The Dark Secret Behind Clean Energy: Rare-Earth Mining

ABHINAV YARLAGADDA

Everything comes at a price. Renewable energy is often depicted as entirely clean and sustainable, but proponents often overlook the inherent pollution generated by producing green technology. While the benefits of renewable energy greatly outweigh the ESG risks associated with them, it is still essential to totally reduce these risk factors to create a more sustainable future. Each form of renewable energy has its own problems, but one common issue neglected among all of them is the use of rare-earth elements. 

Crucial to industries ranging from defense systems to smartphones and automobiles, rare-earth metals also play a pivotal role in the transition towards clean energy. Rare-earth elements are composed of 17 elements, including all the lanthanides in addition to scandium and yttrium. Although they are called rare-earth, these elements are fairly abundant in the Earth’s crust. Yet, to call them rare is not exactly a misnomer either, because their concentrations are quite low in extracted ores. Furthermore, only nominal amounts of rare-earth elements are used in electronics, but due to the scale of electronic devices sold every year, that amounts to quite a large quantity. Coupled with rare-earth elements being critical to the functionality of many electronics, the large volume necessary to sustain a global economy has resulted in the demand for rare-earth minerals potentially doubling in less than a decade.

Green technology is even more dependent on rare-earth metals for production, especially compared to conventional fossil-fuel based technologies. For example, an electric vehicle (EV) requires 6 times the amount of mineral resources as conventional cars, and onshore wind farms average 9 times more necessary inputs than a typical coal-fired plant. The main reason for the substantial rare-earth usage in the clean energy industry is due to the significant number of components incorporated into batteries and motors containing trace amounts of minerals. While rare-earth elements are considered to be energy transition minerals, only 4 elements are relevant to clean energy production: neodymium, dysprosium, praseodymium, and terbium. Despite so much focus being placed on lithium deposits, these rare-earth minerals are just as paramount for facilitating a sustainable future through renewable energy. In fact, rare-earth elements are continuing to grow in prominence due to the accelerating transition towards clean energy. Moreover, wind and solar energy are projected to have a compounded annual growth rate of 9.4% and 20.5% respectively, making them the fastest growing source of renewable energy. However, they also require the greatest proportion of rare-earth metals in contrast to other energy sources, diminishing the value of clean energy actually provided.

Shifting towards the environmental, social, and governance (ESG) perspective is where many of the concerns regarding rare-earth mining arise. Mining as an industry is notorious for the lapses in regulation and the many environmental ramifications caused by negligent practices. Specifically, these operations take an extreme toll on the land by devastating habitats, decreasing environmental resilience, and ruining soil quality. This often leads to the displacement of communities that depend so heavily on the agriculture nearby, as most located near rare-earth mines do. Water contamination is another critical issue associated with rare-earth mining as acid mine drainage poisons the already limited fresh water supply. Access to safe drinking water is severely impaired, leading to situations where rare-earth element particles have been detected in urine samples of people living in nearby areas. If the concentration of these elements build up in the human body, the effects will be catastrophic: ravaging organs, triggering chronic conditions by damaging DNA, and even inducing cancer. Due to the outright lack of environmental standards and laws, communities are forced to deal with the external effects of the pollution caused by mining or be displaced. But dealing with those external effects is not as easy as one might think. Mining activities are also responsible for practically irreversible damages as rare-earth elements can remain in the soil for exceedingly long periods of time, rendering the nearby land useless and uninhabitable to local communities all in the name of short-term profits. The utter corporate greed in the mining industry is shocking, but the environmental degradation does not stop there. 

Rampant air and water pollution are also repercussions of reckless practices commonly instituted by the rare-earth mining industry. Extremely high volumes of water must be used for mining, which exacerbates the lack of clean water, especially if improper wastewater discharge manages to enter into a river or other bodies of freshwater. Rare-earth metals have a distinctive threat compared to other minerals since they also include radioactive elements like uranium. Some of the rare-earth elements also have radioactive isotopes, posing more challenges to worker safety. Another crucial concern is the disposal of tailings and toxic leaching into groundwater, which can be very deleterious to human health and other organisms. Tailing ponds are often left exposed to the elements, enabling pervasive contamination of the surrounding environment, which can become even more perilous with flooding risks. When looking at air pollution as well, noxious gasses are released since chemicals must be injected to extract rare-earth ore, drastically increasing the danger of rare-earth mining. This can create a positive feedback loop where global health problems arise from bioaccumulation as organisms higher up in the food chain consume greater concentrations of toxic chemicals, potentially being fatal for humans.

The issues with rare-earth mining don’t just stop with environmental destruction as there are social and governmental aspects to consider as well. In a social context, worker safety is disregarded with the prevalent use of child labor in the mining industry to keep costs down and remain competitive. Rare-earth mining has indirect effects as well, such as a disturbing insight with women being disproportionately affected by the negative impacts of mining. Rare-earth mining has indirect effects as well, such as a disturbing insight with women being disproportionately affected by the water contamination from mining. In addition, corruption and black markets generate colossal profits as the rare-earth market is ripe for smuggling. From a governance and regulatory standpoint though, the main threat to the industry is an alarming monopolistic control of rare-earth element resources by China. By out-competing other miners due to their low prices, China became the dominant producer of rare-earth elements with over 80% of the market share. China also exhibits tight control over the industry by processing over 90% of all the rare-earth minerals produced. Accordingly, China has the ability to create a cartel similar to OPEC as already demonstrated by the embargo they imposed on Japan over a shipping conflict. The concentrated geopolitical power China holds over the rare-earth industry is extremely frightening as the transition towards green technology inherently requires exorbitant amounts of rare-earth metals to make it possible. To remove dependence on China, domestic sources of rare-earth minerals must be developed. However, the environmental costs handed by the EPA to mining corporations make it cost-prohibitive for mining rare-earth elements in the US. Additionally, it takes approximately 16 years from the discovery of a potential mining site to getting the site fully operational, which causes supply to be very inelastic. Therefore, rare-earth mining poses a clash of conflicting interests, where a successful transition to renewable energy also involves intense environmental deterioration, societal challenges, and complex geopolitical power dynamics.

That being said, there are innovative methods and strategies for mitigating these ESG risks, which must be implemented quickly to ensure the sustainability of the clean energy transition. One of the best strategies would be creating a circular economy based on a policy of recycling and reusing rare-earth metals. By overcoming the limited accessible supply of rare-earth minerals, more economic independence from China’s rare-earth production will promote a resilient global renewable energy industry. As more and more EV batteries reach the end of their life cycle by 2030, recycling for rare-earth components can become more and more popular since demand will be surging. Besides recycling, there will continue to be reductions in rare-earth element usage for electronic components as technology advances. There are also ways of extracting ore with bacteria instead of chemicals or just replacing ore with coal ash altogether. With these promising new methods, it is of foremost importance to integrate environmental concerns early on in projects so that they can be addressed throughout mining operations. Uniform international environmental standards could also play a vital role in incentivizing mining companies to improve their social and environmental performance.  As new advances shape the field of rare-earth elements along with regulations instituted to internalize the various issues posed by mining, human society will truly become more sustainable, constituting a big step in the right direction.