Neodymium. You say you never heard of it? If you worked at Japanese firms Hitachi, Mitsubishi, Panasonic, or Sharp, your companies would be spending a lot of time trying to find this product, called a “rare 
earth”. Rare earths are light-weight, malleable metals that are essential to hybrid cars, cell phones, and hard disk drives. (Toyota Prius batteries use neodymium to power the car). Hundreds of other Japanese manufacturers also depend on them. And they had all counted on China, which produces 97% of the world’s supply of neodymium, dysprosium, didymium, and other rare earths, as the supplier.
But the latest issue of Businessweek (Jan.11,2011) describes how China has cut its exports of rare earths by over 3/4, driving up prices more than four-fold this past year. (Neodymium is now at $40/lb.) China wants to free up supplies for its own manufacturers, as well as reign in a very toxic industry.
So what is Hitachi doing ? The firm, which makes everything from nuclear power plants to home appliances to the Prius batteries, uses 600 tons of rare earths per year. The answer is recycling (Supp.5). Hitachi’s new facility in Matsudo City carefully saws open A/C compressors to retrieve rare earth magnets inside. It takes 2 workers 8 minutes to get to the prize inside each used air conditioner—4 wafer thin magnets containing 30 grams of rare earth metal. A separate conveyor belt feeds used disk drives into a massive machine, which pops out rare earth metal ready for harvesting. Other Japanese companies are following Hitachi’s lead in mining discarded products such as washing machines. The bottom line: China’s decision has prompted a whole new recycling industry.
Discussion questions:
1. Why did China cut its supply? What were its motives?
2. How might recycling of rare earths impact the world and its economy?
3. Why are rare earths so important and what other sources are going to be available?