The Dirtiest Side of EVs: Rare Earths and Conflict Metals
A difficult look into the most troubling side of the growing proliferation of EVs and hybrid vehicles.
Rising global temperatures caused by spiking levels of carbon dioxide in the atmosphere make a clear case for cleaning up our environmental game. That is, at least, if we want to still inhabit planet Earth in a few generations' time.
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In the United States, the transportation sector is pointed to as the most significant contributor of those emissions, so any technology that lessens the environmental impact of how we get from A to B is a good thing.
However, when it comes to EVs and hybrids, vehicles that are widely seen as harbingers of a cleaner future, an unfortunate dark side is clouding their potential environmental benefits. The motors in most of these vehicles rely on a set of elements collectively called rare earths, while the batteries that power those motors depend on other metals that are in short supply.
The scarcity of these elements is a challenge, but the more significant issue is where they're found. Their mining can be directly attributed to everything from literal slave labor to small-scale environmental catastrophes. This is a difficult topic, but let's start by digging into the basics of the situation as it stands and what you should know before you buy your next electrified ride.
What Are Rare Earths?
While many elements are rare (some extremely so), the term "rare earths" has a very specific definition.
"Rare Earths are a group of 15 elements often found together, and they're used in a very wide array of applications due to magnetic, luminescent, catalytic, or other properties," Daan de Jonge said. He's product director of critical minerals and multi-commodity at Benchmark Mineral Intelligence, which specializes in global tracking of materials related to the EV supply chain.
It's the magnetic properties of these elements that make them valuable for the creation of permanent-magnet motors. "Principally, praseodymium, neodymium, dysprosium, terbium, and samarium are the 'magnetic' rare earths,” de Jonge said. “They are used in rare-earth permanent magnets, which are the most powerful magnets in the world and crucial in modern motor systems."
As you can read in our extensive guide, permanent magnets are vital to many types of electric motor construction.
Given that EV sales were up 50 percent last year in the U.S., if that trend continues, we're going to need a lot more of these elements. The International Energy Agency estimates we'll need to increase production of these elements by a factor of 10 before the decade is out to meet global Net Zero goals.
Where to Find Them
Rare earths are found in many places, but they tend to be sourced from unfortunate locations. According to the U.S. Geological Survey, China produces 70 percent of the global supply. The U.S. ranks second at 14 percent, with Australia, Myanmar, and Thailand rounding out the top five.
For certain elements, such as dysprosium, China has a veritable stranglehold. "China is the largest producer of dysprosium, with a near monopoly on the refined product," Ambrose Conroy, an auto supply chain expert and founder of Seraph Consulting, said. The likelihood of developing sources elsewhere is low. "The world could but is not likely to develop an alternate source greater than 10 percent of the dysprosium market anytime soon."
According to Benchmark's de Jonge, even tracking the source of materials that enter the market through China can be challenging.
"A lot of clay mining happens in Myanmar, in Kachin," he said, adding that it is primarily conducted by the Kachin Independence Army, a difficult situation we'll delve into in just a moment. "All of Myanmar's mined material goes directly across the border to China. It is incredibly hard to know who is involved. We estimate Myanmar accounts for more than 40 percent of mined dysprosium, under horrible conditions."
What sorts of conditions? Gird yourself, this is difficult reading.
Environmental Impacts of Mining
Mining techniques for rare earths depend on the type of soil they're found in, and the different types of mining have different environmental implications.
"Typical mining operations for rare earth mines vary from hard rock to heavy-mineral sands and ionic adsorption clay operations," de Jonge said. "For hard rock assets (the most common), metallurgy is complex and expensive."
Rare earths are generally intermingled with other elements, some of which are extremely problematic on their own, like thorium and uranium. Processing these requires reagents like hydrochloric acid or kerosene, which pose yet more challenges. "Cheap operations in poorly regulated jurisdictions can have negative environmental impacts," de Jonge said.
That is putting it mildly. Thorium and uranium are problematic on numerous levels, while the reagents that de Jonge mentions can have disastrous impacts. If treated and disposed of properly, that isn't necessarily an issue. Sadly, that isn't always happening.
According to de Jonge, Myanmar has "a complete lack of waste disposal." This has resulted in major swaths of Myanmar becoming a virtual wasteland.
Other Impacts of Mining
While the environmental impacts are troubling, the human aspects might be even more so. Myanmar is again the most tragic example, with military-owned mining companies that use threats and violence to quiet those who would complain.
According to the Institute for Policy Studies, attempts at addressing the situation have not gone well: "Reports signal that when village leaders have tried to file complaints about the impact of rare earth mining on their land and livelihoods, they have been met with threats and intimidation from militias. In some cases, villagers have been beaten or imprisoned for speaking out."
"Rather than invest in heavy machinery,” Seraph Consulting’s Conroy said, “countries are chasing direct foreign investment. Much of this investment has come from Chinese firms, backed by Beijing, and these countries are forced to accept working conditions that no consumer goods industry serving Western markets would tolerate."
New Sources Coming Online
There is some positive news for alternative sourcing. "There is strong government support in both the U.S. and Australia to develop an ex-China rare earth supply chain," Benchmark's de Jonge said. Governmental support means not only helping with regulations but also providing funding to overcome the substantial initial cost of these operations.
Wyoming has the potential to be one of those sources. American Rare Earths recently completed analysis of a proposed operation at Wyoming’s Halleck Creek site. It's still years away, but if the project goes forward, the company’s analysis suggests it could extract as much as 1.8 million metric tons of magnetic rare earths from the single site per year. That’s far greater than the 210,000 metric tons China produced in 2022 according to the USGS, and it’s theoretically enough to ensure complete independence from problematic foreign sources.
The real question is cost. According to the American Rare Earths report, their costs could undercut those of a major Chinese supplier by more than 20 percent, but that’s theoretical at this point. Today, on the global market the cards are stacked against non-Chinese suppliers.
"It is very hard to build the supply chain for some rare earths outside of China and Myanmar because their operations keep prices low," de Jonge said, adding that Myanmar has "no real costs" thanks to an unpaid workforce and the aforementioned lack of waste disposal. "Chinese operations are supported by the government and can sustain non-economic prices."
Conroy agrees, saying that it's up to the government to define some minimal environmental, social, and governance (ESG) tiers for suppliers.
"The United States can and arguably should maintain high ESG standards for domestic mining, but they must be paired with consistent government support so that these mines can stay competitive," he said. "In the meantime, given the long timeline to set up a domestic supply chain, the U.S. must reengage overseas and obtain direct access to critical minerals without China or any other foreign rivals owning a step in our supply chain."
Battery Passports
Cleaner, more ethical supplies for rare earths would help the situation significantly when producing EV and hybrid motors. There are also potential solutions that avoid the need for rare earths in electric motors altogether. But that still leaves the battery situation, which relies on different rare materials such as cobalt.
The sourcing of these materials is also problematic and challenging to track. But that's changing thanks to global efforts around creating so-called battery passports.
"A battery passport aims to track key information about a battery through its life cycle, including material provenance, manufacturing history, usage data, and more," Conroy said. "The goals are to enable battery recycling, ensure responsible sourcing, and maintain safety standards."
The standards necessary to set up and reliably track these passports are still being developed. Still, early initiatives from groups like the Global Battery Alliance, which counts many global OEMs and battery manufacturers among its ranks, already look comprehensive. An early battery passport for an example battery from Audi tracks everything from its composition to the various origins of its components.
This tracking will not only ensure more visibility into the ethical sourcing of battery materials but could also be a boon for recyclers to further automate their processes.
However, Conroy cautions that it could make already expensive batteries even pricier. "Supply chain teams aren't ready for any of it right now,” he said. “If this adds more red tape, it will drive up costs. If battery passports become a proactive way to fend off sustainability issues, that will be great. If it becomes a reactive approach, supply chains and launch timelines will be disrupted and the EV adoption curve will move out."
Counterpoints
There is certainly more bad news than good here, but it's important to put all this into a greater context. Rare-earth mining has been undeniably devastating to many places, but it's impossible to calculate those impacts when pitted against the global impact that the oil industry has had.
Anyone old enough to remember the Exxon Valdez incident in 1989 knows what a massive disaster it was at the time. Sadly, that is only the fifth-largest spill to pollute American waters. In 2010, the Deepwater Horizon incident spilled more than 10 times that much oil into the Gulf of Mexico. And there are plenty of other impacts of global oil drilling and refining operations, the latter of which make up 4 percent of global CO2 emissions.
Right now, there are no good answers to the downsides of battery and electric motor construction. But as a consumer, you can push manufacturers for more transparency in their sourcing of rare earths and other troubling elements. Once battery passports come online, that at least should help make choosing ethical transportation easier.
