Rare-Earth Resources Increase Chinese Clout

Stephen Lacey, Editor
August 19, 2010 | 6 Comments

Over the past 5 years, China has emerged as a world-leading producer of solar and wind technologies. Due to its insatiable appetite for energy, the country is quickly becoming a top installer of renewables as well.

China is still consuming coal and oil at astonishing rates, however. On average, the country installs a new coal-fired facility every two weeks. Some experts believe that this will set China back and negate the progress it has made in the development of renewables.

Even so, China will continue to be a leader in the export of wind and solar technologies.

There's another factor that could increase China's role as a central figure in the renewables space: Its control of 95% of the rare earth resources like Indium, Gallium and Lithium. These are central to the functionality of solar cells (CIGS and CdTe) and battery technologies for automotive and power storage applications.

This is not a surprise. But the announcement from Chinese officials last month that it would decrease shipment of these resources by 72% certainly was. The goal is for China to lure technology companies over to the country by giving them access to restricted resources. If it works, we may see a lot more clean energy firms moving over to China.

It has given such signals in the past. China actually made a similar announcement in 2009, raising the ire of the international community.

Already, companies are setting up shop en masse in China due to lower labor costs and the need to be closer to the burgeoning renewables market around Asia. This decision to restrict exports of rare resources will likely accelerate the trend.

The Wall Street Journal had a great piece on the subject and the Energy Collective had a piece of commentary on the implications of the export restrictions on the renewable energy industry.

Also, below is a report from CNN on China's important role in the rare elements market:

6 Comments

zhaoqiang zhang
August 27, 2010

It is the responsibity of the medium to supply trustable information without distortion.

Let's take the two figures.

'control of 95% of the rare earth resources'

Your magazine in Volume 13 Issue 2 (http://www.renewableenergyworld.com/rea/news/article/2010/04/permanent-solution) said China owns 53% of world deposit and accounts 95% of the world production. Investigation from Chinese medium claims China owns 70%,36%,31% of the world deposit in 1970, 2000 and 2010 respectively(http://www.yicai.com/news/2010/08/385216.html, in chinese,but Google translation can help you), and in 2009, China production accounted 95%. So simply saying 'control of 95% of the rare earth resources' will mislead your readers to believe the monopoly position of China in rare earth industry.

'it would decrease shipment of these resources by 72% certainly was'

An investigation from Chinese medium (http://business.sohu.com/20100824/n274429588.shtml) shows China Official will decrease its export by 40% on the basis 0f 2009. Where does 72% come from?

The limitation of export quota by China official is an complicated issue, considering of environmental problems due to over-exploration, waste of less valuable rare earth materials due to selective exploration, and also the problems concerning fair pricing system. It is only fair to report both sides if you want to comment one things.

BTW, most of my friends in China do not like CNN (China Negative News) due to its medium distortion.

Ann Malone
August 24, 2010

Old-fashioned crystalline silicon PV's green reputation was deserved-- primary resource, sand. Sand is neither rare nor toxic.

The new thin-film PV is not green. Heavy metals imbeded in petroleum may be cheaper to make, but dealing with both initial resource extraction and an endgame involving heavy metals is costly. Who bears the cost of clean water? Not the manufacturer, but rather government. Guess China's still communist enough to accept a huge socialized cost.

Let's just watch China go that route, if it wants to risk its water supply. And let manufacturers change their citizenship if they want nothing but to chase money.

Steve Fortuna
August 24, 2010

DoggyDog is right: rare earth elements are designated as the numbers from 57 to 71 on the periodic table. However, the US has few minable sources of Lithium, Indium and Gallium and the Chinese are rapidly cornering the market and is not above using economic blackmail to force companies to manufacture there rather than export. Some Gallium and Lithium deposits have been found in S. America but China has the lion's share. Maybe we should start research on manufacturing these elements from zinc to avoid another OPEC like monopoly.

chris eddy
August 20, 2010

Indium, Gallium and Lithium are not a rare earths, nor does China control 95% of them. The China/rare earth problem is real, but let's try to keep our facts straight.

Kevin Clements
August 20, 2010

BTW- kudos to you Mr. Stephen Lacey for covering this and for the fantastic job you've done with Renewableenergyworld.com in genera.

Kevin Clements
August 20, 2010

Rare earths are THE critical commodity of the renewable energy age. EV batteries, wind turbines, thin film PV and plenty of power electronics to boot. This topic will only increase in significance as clean tech is deployed globally. China flooded the market in the 80's with the giant inner Mongolia mining bonanza. All I can say is Mountain Pass, California baby! The Sunshine state is going to have to balance the interests of Goldman, the hippies and the entrepreneurial cowboys to offset this dramatic move by China.
You know what I love about crystalline PV? Besides the falling price? The lack of rare earths. Oh yeah, it's actually distributed too...

Add Your Comments

To add your comments you must sign-in or create a free account.

Stephen Lacey

I am a reporter with ClimateProgress.org, a blog published by the Center for American Progress. I am former editor and producer for RenewableEnergyWorld.com, where I contributed stories and hosted the Inside Renewable Energy Podcast. Keep...