CSP Today investigates the availability of Cerium, a rare earth used in the silvering process and addresses concerns around a potential Chinese- Cerium monopoly.
By Paul French
There are some disputes over rare earths – for instance, Washington says China has 36% of the world’s rare-earths; Beijing says the percentage is just 23%. However, both agree that right now China accounts for approximately 95% of the global supply of rare earths as China moves swiftly to exploit its REE (Rare Earth Elements) deposits. Beijing has known about its REE advantage for quite some time - Deng Xiaopingdeclared as far back as 1992 that, “The Middle East has oil. China has rare earths.” Rare earths are found elsewhere (Africa and Australia mostly) but are harder to extract. They’re also crucial to the manufacture of many everyday items from cell phones to camera lenses and also, importantly for this article, one rare earth, Cerium (Ce), is used for catalysers and silvering. Cerium is not easily replaceable in the silvering process for panels. Cerium is also used as polishing powder, adding yellow colours in glass and ceramics, in self-cleaning ovens and as flints in lighters.
And here’s the potential problem for the global CSP industry - some have expressed fears that China could limit the mining and export of Cerium to preserve and support its own industries. For instance, a recent paper from the EU’s Joint Research Centre (JRC) Institute for Energy and Transport entitled Scientific Assessment in support of the Materials Roadmap Enabling Low Carbon Energy Technologies: Concentrating Solar Power Technology, observed China’s role in Cerium production and noted, “There is, therefore, some risk of a shortage if China were to limit its use to its own industries."
Others see things differently though. Michael Komesaroff who runs Urandaline, a consultancy specialising in China’s commodities sector and the regular “Metals Man” columnist for the China Economic Quarterly journal, told CSP Today that, “Cerium is interesting precisely because it is the most abundant of the 17 REEs. It’s also known as a light rate earth which, as a general rule, are more abundant and less valuable than the heavy rare earths which are in strong demand for new applications like super magnets.” Komesaroff also notes that China is some way from holding a monopoly on Cerium – “Outside of China two rare earth projects are very near completion – Australia’s Lynas Corporation’s rare earths mining project in Malaysia and America’s Molycorp’s Mountain Pass rare earth mine in California. Both of these have a high proportion of light rare earths, especially Cerium and the consensus view is that by 2015 cerium will be in over supply.” Komesaroff’s views were echoed recently by another veteran analyst, the Institute for the Analysis of Global Security Senior Fellow Jack Lifton, in The Critical Metals Report. Again, as further evidence, this February the Nikkei Index in Japan expressed its view that Cerium would be in surplus in 2012 – the market prices said it all: Cerium at just US$38/kg while more scarce REEs such as neodymium fetched US$145/kg and dysprosium at US$1,800/kg. Cerium is a bargain basement rare earth at the moment.
It should also be noted that there are other potential supplies of Cerium globally - in Scandinavia, the Baltic States and South Africa for instance. So it appears that Cerium supplies should remain available and not overly dependent on China alone. However, Cerium demand is rising too, not least from the emerging CSP sector, and so more will be required from various sources.
CSP expansion globally is partially driving demand but catalyst manufacturers in all sectors require additional supplies. Molycorp has contracted to supply American conglomerate W.R. Grace with an undisclosed amount of Cerium for fluid catalytic cracking(FCC) catalyst manufacturing through to 2015. Lynas’s new refining facility at Kuantan in Malaysia is also said to have ample customers for its Cerium. Additionally Lynas’s huge Mount Weld mine in Western Australia is now shipping Cerium.
Still, China’s actions have caused waves in the REE industry. Beijing has already imposed quotas on exports of various REEs since 2006. In March 2012, the US, EU, Japan and Canada lodged a complaint with the WTO, claiming that Beijing was unfairly restricting exports of REEs to benefit its domestic industries.
Most analysts agree that there are good and bad reasons for China’s restraining exports. The bad is that Beijing could attempt a monopoly on production of some REEs. By constraining exports of REEs and requiring foreign investors to set up down stream processing in China they can preserve a monopoly position. The good is most obvious in Baotou (in Chinese Inner Mongolia), where most of the light rate earths are mined, Baotou is an environmental disaster zone. To try and reverse this Beijing wants to consolidate REE production among several large firms who they can hold more environmentally responsible rather than the plethora of smaller, rogue miners now working the area.
So China will continue to mine Cerium and probably continue to sell it on the open market to all buyers while other sources around the world are opening up reducing Beijing’s ability to establish a monopoly. Good news for the CSP sector – among its many worries and challenges hopefully Cerium will not be a major one.
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