Do you know where the Rare Earths in All your Gadgets come from?

Precious rare earths metals (REM; not the band) are in our computers; they’re in our cell phones, televisions, hospitals, and trains — and more and more, they’re in our electrified vehicles.

Rare earth permanent magnet (PM) applications have grown rapidly over the past few years, and are projected to keep doing so. As market demand continues to grow for electrified vehicles and electrical gadgets that run on specialized rare earth magnets, more and more light is being shed on where these rare earth metals are actually being mined, and where some of their most strategic customers want them to be mined.

Today, China is the most dominant supplier in the rare earth metals market. However, it was not always so: the US was lead supplier of rare earths and REM technology into the early 1980s. In a post-COVID-19 supply chain world, with every supply network being re-engineered for a new level of resilience, other countries (most notably the United States) have been increasing efforts to localize their rare earth mining and reduce dependence on foreign trade to acquire them.

As rare earths applications increase, it is only natural that the call for transparency about sourcing grows with it. Responsible Sourcing is an increasing priority among participants in the RE mining and metal production business – just like in any business. It is simply good for business to be able to show you operate fairly, treat your workers well and that you buy your materials from responsible suppliers.

However, Responsible Sourcing remains an opaque issue. Rare earth mineral mines are most common in just a handful of countries, which vary greatly in size, population, regulatory approach, governance and GDP. The truth about rare earth mining practices and actual application of mining regulations is hard to find. For example, a simple google search on the status of rare earth mining regulations and status of enforcement action re: same, produces information from a decade ago that is almost the exactly the same as in 2020, (paraphrasing): “There are many calls for reform, esp. in China, but there is little actual information about the status of reform measures.”

For example, China has been making statements about plans and attempts to crack down on illegal rare earth mining for nearly a decade now. When asked about their efforts just last year, the Chinese Ministry of Industry and Information Technology (MIIT) claimed they were making it easier to subpoena rare-earth companies practicing illegal mining, increasing penalties for being caught, and that they were establishing a “traceability system” to stop illegal market buyers. This is nearly the same thing they were saying on the subject four years ago.

As demand for rare earths rise, so will the calls for improved transparency on sourcing. The illicit mining practices taking place in the Congo over cobalt, or in Nigeria over gold, suggests a few challenges ahead for rare earths sourced from non-transparent mining interests. Very soon, leading electric vehicle companies like Tesla, Chevy (Bolt), and Nissan (Leaf) will either prove that their rare earth magnets and batteries were responsibly sourced, or watch as some sort of large industry exposé forces them into a literal mine field of public scrutiny. We’ll keep you posted.

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