Compass World: Rare Earth
Never one to shy away from ambitious projects, the European Union (EU) has pledged to lead Europe to become a carbon-neutral continent by 2050. The EU isn’t just talking a big game; it intends to make good on its promise. And, by some estimates, it’s already making sizable strides.
The EU aims to have 20 percent of its energy in 2020 sourced from renewable energy. In 2018, they reached 18.9 percent; a German think tank estimated that, in 2019, they hit 34.6 percent. By 2030, the continent wants to cut greenhouse gas emissions by 40 percent from 1990 levels. Considering how quickly the continent is constructing green power installations—for example, solar installations doubled between 2018 and 2019—this is no pipe dream.
If the EU has its way, there won’t be any pipes to dream of at all. However, these surface-level successes should not be accepted at face value. Europe’s headlong pursuit of green energy means a hugely increased demand for minerals, metals, and rare earths, but getting the resources out of the ground isn’t always easy. If done improperly, “green” resource extraction threatens to perpetuate the environmental exploitation that fossil fuel extraction already causes.
Europe really is committing to green energy. Led by Germany, solar installations have popped up across the continent. (Twitter)
To build the world’s arsenal of wind turbines, solar panels, and electric cars—to say nothing about smartphones, laptops, and servers—Europe needs metals. Not just the usual aluminum, tin, copper, concrete, and steel, but also the rare earths: neodymium, yttrium, dysprosium, europium, terbium, and palladium, among others.
Needless to say, acquiring these metals requires mining. And that’s only where the problem starts.
DIGGING THE PLANET’S GRAVE
Mining is responsible for 10 percent of the world’s greenhouse gas emissions, and that amount is sure to increase as the demand for most metals skyrockets. Meanwhile, mines themselves cause deforestation, habitat loss, pollution, contamination, and poisoning. In the United States, metal mining is the country’s greatest source of toxic pollutants. More than a quarter of all mines around the world are within ten kilometers of protected lands, threatening indigenous populations who often have no say in mining projects.
Often, high amounts of water are pumped into mines to help flush out valuable metals and rare earths. Not only can this procedure deplete necessary aquifers, like in Chile’s Atacama desert, but that water can’t be reused. To separate the desired metals from the impure ore around them, toxic chemicals are added to that water. Rare earth metals are not actually rare, but because they are bundled up with other minerals in an impure form, large quantities of water and chemicals are needed to extract them.
The resultant wastewater, known as “tailings,” is often deadly to the environment, filled with toxic chemicals better buried in the earth. To prevent environmental degradation, wastewater is kept in “tailings dams,” which have a horrendous record of breaking—even in countries with strong environmental laws. In 2000, a tailings dam in Romania broke, dumping 100,000 cubic meters of cyanide-laced tailings into the Danube River. Since 2015, the same Brazilian company, Vale, has been responsible for two tailings dam disasters that led to hundreds of deaths.
In 2015, 880,000 pounds of toxic wastewater from the Gold King mine in Colorado spilled into a nearby river. (Wikimedia Commons)
Even inactive mines can still leak, and those leaks can poison the surrounding environment for more than a century. California’s Mountain Pass rare earths mine still leaks radioactive waste. In most cases, the public bears the fiscal and environmental costs of cleanup.
Furthermore, the infrastructure needed to connect mines to the world can lead to deforestation for miles and miles around the mine. In Brazil, between 2005 and 2015, deforestation increased to 70 kilometers around the mines, contributing to 9 percent of the Amazon’s deforestation over that same period. The infrastructure around mines can then open up previously inaccessible areas of forest to loggers and farmers. Deforestation already contributes to around 20 percent of the world’s carbon emissions, and mining only exacerbates this problem, even if it’s in service of “green” energy.
Deforestation around a mine in the Amazon Rainforest. (Wikimedia Commons)
The economic story writes itself. To stop climate change, governments and businesses promote and invest in renewable energy policies, committing to eliminate fossil fuels from the economy’s diet. Demand for minerals, metals, and rare earths shoot up to meet the renewable energy push. Prices for things in the ground skyrocket, and existing supply might not be able to keep up. Old mines, once abandoned for lack of profitability, come back to life -- after all, they can get rich quick. As companies mine deeper and deeper, they’ll find ores of decreasing quality, which require higher volumes of water and toxic chemicals to properly extract and use. So, water is pumped underground, forests are demolished, wastewater dangerously accumulates, and the planet’s temperature still rises. In the most ironic twist, the increased need for mining will only increase the world’s demand for energy, prompting more extraction.
Hey, but at least electric cars will be in vogue!
A MINOR ISSUE
Lithium-ion batteries power phones, computers, and electric cars. To successfully electrify the world’s automobiles, we’re going to need a lot more of it, and cobalt is indispensable to lithium-ion battery production. A whopping two thirds of the world’s cobalt is concentrated in the Democratic Republic of Congo (DRC), a country beset by conflict, corruption, and foreign corporations.
The demand for cobalt is projected to reach nearly seven times its 2018 level by 2030—when the EU wants to cut its greenhouse emissions by 40 percent, partially through promotion of electric vehicles. Everyone wants cobalt, and, thanks to it, the DRC has a serious child labor problem. That problem might only get worse as demand for copper rises. As Fortune details multiple times in its report, tech companies have found it exceedingly challenging to know if their batteries are sourced ethically, to say nothing about the environmental sustainability of their operations.
Artisan miners in the Democratic Republic of the Congo sell their supply to middlemen, mostly from Chinese companies. (Wikimedia Commons)
While the demand for ethical supply chains has pushed companies to reconsider their ties to resource-rich and law-poor African countries, governments are probably more worried about what happens to the metals they need after they leave Africa.
SUPPLY CHAIN TURNED SUPPLY CAGE
Most of the DRC’s cobalt heads to China—as of 2020, 80 percent of the world’s cobalt sulfate, the material that actually makes lithium-ion batteries, is produced there. Read: China nearly monopolizes battery production. China also cheaply produces many of the world’s rare earth metals. Read: China is indispensable. In today’s globalized economy, most government planners aren’t terribly comfortable with that.
It’s not that Europe and the U.S. don’t or can’t produce their own rare earths. For one, Europe has lots of resource deposits lying around—they’re just expensive to open and are currently unprofitable. And, before China got in the game, California’s Mountain Pass mine actually produced 70 percent of the world’s rare earths. However, Mountain Pass was shut down in 2002—partially due to radioactive leakages and increasing domestic environmental concerns, partially due to growing Chinese competition.
From the air, California's Mountain Pass mine looks nestled in between distant mountains. In reality, it sits on a highway right next to the Mojave National Preserve. (Wikimedia Commons)
In the 1990s, China started producing rare earths on the cheap. Long aware of the horrendous environmental impacts that its burgeoning mining sector had, it traded its environment and its laborers for economic growth.
But, in 2011, China used a trade dispute with Japan to impose export quotas on its rare earth minerals and thereby tamp down domestic production. China’s move shook the global commodities market and left Europe and the U.S. scrambling to change how they could secure their supply. (In response, the same Mountain Pass mine that was considered so dangerous ten years ago was reopened by 2015.)
Remember, China is a monopolizer. For example, 52 percent of China’s rare earths exports head to Europe; 80 percent of the United States’ rare earths imports come from China. Any future supply shocks from China could cripple the EU’s industries and its push to go green. So, by 2018, as its green energy initiatives were progressing, the EU was also finalizing ambitious plans to make its raw material production great again.
Obviously, Eurpope can’t domestically produce every metal in the world. But if it can get something at home, it seems ready to try. Speaking on the EU’s plans to revamp its domestic mining industries, Jane Korinek, an economist at the Organization for Economic Cooperation and Development (OECD), remarked, “If trade tensions continue and countries wish to guard against supply risks, they may invest more heavily in extractive industries.”
RACE TO THE BOTTOM
Europe’s plan to bring resource extraction back to Europe stands at odds with the former rich-world consensus on extractive, “dirty” industries like mining. Larry Summers, an economic advisor to President Obama, a Treasury Secretary under President Clinton, and a former World Bank Chief Economist, said in 1991:
“Just between you and me, shouldn’t the World Bank be encouraging more migration of the dirty industries to the LDCs [Least Developed Countries]? […] A given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.”
The governments and businesses of most industrialized countries didn’t find anything wrong with that advice, especially since it makes consumer products cheaper. So, in what economists term a “race to the bottom,” industries traveled to countries where they could produce the cheapest. Often, that meant going to countries with worse environmental and labor laws. The French government, for example, closed the 200 uranium mines in France and moved uranium extraction to huge, deadly, leaky mines in Niger. Developing countries like China were more than willing to sacrifice their environment and their laborers for economic growth.
Bringing mining back to Europe means recognizing that Summers’s cold logic applies to them, too, no matter how much richer they might be compared to African and Asian countries. As EU policymakers might eventually decide about their own member states, “the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable.” In Europe, mines are likely to be built in poorer regions and areas near protected lands.
For all the hype, the EU’s raw materials plan says nothing about whether—or how—local communities will be involved in this necessary economic decision-making.
In Caceres, a city in western Spain, an EU-backed mining project is constructing an open-pit mine barely 800m from the city center, a UNESCO World Heritage site. Organizations like this one are fighting against the project. (Translation provided automatically through Facebook.) (Facebook)
The mining industry also has other problems. In the United States, Civil War-era legislation has provided mining land to huge corporations on the cheap while letting them off the hook for any environmental problems. Not to mention that mining across the Americas and Africa has often violently displaced indigenous peoples and local populations. It is not yet clear how the EU plans to address either concern.
EXPLOITATION, BUT GREEN
To be sure, sourcing energy from fossil fuels is contributing to dangerously increasing changes in the Earth’s climate. Switching to green energy really will combat climate change, but limitless extraction in service of green energy does not sound like a very nice future for anyone who lives near a mine. Continuing down this path leads to a future where the rich and powerful reap the benefits of sustainability—but nobody else.
Europe is no longer the only place to commit to such ambitious climate goals. This September, Chinese President Xi Jinping promised to make China carbon-neutral by 2060. While the exact logistics of the plan are murky, China certainly has the capability to make that future a reality. Still, their government will face the same problems associated with a headlong rush into a renewable future. How will China and Europe balance the fine line between environment and exploitation?
There is an answer to that question, but it doesn’t sound pretty. Multiple analysts have argued that, as it stands, “growth can’t be green”: there is no sustainable way to save the planet while also catering to the economy’s growing energy and resource demands while also pursuing policies promoting economic growth.
Indeed, the idea of “green growth” is a buzzword that’s been tossed around by eco-friendly economists for the past decade. Policymakers believe that crafting the right market incentives can both decouple humanity from its resource dependence and stimulate the economy. But as multiple studies show, even the most optimistic climate plans cannot decouple growth from resource extraction.
To increase GDP, the world needs to produce and consume more. To produce and consume more, the world needs more energy. To get more energy in a way that’s okay for the planet, well… see above. Treating the imperative for economic growth as a given, plans to tackle climate change only perpetuate the exploitations and extractions of the past. But this time, they’re painted green.
OUTGROWING GROWTH
There is a growing consensus that ending the cycle of production and consumption for its own sake might be the only way to save the planet. It isn’t actually as hard as it sounds, according to anthropologist Jason Hickel:
“Ending growth doesn’t mean shutting down economic activity—it simply means that next year we can’t produce and consume more than we are doing this year. It might also mean shrinking certain sectors that are particularly damaging to our ecology and that are unnecessary for human flourishing. … We can improve people’s lives right now simply by sharing what we already have more fairly, rather than plundering the Earth for more.”
That take has friends even in the OECD, normally a bastion of orthodox economics:
“The Advisory Group argues that we need to go beyond growth, to stop seeing growth as an end in itself, but rather as a means to achieving societal goals including environmental sustainability, reduced inequality, greater wellbeing and improved resilience. This requires updating the philosophy, tools and methods underpinning the analysis that influences economic decision-making.”
Climate change can be stopped. And it’s a good thing that the EU and, now, China, are pulling out all the stops to help achieve that goal. If they can’t, the planet may change irreversibly. But, despite their policymakers’ best intentions, they might not succeed if they can’t fundamentally reevaluate their economic priorities.