Rare Earth Commodities – Demand Is Stepping Up

According to Statista the world will have 4.68 billion mobile phones by 2019. Two and a half billion of these at least will be smart phones. By 2016 there were already one million electric cars travelling the highways and byways of the world.In mid 2018 we passed the three million mark! We also know that once 'things' reach what is called their critical minimum mass they either take off like rockets or spectacularly fizzle out. In other words, it may take several decades for a new invention to attract the attention of the masses but when enough of those masses eventually decide they like something the length of time it takes for that something to increase 8 fold in numbers is significantly less than the time it took to reach the first milestone. Electricity is a typical example of this. It took over a quarter of a century to get just 10% of US households hooked up to the newly installed electrical grid way back when. However, within 33 years around 80% of US households had electricity.

Modern inventions tend to take off even faster once they reach their critical minimum mass. The refrigerator took just 2 decades to go from 10% of households to 80% of households. The mobile phone may have taken around 20 years to attract its first 10% ownership but once people decided it was a 'must have' accessory it took less than 2 decades for 80% of us to own one! And as we've cited above, we're on target to reach 5 billion of them within the next few years.

The horseless carriage is another example. Very few people wanted one when they first appeared back in 1885/86 but 125 years later (2010) there were at least 1.015 billion of them driving around! Statistics further indicate that by 2035 there will be at least 2 billion in operation. So whilst it took 125 years to reach the 1 billion mark it will only take 25 years for that number to double. And an increasingly significant number of those will be hybrid, electrical and / or self-driving vehicles.
On the surface of it, you might be tempted to think 'so what'. That's the way of the world these days! However, there are a number of implications behind our increasingly rapid adoption of advancing technologies.

Your Smartphone – A Veritable Treasure Trove

Most if not all the gadgets we use contain 'ingredients' that have to be dug out of the earth. Therefore escalating demand for these gadgets creates escalating demand for those ingredients. That's the first point. The second point is that the more technologically advanced the gadget is, the more likely it is that it requires ingredients that are not so commonly available. Your up to the minute whiz-bang smartphone for example is a miniature treasure trove when it comes to these types of 'ingredients'. For example, did you know that it contains at least 70 of the period table's 83 stable and non-radioactive elements? Or that around 40% of it is metals. Further, it has 16 of the 17 so-called Rare Earth Elements (REEs). Yes, your smartphone contains, amongst other things:

  • Neodymium, terbium and dysprosium – these make your phone vibrate so that you can turn off your ring tone, an essential function these days given our fondness for taking our phone literally everywhere with us including important business meetings, family meals, social functions etc. These are REEs.
  • Terbium and dysprosium – these are used to produce the colours in your touchscreen and are also REEs.
  • Yttrium, lanthanum and gadolinium – other REEs that are found in the colour display, the camera and the screen.
  • Praseodymium – used to harden glass and also in the magnets in earphones. Also an REE.
  • Copper (15g), gold (0.034g), and silver (0.34g)* – used in the wiring on the circuit board
  • Palladium (0.015g), platinum (<0.001)*, tungsten and zinc – components of the phone's circuitry
  • Aluminium (25g)* and magnesium – used in alloys to make the durable, lightweight casings in some phones. Also used for the battery housing. Aluminium oxide, along with silicon dioxide, is used to make the glass screens, which are coated in indium tin oxide to allow the screen to be touched without being damaged.
  • Lithium, cobalt and carbon graphite – these are found in the rechargeable batteries
  • Nickel – used in the batteries, capacitors and electrical connections
  • Cadmium – used in the battery
  • Lead – used in the solder joints that keep the phone together
  • Crude oil – the primary raw material used to produce the plastic that is a major component in all mobile phones.

Are We Mining The Wrong Things!


What is also astonishing, and definitely worth consideration, is that you could 'mine' more gold from a tonne of smartphones than from a tonne of ore*. Three hundred times more in fact. It's the same for silver. A tonne of smartphones has 6.5 times more silver than the equivalent amount of ore! Or to put it another way – a million of these phones would produce ~16 tonnes of copper, 34 kilos of gold, 15 kilos of palladium and 350 kilos of silver*. There is also a not so insignificant quantity of platinum. At the time of writing, here are a few calculations:

  • ​Copper is sitting at $6.67 US a kilo (16 tonnes = $106,720) whilst scrap copper is around $6 US per kilo ($96,000 US)
  • Gold is worth $38,203 US a kilo so 34 kilos is $1,298,902 US.
  • Palladium is $30,237.78 US a kilo ($453,567 US)
  • Silver - $495.44 US a kilo = $173,404 US

All up, one million smartphones could be recycled to produce $2,032,593 US in those 4 metals alone! Then there are all the ordinary mobile phones (well over 4 billion of them) that also contain varying amounts of these metals. There are currently more than 2 billion smartphone users in the world and at least the same number of ordinary mobile phones. Those figures are mind boggling enough in terms of the sheer quantity of precious and REE minerals in them. But even more mind-boggling is the fact that most of us will go through several (and counting) of these phones in our mobile phone using lifetime. Some people upgrade every 12 months or so. That amounts to millions of phones, millions of dollars and tonnes of precious and REE minerals being consigned to the waste heap (or junk drawer) every year. Only 10% are currently recycled.


Other Escalating Rare Earth Uses

Rare earth elements are also used in a range of other applications including lasers, x-ray machines, computer memory sticks/modules, camera lenses, batteries, super conductors, lighting products, wind turbines, solar panels, aerospace, specialised glass and cleaning products. More specifically, they're found in batteries, magnets, microphones, cancer treating equipment, nuclear handling facilities and equipment, electric car motors, as bio-fuel catalysts and many more. The battery of a hybrid electric car for example has around 9 kilos of rare earth elements in that alone**! There's a list of rare earths and their applications here.

So what does this mean for the mining and recycling of these commodities?

Currently one country (unhealthily in more ways than one) dominates world production and supply of rare earths. That country however has been in the news a lot recently over environmental and health concerns arising from unsafe, environmentally unsustainable rare earth mining practices. They've been forced to close a number of illicit and non-compliant mining operations whilst also taking steps to address the glaring holes in their safety and environmental legislation. This has caused a drop in supply of the affected commodities and a realisation that just maybe it's time for other countries with sizeable reserves to look at stepping up to the plate.

It also means the world collectively needs to come up with a way of recycling the billions of waste products we manufacture and discard that contain rare earth minerals. Recycling the metal and mineral components in those products alone will make a sizeable dent in the requirement to mine more of the raw stuff! However, as with mining, we need to develop environmentally sustainable and safe ways to do that too. Some of the current methods are dangerous, toxic and exploitative in terms of labour.

References:

*http://www.bbc.com/future/story/20161017-your-old-phone-is-full-of-precious-metals

**http://www.pbs.org/wgbh/nova/next/physics/rare-earth-elements-in-cell-phones/

***https://investingnews.com/daily/resource-investing/critical-metals-investing/rare-earth-investing/rare-earth-reserves-country/.

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Tuesday, 20 April 2021
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