Real bottleneck for the West’s rare earth supplies are processing capabilities and large quantities

Real bottleneck for the West’s rare earth supplies are processing capabilities and large quantities

So, Japan is a very interesting country and I actually want to walk you back to 2010 because they were the first country on Earth to be on the other end of China’s rare earth export restrictions after they got into a fishing twler dispute. And for for Japan, which has a really robust manufacturing sector, this was immensely consequential. Now, what Japan also realized during this time was they didn’t have rare earths on land. So they developed a robust strategy to secure rare earths from around the world and then bring them back home for processing. However, what’s really important to note is that the processing capabilities that they built for above ground rare earth mining is actually different to what we do with underwater nodules. So for a lot of countries that are in the pilot stage, including Japan, they still have to develop the processing capabilities for deep sea mining nodules to be able to take those and turn them into something they can use into their manufacturing capabilities. However, it’s important to know that Japan has used robust industrial strategy to address some of these mid-stream and downstream vulnerabilities over time. So, I have no doubt that they would continue to lead in this capacity going forward. Gracand, uh, you know, as we take another look at this, uh, map here, Minami Torishima, uh, island looks like it’s a heck of a long way from China, right? Is it in waters where this project or these ships rather these Japanese ships are going to in any way be at risk or under threat from I don’t know Chinese intervention patrols obstruction or anything anything of a of that sort? That’s a great question and if you look at uh deep sea mining not only in Japan but in the US one of the big challenges that we don’t talk about is maritime security and I want to throw that in a few different ways. The first is that where there are ships and they are dual use. So in many of these waters um including near the coast of the US, a lot of the operations could be dual use and we don’t really know how to monitor them. And what this does is it creates a real maritime vulnerability that we haven’t worked out how to address because this is a relatively new industry. I think the second component that I would add to that is where there are maritime security risks given you have the international seabed authority as a governing body here they have not created a framework for maritime governance. So this could potentially be something where when you have a major maritime incident some of this these activities could be paused at a time when geopolitical tension in the seas are absolutely on the rise. Yeah. Yes. So, Graceland, we’ve talked about cost. We’ve spoken as well about some of the geopolitical risks. I do want to ask you about the environment because when we think about terrestrial mining for rare earths, there is of course an environmental cost, but certainly we have heard scientists, environmentalists warning about the potential damage that deep sea mining can have on uh the marine ecosystem as well. Is there a way that at least at this stage that we know of that this can be conducted whilst minimizing that impact? This is one of the hottest topics related to deep sea mining and one of the reasons that deep sea mining has become incredibly political. Um we see this playing out in various countries. There are we are starting to introduce monitoring systems for the seas. But what I would say in caution is it’s still very early on. Just as we don’t fully understand about whether we can do this commercially viably on scale uh uh you know at scale the same thing goes for the environmental impact of it. And so one of the obligations that Japan is going to have as a leader and a first mover in a lot of these efforts especially at the depth that they’re pursuing is to monitor the environmental implications and remedy them if needed. But a country like Japan has the technological capabilities to do that which is the key benefit that they have to potentially unlocking deep sea mining capabilities worldwide. So I guess pulling it all together, this is clearly still frontier technology. There is still a lot of experimentation going on. How should our viewers read this next move? Keeping in mind as well that the US president signed that executive order in April as well to fasttrack some of this potentially going forward. Is this if we look at it as a long time long-term time frame 10 years or so potentially a gamecher here or do we need to be looking at something else when we’re talking about weaning off China when it comes to rare earths? So the last two months have shown us just how precarious we are for rarers and what we’ve seen is that as China rolled out these export restrictions in April every part of the world was impacted manufacturing in Japan, Europe and the United States halted as a result of the shortage. Now the difficulty is you know we’ve had a start and stop process with getting rare earth and permanent magnets moving. The reality is we need them now. I mean in the US the restrictions went into effect in April and by the end of May our automotive industry in certain parts of the country stopped producing certain types of cars because of the rare earth shortage. So we need to alle supply as fast as possible and we’re seeing this happen. We’re seeing projects in Australia get fasttracked. We’ve seen Lionus commence in uh Malaysia with Japanese offtake. We’re accelerating our efforts in the US, California, and Texas. We’ve signed anou with Saudi Arabia to build build a mine to magnet supply chain. So, we’re absolutely unlocking all of the efforts we can. And some of these are have already come online in the last month and will continue to come online over the next two to three years. However, the reality is that in the long term, not only do we need a more secure supply chain of rare earths, we actually need a lot more of them in quantity because rare earths are critical for so many technologies that we associate with economic growth, artificial intelligence, and these really key um industries that are emerging. So at the end of the day, you know, identifying new sources in places like, you know, underwater in Japan are going to be critical, but remember that our critical bottleneck is not just the supply of rarers. I mean, we produce them here in the US. It’s building those processing capabilities. So, you know, we’re going to need supply as quickly as possible, and we’re doing that. But, you know, Japan, I think, in the underwater offers us a longer term supply, which again, we need it all.

Gracelin Baskaran of CSIS says Japan’s push to develop deep sea rare earth mining manufacturing capabilities are crucially needed. She also discusses the various issues surrounding deep sea mining, such as maritime security and environmental concerns.