Every single high-tech electronic appliance you use on a daily basis depends on rare-earth elements. Your phone, your computer, your microwave: these elements are vital for the maintenance of society as we know it.

A set of 17 elements in the periodic table, rare earths are not, as the name suggests, particularly rare (with the exception of radioactive promethium) – they are in fact plentiful in the earth’s crust. But they’re only plentiful in certain areas, and herein lies the problem. Currently, China alone produces 97 per cent of the world’s rare earth supply, an uncomfortable geopolitical situation for some.

In 2010, China exported 39,000 tonnes of rare-earth elements (23,310 of them to Japan), but in the first half of 2011 slashed its export quota by 35 per cent, much to the anxiety of tech manufacturers worldwide. China cited ‘environmental concerns’ as the reason for its restrictions (mining just one tonne of rare earths results in the loss of 300 square metres of topsoil), but rumours of territorial ambition, the country’s disgruntlement over the exclusive economic zones of islands in the East China Sea, and its own economic self-interest, are rife in
the industry.

Will Smith, Fund Manager for City Natural Resources High Yield Trust, believes China’s export restrictions came as a result of a planned economy. “China has identified that it will be using a lot of its own production”, he says. “They’ll have a five-year plan and say, ‘We want X different types of programmes,
so we’ll need X amount of rare earths. Why should we sell them when we’ll need them in the future?’ And as a result getting your hands on rare earths is becoming increasingly challenging.”

Regardless of China’s new export strategy (recently ruled illegal by the World Trade Organisation), the fact remains that the planet faces a serious short-term supply problem. Smith explains: “There are around 120 rare earth companies listed around the world now, but the urgency is getting them into production, and that takes time and money. Come 2017/18, rare earths won’t be a concern at all, but until then, there’s going to be a very short supply.”

Considering that Japan has recently discovered an enormous source of rare earths on the floor of the Pacific Ocean around Hawaii proffering an estimated 80-100 billion tonnes of deposits (a gigantic figure compared to global reserves of 110 million in China, Russia and the US combined), the long-term security of the materials is of little concern (although Smith does note that rare-earth mining and refinement is rife with environmental and safety concerns – including radiation worries – which can be time-consuming to mitigate). But what’s to be done in the meantime?

For its part, Japan announced plans in February to invest $1.34 billion in finding ways to cut its use of rare earths, with Tsutomu Morisaki from Japan’s Trade Ministry noting: “We’ve been supporting research and development in areas like reducing the amount of rare earth in abrasives by allocating money from our annual budget
as well.”

Hitatchi Metals, for example, is working on a process to minimise the use of rare earths by employing copper alloys instead, and researchers at the University of Tokyo have developed a technology that allows the recovery of neodymium (a component used to make high-strength magnets for speakers and computers) from scrap magnets to be carried out without creating toxic byproducts (previously developed ‘wet’ methods resulted in harmful liquid waste containing heavy metals).

Indeed, it has been technically possible to recover and recycle rare-earth elements from many electronics for a number of years now, but the low price of virgin metals has meant there was no financial incentive to develop the technology further or use it in any meaningful way. China’s decision to cut off its supplies forced a bit of innovation in the field, though.

Dowa, a company that has led the way in rare-earth recycling, has had more impetus to pioneer new and efficient ways to recover rare earths from Japan’s ‘urban mines’ (read: landfills and stockpiled used electronics). Japan’s National Institute for Materials Science estimates that used electronics in the country hold an estimated 300,000 tonnes of rare earths (as well as three times the annual global consumption of silver and gold and six times the world’s yearly platinum requirements). And so, the northern town of Kosuku, whose fortunes were originally built on traditional mining, is witnessing a mining of a different sort.

At Dowa’s plant here, computer chips and other vital parts from electronics are hacked into two-centimetre squares before being smelted into a molten stew, from which minerals are extracted. The factory processes 300 tonnes of materials a day, and each tonne yields about 150 grammes of rare-earth metals. A small quantity perhaps, but this is nonetheless 150 grammes of metals that would otherwise remain buried as waste.

As Utaro Sekiya, Manager of Dowa’s recycling plant, notes: “It’s about time Japan started paying more attention to recycling rare earths. If we can become a leader in this field perhaps China will be the one coming to us to buy our technology.”