(MENAFN- Asia Times) As political and military tensions grow between the US and China, prices for precious rare-earth elements (REEs) are now soaring, along with demand for skilled mining workers, Nikkei Asia reported.
China, which dominates the global rare-earth industry, is the only country that has a complete supply chain for rare earths from mining, to refining, to processing.
According to commodity research specialist Roskill, as of last year, it controlled 55% of global production capacity and 85% of refining output for REEs.
That dominance could actually grow, as Beijing has announced it would be open to“friendly cooperation” with Afghanistan's new Taliban regime which — according to rare earth experts — is sitting on one trillion dollars' worth of unmined minerals.
And each time China threatens to withhold or cut back on exports, worldwide panics cause the prices of rare earth metals to skyrocket.
REEs are crucial in cutting-edge technologies — everything from missiles, jet fighters like the F-35, to wind turbines, medical devices, power tools, cellphones and motors for hybrid and electric vehicles.
For Max Hsiao, senior manager of an audio component maker based in Dongguan, China, the squeeze is coming from a magnetic alloy known as praseodymium neodymium, Nikkei Asia reported.
The price of the metal, which Hsiao's company uses to assemble speakers for Amazon and laptop maker Lenovo, has doubled since June last year to around 760,000 yuan (US$117,300) a ton this August.
“The rising cost of this key magnetic material has been overwhelming, and that knocked at least 20 percentage points off our gross margin … That's really a huge impact,” Hsiao told Nikkei Asia.
“We don't see this trend reversing anytime soon.”
Praseodymium and neodymium are used to make neodymium-iron-boron (NdFeB) magnets.
These permanent magnets, as they are known, are essential to a swath of tech gear — everything from speakers and electric vehicle motors to medical devices and precision munitions.
Hsiao's headaches are typical of many hardware makers, Nikkei Asia reported.
Rare earths such as neodymium oxide — a key input for motors and wind turbines — have jumped 21.1% since the beginning of the year, while holmium, which is also used in magnets and magnetostrictive alloys for sensors and actuators, have surged nearly 50% so far this year, according to Shanghai Metals Markets.
China is the world's biggest supplier of rare-earth elements, the crucial component in an array of high tech and military applications. Credit: VCG.
Meanwhile, the soaring demand for REEs is beginning to be felt on the other side of the world, in Nevada's high desert.
In Nevada, about 15,000 people are employed by the state's mining sector. Nevada Mining Association (NVMA) President Tyre Gray said that puts the industry“about 500 jobs under where it should be” — and that's been the case for years.
According to a report in Northern Nevada Business Weekly , the need for more miners is only growing as the US looks to secure the domestic supply chain for REEs and other important minerals such as lithium.
First proposed in the 1970s and produced commercially by Sony in 1991, lithium batteries are now used in mobile phones, airplanes and cars.
Lithium batteries have a much higher energy density than other batteries.
They also have a lower discharge rate than others, losing around 5% of their charge in a month compared to a nickel-cadmium batteries which lose 20% in a month.
“There's a need to fill the jobs that we currently have open, and there's going to be a need to fill jobs that are going to be created due to increased demands in the mining sector,” Gray said.
To that end, Gray pointed to the proposed lithium mine project at Thacker Pass in Humboldt County near Orovada, roughly 50 miles north-northwest of Winnemucca.
“They're going to need construction workers in order to develop their mine, but then they're going to need about 400 full-time employees to run the mine,” Gray told NNBW.
“Where are they going to get those 400 from when we already have a shortage of 500 people?”
Pausing, he succinctly added:“We need workers.”
The workforce woes aren't unique to Nevada. Mining and geological engineering employment is estimated to grow only 4% from 2019-2029, according to the Bureau of Labor Statistics (BLS).
Nevada Mining Association (NVMA) President Tyre Gray. The Silver State accounts for about 77% of the gold and 28% of the silver mined in the U.S., according to the Nevada Mining Association. Credit: Handout.
As demand keeps rising for critical minerals, there are fewer skilled employees to fill job openings.
According to a representative for Nevada Gold Mines,“We are lucky to be experiencing unprecedented growth in our business. However, this also adds the challenge from a workforce perspective.
“We believe the immediate reason behind this has been the pandemic and the resulting cultural change happening in the US.
“After the disruption caused by the pandemic to all aspects of people's lives, like all other companies in the US, we are seeing some of our workforce relooking at their life choices and choosing to make a change.”
This is despite jobs in the industry paying well. In Nevada, the median annual salary of an underground mining machine operator and extraction worker is US$52,400.
It nearly doubles for mining and geological engineers (US$93,800), a workforce segment that makes upwards of US$156,000 a year, according to May 2020 figures from BLS.
Adding to the challenge of luring new talent into the sector, Nevada's mines are carved out in remote areas of the state.
“Attracting individuals to live and work in the rural communities … is a challenge,” according to Nevada Gold Mines.
Many of the mining industry's challenges — workforce or otherwise — stem from a perception issue, Gray said.
Some people simply think of dirt and soot-covered miners working in dangerous conditions, using outdated machinery puffing black clouds of smoke.
“Unfortunately, a lot of the time, people still view the industry as the 1860s industry or even the 1960s industry,” Gray told NNBW.
“When, truly, we are really at the cutting-edge of technological advancements. We're using the most advanced, the most available technologies in order to excavate material in the safest way.”
Still, it remains to be seen if the US can restore its domestic supply of REEs and lessen its dependence on China.
The only thing that is certain is that the country no longer wants to rely on its historic trading partners.
Said American linguist and historian, Noam Chomsky:“If China gains a near-monopoly over rare earths, they will be in a powerful position to influence choices and policies of other states. From China's point of view, it certainly makes sense to gain as much control as they can.”
Sources: Nikkei Asia, CNBC, Northern Nevada Business Weekly, Power Technology, BigThink.com, Wikipedia, Nevada Mining Association
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