January 2012

Recycling in Production Creation Process

We Need to Make Recycling Part of the Product Creation Process

By Bill Robertson, Redemtech

Gadolinium, praseodymium, cerium, samarium, lanthanum, neodymium. These are just a few of the 17 elements known as rare earth metals. So what do these elements have to do with the flooding in Thailand? Are the current high prices based upon a natural disaster or because of the limited supplies of rare earth metals?

Rare earth elements are used in a variety of applications including green energy, wind power and computers. But are they really rare? Not really. They’re actually quite common elements. The problem is more about how difficult they are to mine, and the resulting expense in removing the elements from the rock during the mining process. So how do the floods in Thailand affect the pricing in hard drives and their availability? Is it really the floods, or is it something else that’s causing the market shift?

China controls about 97% of the current supply of rare earth metals, which they actively mine. Worldwide shortages for these elements would create the avenue for increasing price points, based upon supply and demand. It also means that shortages would stall production of all kinds of electronics for companies, except of course those operating in China. Shortages could be created by the floods in Thailand, or by China’s internal policies on cornering the market and only supporting its own companies.

In January 2010, China’s Ministry of Land and Resources invoked a seldom-used mining law to take direct control of 11 rare earth mining districts, to further its control over the worldwide supply. A month later, China announced that it would become a net importer, based upon the increased domestic demand. China has also stated that it will become the world’s largest source for solar energy production. Keeping companies in China means employment opportunity based on products like smart phone touch screens, wind turbines, fuel cells, hard drives, and other green technology which uses these elements in their products. Like the memory factories that catch fire every couple of years, China is actually behind the increasing costs of the hard drive at the very root level. But it’s not being talked about.

That’s not to say that the natural disaster didn’t push the current frenzy in the hard drive production. It just so happens that in Thailand, some of the parts being created with rare earth metals were produced by companies that had as much as an 80% market share for certain parts internal to the hard drive, such as the fluid dynamic bearing motor (hard drive spindle) and the voice coil motor, or VCM. These parts, which were then sold to OEM’s, also helped to create a problem across all OEM’s, and not just the production facilities affected by the Thai floods. A double combination of supply and demand for elements and hard drives, along with the natural disaster, has created a shortage and problems for business which seems to be all positioned outside of China.

With 97% of the production, China is controlling its own destiny and creating a worldwide problem for those businesses outside of China. A classic move in controlling a market through supply and cornering the market and not playing nice with the other countries by limiting the exports and disrupting the supply chain for companies outside of China.
Is this an opportunity for others, including the U.S.? Yes, the demand is there, supply is very limited, and prices are high for these elements (at least until China releases supply, which reminds me of the dynamics in the oil industry). The U.S. has a mine that was shut down in the 90’s because of the eco-unfriendliness of the mining process. India has the ability to create further supply. And so the race is on…

Increase mining! What about increasing recycling instead?
Since these products are produced from chemistry, the originators understand the makeup of the product from the start. What would happen if all products being produced would also need to have to have a plan for being able to take that product back to its original constituent chemicals? Why is recycling an afterthought to the product-creation stage?

How many hard drives that have been taken out of production were disassembled and then sorted according to the recycling plan? Not too many. From 2005 to 2010, shipments of hard drives were estimated at over $4.6 billion. How much could have been recycled vs. creating further mines that are so eco-unfriendly? In a perfect ecological system, we wouldn’t have to keep developing mines, if we could return those products back into their original elements.

We would also create more jobs with the reverse process, through true recycling. This is what the government should be doing–creating eco systems based upon re-use, re-purposing, and recycling product in its most efficient re-use, accomplished with legislation. For those products being produced in other countries and imported into the U.S. – this can create further business opportunities if the government supports laws ending the exporting of this type of equipment and developing the next business frontiers here at home, where the consumption exists.

After all, one person’s trash is another person’s treasure. Trash might be more important than the product in the coming years!

A first step towards making this change is the passage of the Responsible Electronics Recycling Act (HR 2284/S1270) for more information www.americanrecycling.org