LEMONT, Ill.--(BUSINESS WIRE)--From phones to fighter jets, a range of devices and machines rely on rare earth elements that are mined and refined largely in China. Disruptions to this supply can have wide-ranging consequences, but the understanding of how those disruptions play out in global markets is limited. Researchers at the U.S. Department of Energy’s (DOE) Argonne National Laboratory are using a unique computer model to understand the effects.
Most of the 17 elements classified as rare earths are not actually rare, but they are difficult and expensive to extract from the ground and separate from each other. Rare earth elements are essential to many emerging technologies, including those that support a clean energy future. They include neodymium, praseodymium and dysprosium, which are components of energy-efficient permanent magnets used in wind turbines and electric vehicles, among other products; and gadolinium, which you might recognize as the contrast agent you take before an MRI. The U.S. government classifies these elements as critical materials in part based on their importance in manufacturing products that support national security.
China dominates the global rare earths market. The country produces an estimated 58 percent of mined rare earths, and it controls roughly 85 percent of the world’s refining capacity. The U.S. accounted for more than 15 percent of rare earth mining output in 2020, but this material is exported for value-added processing and production.
A variety of disruptive events can affect the supply of rare earth materials, including natural disasters, labor disputes, construction delays and — on everyone’s mind at the moment — a pandemic.
In a recently published study, Argonne researchers analyzed the potential effects of three supply disruption scenarios on 10 rare earth elements, along with a handful of associated compounds, to determine the market effects. To conduct the analysis, which was supported by the U.S. Department of Defense’s Defense Logistics Agency, they used Argonne’s Global Critical Materials (GCMat) tool.
GCMat is an agent-based model, which is a computational framework for simulating interactions among different entities in a given system.
The results of the study highlighted which rare earth elements may be particularly vulnerable to disruptions.
In general, the analysis found that in the case of temporary scenarios — a one-year export stoppage and a two-year mine shutdown — price impacts tended to extend years beyond the disruption period.