Replacing rare earths and ‘other’ technology metals: world technology to take a step backwards?
Mea culpa. I was wrong in 2011 when I said that if rare earth prices kept rising then the OEM automotive industry would “engineer them out.” I didn’t realize that there was then, and is now, no intention whatsoever of engineering out the weight savings and energy efficiency of rare earth permanent magnets in motor vehicles. Instead the trend has been to add water to the soup to make it go further; I mean that engineering research has concentrated on determining the minimum amount of rare earths that can be used to achieve the same result. This type of engineering research was certainly not a priority until the rare earth bubble alternately expanded and deflated after 2007. The problem has become one of minimizing the amount of rare earths per vehicle as world production of motor vehicles has resumed its steady and dramatic increase. Less use per individual vehicle is mandatory if the total number of vehicles produced is increasing faster than the increase from new production and recycling of the critical technology metals’ resources.
The “technical” press, which is still stubbornly uninformed about such matters reports frequently that a laboratory scale use of some relatively common material is the prelude to the replacement of a technology metal by that material. This type of manufacturing illiteracy has long been common in the OEM automotive industry press corps, in particular, with regard to the replacement of the platinum group metals as active exhaust emission catalysts. This has been going on for as long as those catalysts have been used. Investors who today are becoming interested again in the platinum group metals should note, by the way, that the global new production of platinum and palladium today is only around 200 metric tons each and that of rhodium is around 30 tons. I recall first hearing about a research program to replace these catalytic metals in 1979. The pressure to replace them is magnitudes greater than any pressure to “replace” the rare earths. The answer, as with the rare earths, has been to use as little as will give the desired effect and, in the case of the platinum group metals, to intensively recycle.
The problem is simply stated: the properties of the individual chemical elements that give rise to their use in technologies beneficial to humans cannot be duplicated by simple substitutions. Membership in the periodic table of the chemical elements is the most exclusive club in the universe. The study of the electronic properties of materials is in its early stages, historically. So far it looks like the useful (to us) electronic properties of materials are due to the electron configurations of the outer shells of their atoms. These shell properties in turn are dependent on the makeup of the nucleus of the atom. All we humans can do is study this and make the best out of what nature has provided us. We CANNOT engineer atoms to our specifications.
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The Samsung Corporation, one of the Korea’s and the world’s largest manufacturer of high-tech consumer goods is based in a country, The Republic of Korea, which has no domestic resources of technology metals. The Korean government has just in the last three years organized a national effort to source and stockpile technology metals and minerals critical to Korea’s economic survival as a high tech manufacturing powerhouse. Korea , of course, just as China and Japan, would prefer to mine or buy raw materials and process them into industrial components and assemblies in Korea, and, of course, Samsung is one of the key technology companies to which the Korean government has turned to help create a total domestic key technology metals supply chain.
In the meantime in a classical example of corporate self-serving double-speak Samsung has allowed the servile journalists in its sector to put about the story that Samsung is working diligently to replace the rare earth in their applications. That must be why quasi-governmental entities such as KORES are scouring the world for rare earth resources. China and Japan, of course, already have and use stockpiling of critical metals for their domestic industrial and military security.
The point I am trying to make is that the rare earth permanent magnet, the rare earth laser, and the rare earth phosphor are the reasons that Samsung and every other similar company has its huge high tech mass produced consumer device business. Rare earths allow the miniaturization of the components of high tech mass produced consumer devices that transform electrical signals into motion, sound, images, and light. They cannot be replaced economically or practically.
I’ve been looking for an analogy to explain the sheer nonsense of wasting ink or electrons to say that after several generations of chemical processing research and development to enable sufficient rare key technology metals to be produced to support the mass production of high tech miniaturized consumer electronic devices, which themselves are the result of a century of research and development in physics and materials, a company, say Samsung, has decided to embark upon a research program to replace these materials and technologies. I’ve come up with this analogy: The US military which can no longer get rare earths, tungsten, or antimony because they are only produced and processed by an enemy has decided to forego the use of “smart” weapons, armor, armor piercing ammunition, and electronically controlled aircraft and ships and will equip its forces with the latest steel edged weapons and bronze armor. Portable phones will be provided to general officers along with wagons to transport the antimony free lead acid batteries required to power them.
In the history of the world technology has never taken a step backwards. Do you want to bet that will be reversed anytime soon?
Those nations that do not encourage long term investments in the production, refining, and fabrication of technology metals will not be high tech consumer product producers much longer. The clock is running.
Jack Lifton is the Sr. Editor for InvestorIntel Corp. and is the CEO for Jack Lifton, LLC. He is also a consultant, author, and lecturer ... <Read more about Jack Lifton>