Department of Mineral & Energy Economics Professor Daniel J. Packey, Ph.D. Head of the Department of Mineral and Energy Economics Curtin Graduate School of Business Curtin University Rare Earth Markets and Their Affects on Solar and Wind Power

Department of Mineral & Energy Economics

Few (if any) Known Substitutes

Department of Mineral & Energy Economics

Source: USGS

Department of Mineral & Energy Economics 2009 Mine Production World Mine Production and Reserves (2009 Data) CountryProduction (Metric Ton)Reserves (Metric Ton) United Statesinsignificant13,000,000 Australiainsignificant5,400,000 Brazil65048,000 China120,00036,000,000 Commonwealth of Independent Statesnot available19,000,000 India2,7003,100,000 Malaysia38030,000 Other countriesnot available22,000,000 World total (rounded)124,00099,000,000 Source: USGS

Department of Mineral & Energy Economics Source: USGS

Department of Mineral & Energy Economics

Source: USGS

Department of Mineral & Energy Economics Rare Earths Price Index

Department of Mineral & Energy Economics REO Price Increases in 2010

Department of Mineral & Energy Economics China has significant influence of rare earth pricing and has, in the past, used it to the disadvantage of competitors. The financial markets may not be willing to bear this risk. Market Domination Source: USGS

Department of Mineral & Energy Economics China’s export and tax regimes on Rare Earth Oxides, element and metals restricts supply outside of China and “could be seen as a lure to bring Rare Earth Technology manufacturing facilities into China where the export quotas do not apply.” Leveraging Resource Advantages Source: USGS

Department of Mineral & Energy Economics China’s strategic resource monopoly can be viewed as sovereign dominion over critical resources, related technology and intellectual property "There is oil in the Middle East. There is Rare Earth in China". Deng Xiaoping (1992) Source: USGS

Department of Mineral & Energy Economics Salt or Caustic Fusion Acid leaching Multistage solvent extraction Resulting in: A dark grey slightly radioactive (Thorium and/or Uranium) sludge laced with toxic compounds Rare Earth Processing

Department of Mineral & Energy Economics

Source: IEA

Department of Mineral & Energy Economics Source: IEA

Department of Mineral & Energy Economics

The total market share for Chinese wind turbine manufacturers is 30.5% Mostly permanent magnet machines Chinese Market Participation Source: USGS

Department of Mineral & Energy Economics

Permanent Magnet Rare Earth Supply Chain

Department of Mineral & Energy Economics

Source: Dr. Bogi Jensen

Department of Mineral & Energy Economics Permanent magnets for generators and other electrical machine consume 40% of rare earth based magnets In 2010, 26,000 tons of Rare Earths 2015 estimate is 48,000 tons 15-30% deficit to production Roskill Information Services Dependency

Department of Mineral & Energy Economics

New Vestas Largest Windmills are still wire wraped, geared generators. The Permanent Magnet markets will be strongly influenced by the Chinese Control of the Rare Earth Markets Windpower developments

Department of Mineral & Energy Economics All currently manufactured thin film PV solar cells need either Indium or Tellurium – both of which are Rare Earth Elements Thin Film PV Source: USGS

Department of Mineral & Energy Economics

The total market share for Chinese photovoltaics manufacturers is 27% Mostly thin film photovoltaics Chinese Market Participation Source: USGS

Department of Mineral & Energy Economics 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 (July 2010) 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. A Potential Chinese Development Strategy Source: ttp:// earth-resources-increase-chinese-clout

Department of Mineral & Energy Economics

The new solar cells convert light into electricity using a semiconductor material made of copper, zinc, tin, and sulfur--all abundant elements--as well as the relatively rare element selenium (CZTS). Reaching near-commercial efficiency levels is a "breakthrough for this technology," says Matthew Beard, a senior scientist at the National Renewable Energy Laboratory, who was not involved with the work. Potential Competition in Photovoltaics

Department of Mineral & Energy Economics PV Thin Films will be significantly influenced by Chinese Rare Earth Market Control Due to market share soften by Availability of Potential Substitutes Photovoltaic Developments

Department of Mineral & Energy Economics Chinese will continue to dominant the rare earth refinery market due to refinery by-products. This is independent of ore resources and They are likely to use this to access (and influence) new modern renewable energy (and other) technologies markets. Rare Earth/ Wind Power and Solar Market Future

Department of Mineral & Energy Economics

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