WASHINGTON, DC, November 18, 2019 (ENS) – Officials from the United States and Australia today signed a memorandum of understanding pledging cooperation to secure a steady supply of the energy mineral resources essential for meeting the world’s booming demand for electric vehicles, smartphones, jet aircraft, and solar panels.

Fannon

Frank Fannon is the inaugural holder of the U.S. Assistant Secretary of State for Energy Resources position. The former mining and oil industry executive was sworn in May 29, 2018. (Photo courtesy U.S. State Dept.)

U.S. Assistant Secretary of State for Energy Resources Francis Fannon and Australian Ambassador Joe Hockey signed the first MOU of its kind to come out of the new Energy Resources Governance Initiative, or ERGI, launched by the U.S. Department of State on June 11 and convened with other founding partners at the UN General Assembly on September 26.

The countries joining the United States in forming ERGI are Argentina, Australia, Botswana, Brazil, the Democratic Republic of the Congo, Namibia, Peru, the Philippines, and Zambia.

China mines more rare earth elements than any other nation, by far, and today’s MOU forges a partnership between the second and third largest producers – Australia and the United States.

The Energy Resources Governance Initiative covers the 17 rare earth elements along with 14 minerals including copper, lithium, cobalt, uranium, nickel, and manganese.

By signing today’s MOU, the United States and Australia say they recognize that global demand for energy minerals will increase steeply in the coming years, presenting complex challenges for countries endowed with these minerals.

Under the International Energy Agency’s New Policies Scenario, the number of electric cars on the road will grow from about three million in 2017 to 125 million by 2030. Electric vehicles increase demand for battery storage minerals including lithium and cobalt.

To increase the tension, China suggested using rare earth elements as leverage in the ongoing trade war with Washington, causing concern about the potential for interruption of the manufacture of mobile phones, electric vehicles, batteries, and fighter jets.

The 17 rare earth elements are lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium, scandium, yttrium.

Tesla

The Tesla Model 3 Long Range electric car uses the rare earth element neodymium for its magnetic motors. May 23, 2018 (Photo by Marcus Zacher)

These elements are essential for many products but so rare that a business decision by one company can throw the supply stream into chaos.
For instance, Tesla’s move to a magnetic motor in its Model 3 Long Range car that uses the rare earth element neodymium adds to the pressure on supplies of neodymium that has for years been under an export ban by the top producer China.

Efforts by governments around the world to cut harmful emissions from petrol-powered cars is driving demand for electric vehicles and the metals used to make them, such as lithium and cobalt, which are key ingredients for EV batteries.

Praseodymium is used as an alloying agent with magnesium to create high-strength metals used in aircraft engines.

The radioactive decay of promethium is used to make a phosphor give off light which is converted into electricity by a solar cell. Promethium can be used as a source of x-rays and radioactivity in measuring instruments.

Dysprosium and erbium each are used to make the control rods in nuclear reactors that absorb excess neutrons and stop fission reactions from getting out of control.

Holmium can absorb neutrons so it, too, is used in nuclear reactors to keep chain reactions under control. Samarium is used as a neutron absorber in nuclear reactors.

Europium oxide, one of europium’s compounds, is widely used as a red phosphor in television sets and as an activator for yttrium-based phosphors, also used in making red phosphors for color TV picture tubes.

Gadolinium is used to make gadolinium yttrium garnets that have microwave applications. Gadolinium compounds are used as green phosphors in color TV picture tubes. Because of its magnetic properties, gadolinium is also used in intravenous radiocontrast agents for magnetic resonance imaging (MRI).

Scandium is used in aluminum-scandium alloys for aerospace industry components and for sports equipment such as bicycle frames, fishing rods, golf iron shafts, and baseball bats.

Scandium iodide is used in mercury vapor lamps, which replicate sunlight in studios for the film and television industry.

Terbium, a silvery-white, rare earth metal, is used in low-energy lightbulbs and mercury lamps and also in circuit boards.

Thulium is used to create lasers and in microwave equipment.

Lutetium oxide is used to make catalysts for cracking hydrocarbons in the petrochemical industry. Lutetium is used in cancer therapy, and because of its long half-life, is used to date the age of meteorites.

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More than half of the global mined cobalt production comes from the Democratic Republic of the Congo. 2017 (Photo by Fairphone)

“What we see is an opportunity to provide a government to government engagement,” Fannon, the top U.S. energy diplomat, said in an interview with Reuters September 26. “U.S. companies require a certain set of above-ground conditions regardless of what’s below ground.”

In a statement today, the U.S. State Department said the new MoU “promotes responsible and sustainable mining practices in the energy mineral sector.”

The MOU “supports resilient supply chains of energy minerals by facilitating trade and industry connectivity, and establishes measures to meet expected demand for clean energy technologies including involvement of financial institutions in mining and processing projects,” the State Department said.

Geoscience Australia and the U.S. Geological Survey also signed a project agreement today paving the way for both nations to work more closely on understanding each country’s geological resource potential for critical minerals, including rare earth elements, and developing a path to supply arrangements.

Australia’s Minister for Resources and Northern Australia Matt Canavan, who attended the MoU signing in Washington, said, “This is a partnership that will deliver opportunity and security to both nations.”

“Growing global demand for critical minerals means there is huge scope for Australia to develop secure and stable supply chains to meet the growing demand for critical minerals in key economies such as the U.S. The United States has a need for critical minerals and Australia’s abundant supplies makes us a reliable and secure international supplier of a wide range of those, including rare earth elements,” Canavan said.

ERGI will encourage development finance and export credit institutions to support responsible and sustainable mining projects; facilitate modern resource surveys to understand energy mineral prospects; and emphasize the connection between renewable energy demand and the impact on resource-rich countries.

The State Department says the MoU and ERGI reflect the increasing global urgency to develop best practices for sustainable mineral development underpinning clean energy technologies.

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