a nation’s economy and national security.
Rare earth elements are not actually rare and can be found around the world, but they are limited in volume, which makes a secure supply into the future vital. They are key to high tech products like smartphones and monitors, to energy conversion systems like wind turbines and electrical machinery, and military equipment like lasers and radar.
An example is America’s F-35 fighter jet, which needs 417kg of rare earth elements to operate. Demand for the REE nickel is expected to rise from 100 000 tons last year, to 2.6 million tons in 2040. The demand for cobalt is expected to expand by 6.8% a year through 2030.
As the world is coming to terms
with the overwhelming damage being caused by global warming, the necessity to move away from oil and gas, and implement the Green Deal, is becoming urgent.
To drastically reduce greenhouse gas emissions, countries are pushing the necessity of electric vehicles, which require the rare earth element lithium for the manufacture of batteries for electric cars. Six years ago the cost of lithium was $6 500 a ton, whereas the price is now $16 500 (R247 128), and is set to exceed $20 000 in a few years.
The approximate amount of lithium on Earth is 80 million tons, and some experts estimate it could run out as soon as 2040 given the future demand for electric cars, which are expected to double by 2024.
According to the US Geological Survey, Bolivia has the largest lithium reserves in the world – one quarter of the entire global resource, and with Argentina and Chile makes up what has been dubbed the lithium triangle.
The US, Australia, and China also have significant deposits. China is the largest consumer of lithium, and controls
80% of its production and 90% of its refining.
The Pentagon has referred to Afghanistan as the “Saudi Arabia of lithium,” and has projected that the country’s deposits could equal Bolivia’s. Given this strategic resource, it explains why countries are rushing to engage with the Taliban in the wake of the US exit from Afghanistan. Afghanistan’s lithium deposits are virtually untouched due to the decades of instability in the country.
Foreign powers have also had a hand in manipulating the electoral outcomes in Bolivia, ensuring that the country’s first indigenous president – Evo Morales – who had a strong social agenda, was pushed aside in what was considered a “coup d’état.”
Morales was a keen proponent of resource nationalism, and had tried to kick-start a local lithium industry with a state-owned company YLB, and joint partnerships with foreign firms. YLB had signed an agreement with a Chinese consortium, given China’s huge demand, but this would not have sat well with the Americans or Europeans
who were interested in exploiting Bolivia’s lithium. Morales was forced out soon afterwards.
This is reminiscent of the Democratic Republic of Congo, when the first independent leader Patrice Lumumba looked eastward in terms of exploiting the country’s rich mineral wealth, and by 1961 he had been assassinated, allegedly by the CIA.
Most of the uranium used in World War II, including all the uranium used in the atomic bomb Manhattan Project, came from the Congo, and western countries were not prepared to hand Congo’s long list of mineral resources over to other powers.
In terms of rare earth elements, Africa has an opportunity to emerge as a production region especially in the east and south. Extraction is under way in Burundi, and the Steenkampskraal deposits in South Africa could come online shortly. Rare earth projects have also begun in Namibia, Malawi, Angola, Tanzania, Uganda, Madagascar, and Mozambique.
The US and the EU are pushing to establish strategic partnerships with African countries in order to boost their supplies of REEs in the future.
But these moves will form part of what is the new scramble by big powers for these precious resources in a world that is shifting away from old energy sources to renewable and green energy.
On February 24 this year, US President Joe Biden issued an executive order on vital supply chains, which proposed the commissioning of reports on rare earth elements and critical minerals.
The race is on.