Ep 57: Julie Klinger 'Rare Earths, Real Insight'

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Michael Liebreich: Before we start if you're enjoying these conversations, please make sure that you like or subscribe to Cleaning Up, it really helps other people to find us. Cleaning Up is brought to you by the Liebreich Foundation and the Gilardini Foundation. Hello, I'm Michael Liebreich and this is Cleaning Up. My guest today is Professor Julie Klinger, Assistant Professor of Geography at the University of Delaware and also affiliated with the new program on minerals, materials and society. She's a global expert on rare earths, and she wrote a book called Rare Earth Frontiers: From Terrestrial Sub-Soils to Lunar Landscapes. Please welcome Julie Klinger to Cleaning Up. Professor Klinger, Julie, welcome to Cleaning Up.

Julie Klinger: Good afternoon, Michael, thank you for having me.

ML: So tell me, where are you calling in from? Where are you at the moment?

JK: I'm calling in from the lovely town of Newark, Delaware. I'm a professor here at the University of Delaware in the Department of Geography and spatial sciences. And currently all is peaceful and quiet it's, 8am here.

ML: Fabulous. Well, thank you so much for choosing to spend part of your morning with us here. And you are a slight rarity on Cleaning Up because you're not somebody that I've actually met. Pretty much everybody else I think everybody else I have met before and interacted with. And so I brought them on to Cleaning Up to share their points of view. In your case, I saw a podcast and you were talking about China and you were talking about rare earths and you were talking about so many things of such core importance to the clean energy and the net zero transition, I thought I got to get Julie onto the show. So thank you for joining us here.

JK: Delighted to be here. Eventually, someday in our post pandemic world, we'll have the pleasure of meeting in person.

ML: I hope so, I hope so well, depending on how the next 45 minutes or so goes. But can we do the following now, the audience here is they're all interested I suspect in the net zero transition. But there'll be at very different levels of knowledge. Some of them are, you know, deeply wonky. They're policy experts. Some of them are engineers. Some of them are just interested business people, financiers, and so on. Can we just start with the overview of rare earths I mean, you've written this book, if I get the title, right, it says “Rare Earth Frontiers: From Terrestrial Subsoils to Lunar Landscapes.” So you know, we are going to run very broadly. But let's start just with the over the overview. What are rare earths?

JK: Oh, excellent question. So, the term rare earths refers to 17 chemically similar elements. Most of them are found in the lanthanide series, which is if you can picture the periodic table in your mind, it's kind of that island to the south, the top bar of that number is 57 to 71 plus scandium and yttrium, which are up in kind of the sort of mainland, if you will, of the periodic table. And these elements are distinguished by their really fantastic magnetic and conductive properties. And this is what makes them so essential to just about every kind of technology that you can think of because they enable miniaturization, they enable things to be smaller and faster, and more lightweight. I mean, it's really thanks to rare earth elements that our computers are the size of our smartphones and laptops and not the size of this building, for example. But in just about every sector, whether it's energy or scientific instrumentation or medicine or IT, communication, space technology, military technology, you're going to find rare earths in there somewhere.

ML: Okay, and what are the kind of what are the top two or three and what do they do because that's a that's a fabulous overview of the group but there's a few that really kind of are needed in magnet so there are a few that are needed to dope into various what tell us what the top.. What do…Can you give us your favourite rare earths.

JK:

Okay, well, I guess if I had to pick a favourite rare earth element, it would be neodymium. Neodymium is a fantastically magnetic element. So if say if, for example, you had a neodymium magnet that's, you know, maybe the size of like a small coin, and you tossed it on your refrigerator. You would need to saw out the door of your refrigerator to get this magnet off of it. Otherwise it's not coming off. And so, these are the magnets that are really important in wind turbines in high-speed rail transport and in a number of other transportation and navigation applications. So, it's kind of you know, I guess if there's any workhorse and also a hero of the lanthanide series, it would be neodymium.

ML: Okay, neodymium and something like drones, we have drones. And they have these teeny weeny little motors that sit there and they lift this thing. You know, when I was a kid, you had an electric motor, and it was it was this big, right? And it wasn't very powerful. And is that all down to neodymium?

JK: Neodymium is definitely an important element. So depending on what kind of drone you're talking about, and we can definitely get into the weeds on this if you want to. But generally, you'll have a blend of neodymium and samarium. Samarium is not considered a rare earth element, but it is very important to technological applications as well. And actually, while we're on the subject of introducing rare earth elements, I do want to say, for those out here who might be surprised by this, despite their name, rare earth elements are not rare. I looked into the history of this, why are we calling something rare when it's not actually rare? And I found that chemists were lamenting the misnomer as early as 1907. And the best reason that I can find for why rare earth elements continue to be called rare earth elements, I mean, it's parlance, that's why I say rare earth elements instead of referring to the lanthanide series, or <inaudible>, is honestly because calling something rare is I think a little bit more exciting than calling it by its proper name. And if you look at the way geopolitics around these elements have played out over the past decade plus, yeah, that certainly would seem to support that analysis.

ML: You're making my job very easy, because my next question would be, how rare are they? Are any of them physically rare in the Earth's crust? Let's start with that.

JK: Yeah, that's a good question. The good news is that the most commonly used elements, right, lanthanum, cerium, neodymium, these are pretty common in Earth's crust about as, to give you an idea or comparison, about as common as copper or lead. And, of course, copper is very important. And we're concerned about, you know, meeting demand projections for that with a renewable energy transition. But you know, in terms of our applications, for the rarer rare earth elements, like promethium, or even praseodymium, we actually have very limited applications for these. So promethium, for example, is very peculiar, because it isn't found as a naturally occurring element, it's actually a byproduct of nuclear reactions. So you might find it in spent nuclear fuel rods and nuclear power plants and things like this. And the kinds of applications that we've come up with for this element are or were, for example, you know, painting the watch dials on your wristwatch, so that they glow in the dark, or things like that.

ML: That's very disappointing for promethium. You think that with a name like that, it ought to be kind of, at the very least, you know, giving us a kind of a complete new energy revolution?

JK: One would hope, right, I mean, well, maybe it still needs to grow into its name.

ML: Parents are a bit disappointed at the moment.

JK: Oh, such a shame.

ML: So they're not they're not rare. And can you talk through what is the sort of processing you've said that you've, you've kind of hinted at some of the issues already, which is, in that case, the case of promethium, it's a byproduct of a nuclear reaction, some of them are only ever found associated with other minerals and, and some of them not, and so on. So what's the what's the process of extracting one of these rare earths and turning it into something that can be used in as a magnet or, or in an electrical component?

JK: That is a, I guess, to put it glibly, it's a hot and heavy process. Now, because rare earth elements are chemically similar, they're actually very difficult to separate. And through much of the 20th century, this was the challenge with respect to rare earth elements, which is why applications for rare earths didn't really explode until the latter quarter of the 20th century. First, we had to figure out how to properly separate them. And so and so generally what happens and we'll just follow the supply chain from the mine to you know, the export site or what have you. Um, generally what happens if you're mining a hard rock deposit, like what you have in Bayan Obo, the single largest source of rare elements in the world, which is located in Inner Mongolia, in China, or, you know, similarly, if you're looking at a site like the Mountain Pass facility in Southern California, you've got to do a lot of blasting to liberate the raw material from its mountainous, rocky home, you've got to grind it up, and then you have to subject it to a whole series of, a sequence of roasting, cooking, whatever you want to call it, high temperature acid baths and things like this so that you're slowly separating, first you have to separate the rare earths which you actually want from what's called the parent material, the rest of the stuff that you don't want. And generally, you know, you're looking at maybe 2 or 3 or 4% of the total stuff you dig up is actually rare earths and things that you need,

ML: And the rest of it ends up just in huge tailing dams, or is the rest of it useful for anything else?

JK: The rest of it currently ends up in huge tailing dams or huge piles. It is useful for other things, there's a lot of other good stuff in there, particularly you know, if we're interested in things like gold or thorium, or, you know, even uranium depending on the deposit that you're looking at. But we currently don't organize our mineral extraction activities to make total use of the stuff we dig up, you know, one company with one focus really pulls one thing out of the earth, and the rest just sort of piles up. So, this is kind of this is where the environmental footprint really starts.

ML: If you go to Bayan Obo, somewhere like that, how big, how much have they done? How many kilometres? How many square kilometres? How big are we talking?

JK: Well, the, the entire mining complex measures about 15 kilometres from end to end, if you drive from one end to the other, lengthwise, and then about five kilometres, if you drive from north to south. Now I've described the dimensions roughly of a rectangle, it's not a real rectangle, it's sort of, you know, there's blobby areas and things like this. And, you know, these, these piles will be, you know, probably, I would say 50-60 metres high. And so it's really, we're talking about tremendous sums of earth. I guess, I wish that I could do a sort of back of the envelope calculation.

ML: We'll say millions and millions of tonnes. We can't really go far wrong back, because it's certainly going to be at that order of magnitude. And under these. Have you visited the facilities, have you been there and looked at either that one or all the elsewhere in the world in Australia, or California or Canada, or the other places? Or some of the other placed they’re  doing some of this?

JK: Yeah, so visited facilities in China, the Bayan Obo facility in particular, and then the processing facilities in Baotou, which are located a little to the south, along the Yellow River. And I've also visited facilities in Brazil and in California.

ML:

And do you see lots of people running? Are these just a huge mining trucks and no humans? Or do you see lots of humans, you know, on a scale from sort of huge mining truck to people carrying things, you know, up ladders on their back? Where are we on the on the extraction?

JK: So in those three facilities that I mentioned, we're talking about sophisticated operations, huge mining trucks operated by skilled personnel. The kinds of places that you have in mind, these are more common, or were more common in southeastern China.

ML: Artisanal mines.

JK: Correct. More, yeah, artisanal, I guess is a is the way that you could call it and of course, other terms are used, like illegal and  black market and things like this. And what actually accounts for that difference in the possibilities of for technology and labor, when it comes to extraction is whether it's a hard rock deposit or a clay deposit. The ones where you have people hauling things on their backs, or had people hauling things on their backs, those were clay deposits. I mean, you didn't need heavy equipment or explosives to get at the good stuff. Whereas with a hard rock deposit, you do need explosives and heavy equipment.

ML: Okay, so we're painting a picture here or you're painting a picture, I'm just teasing it out of you. That of these of the mining and then presumably they're doing that pre-processing some, you know, crushing and acid bath, so they're doing that locally because they don't want to shift these millions of tonnes we've established to the processing facilities which are some distance away, but they then take a bunch of stuff to the processing facilities, and then it gets separated out further, right?

JK: Correct. To clarify the crushing, preliminary crushing does happen on site. And the purpose of this is just to get everything ground down to kind of a uniform granularity. And we can come back to this later when we talk about alternatives and different possibilities because that uniform granularity is really interesting and important. And then in the case of Bayan Obo in China, this stuff is put into rail cars or large trucks. And it's hauled about 200 kilometers south to Baotou, where, where the heavy chemistry and roasting and all of this happens.

ML: Okay, so it is still truck loads that are rail truck loads that are being removed. And I mean, where are we going with this, is it has a huge environmental footprint? So, is that is the extraction site the worst? Or is that processing plant in Bayan Obo is that worse? Where is the real concern here from an environmental perspective?

JK: Well from you know, from an environmental perspective, and of course, an environmental perspective is always also a human health perspective. There's, I guess there's… I guess the key factor here is actually how well protected your laborers are. So for example, in Bayan Obo, if you have protective respiratory equipment, you're much less likely to suffer the longer term consequences of being exposed to pulverized and particularized heavy metals that come up. However, once you get near the once you get closer to the sites where a lot of that heavy industrial processing is taking place. It's actually you know, when I visited, it was really quite ghastly, I have to say, because I was looking at a landscape that had endured over 40 years of heavy industrial processing without really much regard for social and environmental safeguards. And so, you know, you stand on the edge of these tailing ponds, and you kind of feel like you're looking at, well, I think the moon would probably be more beautiful. I was gonna say, it's like you're looking at the moon, but no disrespect to the moon and lunar landscapes and what have you. And then the other thing, though, is that one of the results of this, you know, 40, plus, well 50 plus years of heavy industrial activity taking place in this about 200 kilometer corridor, whether it's mining, transport or processing is that you have the proliferation of heavy metals into the general environment. So, one of the characteristics of this deposit in Bayan Obo is that it's also very rich in arsenic and fluoride. And these, you know, left deep underground don't cause a lot of trouble for people. But once they are dug up, and pulverized and released into the general environment, then they become… then they're transformed into a form that can be absorbed by animal and human tissues. And this has created a lot of very specific health problems for people and livestock in the area.

ML: Right, and I mean, it sounds really apocalyptic, frankly. I'm wondering if it's worse than what was going on in Europe or the US and in the US, you've got these Superfund sites now, that are still a problem to clean up. But this feels like it's a kind of an some kind of an equivalent that is still very much going on, is it getting worse? Or is it now getting better in China?

JK: Oh, that's a great question. So since about 2015, it was just beginning when I first visited in 2012, and 2013, but really, it's picked up steam since about 2015, there's been a pretty massive central government investment in cleaning up these areas. And so, you know, in sort of Chinese central government fashion, you know, everything is on the table, and the worst contaminated sites have been evacuated, and people have been resettled into entirely new cities. And in other cases, smaller scale mines, like the ones for example, where you have people hauling clay on their backs or what have you, a lot of these have been shut down. But even, you know, respectable, small and medium operations that were privately run, or were joint ventures had been closed or had to consolidate into a state owned industry. And the idea was that this would actually control a lot of the runaway production that really took off in response to increased demand for rare earth elements. And then also I've been tracking this via satellite in the past few years, because I haven't been able to return to Bayan Obo in the past few years, but one of the things that I've noticed is that the tailings pond> in Baotou, like the one that was really responsible for a lot of the contamination of surrounding agricultural land and really responsible for leaching acids, heavy metals and radioactive waste into the Yellow River. It's been… slowly being emptied out. And I don't know where the material is going. But the footprint is steadily diminishing in a way that's really quite impressive.

ML: Right, okay, now, let’s hold those thoughts about what this, you know, this apocalyptic landscape, which can result and has resulted from this activity. Let's hold that out for a second, because we'll probably come back to it when we talk about how the world is perhaps going to be processing more of these materials in different countries. And in fact, you know, China itself may be funding some of that move to other countries. But let's talk. So let's come back to the question of the environmental challenges and risks and damage. But let's talk about the concentration of this industry in China, because we've sort of immediately said, yeah, there's some in California and Australia and Brazil. But this really is mainly about China, isn't it?

JK: Yeah. And that's, that's the outcome of about, you know, 35 years of policy priorities in the US in particular, that we're about offshoring and outsourcing heavy and dangerous industry, and transforming the US economy into a primarily service oriented and consumption oriented economy.

ML: Wait, wait, I gotta, I gotta jump in. Because you didn't say, well, that's because of the geology, it just so happens that China's got all the raw materials, and that's the way it works. You've immediately said, oh, no, that was a, that was a US policy. So you're not a Chinese policy is neither the geology nor a sort of land grab for strategic industries by China, you've said that it was actually the US pushing it to China? I mean, that's a big claim. Is that a factual claim? Or is that a kind of… I don't know, what's the opposite of a factual claim? Is that is that a claim special? Or is that a factual? You know? Are there documents that say, “yeah, let's do this.”

JK: Oh, yeah. Well, the historical record is clear. I mean, the rare earth industry in the West, and particularly in Mountain Pass, you know, it was running into trouble, in terms of, you know, they had issues with environmental compliance, and slowly and steadily as China was ramping up production in the 1980s, it was having a hard time competing with exports coming out of China. And so, but, you know, if, if we put on like our history of trade and development caps here, we can also remember that the 80s were a really transformative time, where on one hand, in the West, you had the removal of capital controls, which made it easier for industries to go elsewhere and kind of shop around and look for a better deal in terms of lower regulations and lower tax requirements and things like that. And at the same time, you had Deng Xiaoping reforms in China that were selectively opening up to allow in investments in strategic industries. And this was like, a match made in heaven, particularly for big companies or heavy industry. So, what I'm talking about is not at all unique to rare earth elements. We saw it with textiles, we saw with automobiles and things like that.

ML: So I guess the reason I called you on it is the question of intentionality. Because that's definitely what happened. And you know this industry moved over. And it's definitely you've explained the reasons why, which is the kind of this got more difficult than that opened up. But that doesn't prove the intentionality as he wasn't like somebody that, you know, the Department of Defense said, we were cool with this. And somebody else said, yeah, well, let's just, you know, this was, I suppose it would be the, you know, environment would say, we don't like this in the US and DoD said, yeah, that's fine. You can move it all to China. That didn't happen. Right?

JK: Hmm. Well, in the way that you've laid it out, no.

ML: It happened. Nevertheless, it happened. But, but the interesting question is, but it wasn't driven by geology?

ML: Absolutely not. No rare earth elements are abundant throughout Earth's crust, including in the in the west of the US, Canada.

JK: Is there a place like, like Bayan Obo, is that a place that could have you know, the West could have found in Australia or one of the wherever, and got the same resources and from a sort of physical geography perspective could have done the same?

JK: Oh, absolutely. Throughout the Western United States and Western Canada, there's a number of different places and actually, in different areas in montane Europe, but we're just talking about hard rock deposits. I mean, if we talk about say monocyte sands or clays, then then that brings a whole host of other areas into play. And one of the links that I'll share with you is a US Geological Survey map of potentially minable deposits on earth, and there are well over 800 of them.

ML: Right, so for those watching, whether it's watching on YouTube, or listening via your favorite podcast platform, there'll be links in the show notes. And there's lots of detail and we'll be sharing a number of links. So that's one that sounds great, 800 locations where you could do rare earths, but we haven't, because China did it cheaper. And you know, and partly did it cheaper by ignoring environmental constraints, by the sounds of things.

JK: That was a big part of it, right, the overwhelming priority, you know, through the 80s and 90s, you know, as a continuation of, you know, the early PRC’s policy was to achieve a high level of industrial development. And first, the goal was self-sufficiency. And then the goal became, you know, greater global economic prominence.

ML: And what is their global economic prominence? Again, you're doing my job for me the segues here. So what market share does China have in either sort of the 17, or their derivative products?

JK: Oh, yeah, that's an excellent question. Well, at the at the moment, when really, the rest of the world woke up to our dependence on China for rare earth elements. And this was a little over a decade ago. At that time, there was no production in the US and China was responsible for about 97%, of global production of rare earth elements. Now, this came as a shock, you know, to the rest of the world. And in the intervening years, there's been a number of efforts to open up new facilities and drum up investment in order to do the same in order to diversify global supply chains, such that now China is responsible for about 75 or 80%, of total global production of rare earth products. Now I say products instead of elements, because in 2018, for the first time since 1985, China became a net importer of rare earth materials, that meant that China was importing more of the minimally processed stuff than it was actually producing.

ML: That's fascinating. That's 2018 I did not realize that had happened.

JK: Yeah, quite recent.

ML: But now, when you say 10 years ago, the world woke up to this 97% dependence figure. I can tell an anecdote, but I can't tell all of it. Because it would be, I would feel very uncomfortable. So, I was running New Energy Finance. And I did get approached by some people who had suddenly become very scared about the dependence on rare earths from China. And they wanted to know what we knew at New Energy Finance, Bloomberg NEF as it already was then, about how it was kind of like, do you mind if we ask you how important are these things to wind turbines and, and it was some people that I say I feel very uncomfortable saying who they were, but they were people that I would, I thought really ought to know this stuff. So we, we provided information, well, our services, but there was this waking up, wasn't there. And Japan got quite a rude wake up, didn't it?

JK: Absolutely. Yeah. So, the story that you're referring to is this drama that unfolded in the latter half of 2010 in the context of a broader geopolitical dispute. So every once in a while, tensions flare between China and Japan over one thing or another. And in this case, in 2010, it was over who actually owns the Senkaku Islands, which are just kind of north of Taiwan. And one of the things that happened is, you know, Chinese fishermen got tanked and decided he was going to go claim these islands for China and he got within the 12 nautical miles buffer zone that the Japanese Coast Guard was patrolling, which by the way, the Japanese and the Chinese Coast Guard have an arrangement they take turns patrolling, just to make sure that nobody sets foot on these islands, right just while the matter is unsettled, nobody gets to be there. And instead of complying with the warnings to leave this area, he rammed his fishing boat into a Coast Guard vessel and was detained. And in China, when this hit the press, it was it was interpreted, you know, through the lens of historical injury for atrocities committed by Japanese forces in China during World War Two. It was seen as a unilateral act of escalation in this geopolitical struggle. And people were really mad. There were a lot of anti-Japanese demonstrations, particularly in eastern China. And people got frustrated that days were passing, weeks were passing, and this fishermen hadn't been repatriated. And people were wondering, you know, what the central government was up to, actually. And so, the official story or I shouldn't even say official story, the story that's the story that makes like the nice narrative that's run in the press that's repeated in media stories and things like this is that China embargoed rare earths to Japan during this time. An embargo I will say is an official act between one government against another during an active during a time of war. My research, to the contrary, it shows that a handful of local port officials and military officials were really frustrated with what they perceived as a lack of action on the part of the central government to repatriate their countryman. And they took matters into their own hands and just started withholding shipments of things bound for Japan. And these things happened to be rare earth elements that were bound for further processing and application in Japan's electronics industry. Now this lasted about as long as China's further downstream firms assembly electronics, I'm sorry, electronics assemblies, plants, and things like this had supplies on hand that they could also withstand the interruption of value-added rare-earth components from Japan back to China. Coincidentally, the shipments resumed right around the time when all the different assembly facilities, particularly in southeastern China, started to run out of the things that they needed from the Japanese firms. So that's a quite different story. It's a little bit less of a compelling story than the one that you know, that is sort of repeated ad infinitum in the news stories or things like this, but it is the story that my research and talking with people on the ground. It's a story that my research uncovered.

ML: Right. So from an embargo perspective, what you're saying is it was a big fat, nothingburger. But from a supply chain resilience perspective, it was not, right, because a unilateral action, you know, just to take your version of the narrative, the unilateral action by a few dockworkers actually sent these ripples, geopolitical ripples and also actual physical supply chain ripples through industries in a very unpredictable way.

JK: Yeah, I think it's, it's an interesting, it's a different sort of wake-up call that I think we're appreciating better now in the context of COVID with, you know, global supply chains being disrupted by a shortage of port workers and a shortage of dock workers, like really, like where does the power with global supply chain management actually lie? And it turns out ports and port workers are really key node. So my research puts the agency in the ports, not in Beijing.

ML: Okay, but that doesn't mean that there aren't sort of truly geopolitical issues here. And as you say, we've just had, you know, COVID, where even European countries have refused to serve, you know, to supply each other with, whether it's protective equipment early on, and then potentially vaccines later on. And we've also got the background of rising trade tensions between particularly the US and China over Huawei and other factors and a certain element of nativism around the clean energy transition. You know, we're all excited about the European Green Deal and then you've got a green deal in the US but you know, you listen to what the politicians actually say, and particularly in the Biden administration, it is good jobs, union jobs for Americans and it's not let's build lovely global supply chains. We don't know where it's made. We don't mind it is. There is a nativist, thread that drumbeat which is actually growing in importance. And so, you know, how does that affect the supply of these 17 critical non-rare rare earths?

JK: That's an excellent question. Well, I will say it's a, the nativist drumbeat is it really can, when it comes to renewable energy build outs and things like this, you can really only be nativist about it, if you have no idea how the global economy works, our global economy is more integrated than it has ever been at any point in recorded history. And so that means a couple of things when it comes to rare earths and other critical materials, right. So this includes things like copper and other sorts of things that are really important to the decarbonization and digitalization of our economy. You know, we might imagine, okay, if most of these things come from China, we might imagine a sort of one way flow of goods from China out to the rest of the world, when in fact, these global supply chains are less accurately represented as you know, this sort of one way flows as opposed to these complex networks where there's <inaudible> and elements move back and forth between countries and across borders, depending entirely on the geography of, of the different steps in the in the value added supply chain. So for example, the account I just gave of, you know, the disruption to the rare earth supply chain in 2010. One of the instrumental factors in you know, getting things running again, was the fact that it wasn't a one way street between China and Japan, Chinese firms were also dependent on the value added goods that then came out of Japan. And so much of our global supply chain looks like this, you have a lot of zigzagging and moving back and forth. And that, you know, from a broader carbon standpoint, is something that's maybe not super-efficient, and something that we could work on. And so, there is a good reasonable case to be made for repatriating and re-regionalizing our supply chain so that they are a little bit less carbon intensive, just from a transport standpoint. But otherwise, the other thing that we need to keep in mind is that look with climate change, and with, you know, new green deals and things like this, we really only make it if we all make it together. And so, it is in all of our best interests to figure out how to defuse the tensions and the irregularities around critical material and rare earth supply chains, while at the same time, building out as quickly as we can where we can. And so, I guess what I'm getting at here is that on one hand, you know, if a certain state in the US not even the entire US, but if a certain state in the US has the wherewithal and the economic poll to really rapidly build out renewable energy infrastructure, they should. Same with the country within the European Union. They absolutely should, because this is an all hands on deck situation. And that is where that tension around nativism really comes in. And I don't think it'll ever go away, right? Because we can't all proceed in lockstep together. That's just not the way the global industrial capacity is laid out. And that's not the that's not the way that, you know, the political will, I guess, is distributed.

ML: So you have, you know, in a sense, perfectly articulated my schizophrenia in a way because I work most of my time on the climate, clean energy, transportation transition, and I absolutely see the urgency of the importance and also that the way that we need to be doing this together, globally, that supply chains have to be global, we need money to flow, we need technology, we need talent, we need everything to flow to reduce the costs and to accelerate. But I am also a conservative, in fact, I'm a member of the UK Board of Trade. And another member that I had on this show a few weeks ago was Tony Abbott, former Prime Minister of Australia. And there is also not necessarily the nativism piece of it, but there is hard geopolitics that, you know, there are threats that countries China and others, you know, formerly perhaps more, you know, Western developed countries that throw their weight around that try to achieve geopolitical goals and that use the tools at their availability. So we've got on the one hand climate change says, oh, kumbaya, let's all do this together and you know, mesh all our supply chains and everything. But geopolitics actually says, hang on a second, that may not be the smartest idea.

JK: Oh, right, absolutely. So I also would like to add some schizophrenia in here. Pardon my colloquial use of the term. But what I really want to say is that…

ML: We should both, you know, this is not intended to be a comment on mental health, which I take very seriously. So, I use that word, but not hoping not to offend anybody. And I think you mean it in the same way.

JK: Precisely. Yeah, I, you know, I'm of two minds on this matter, as well. And I think, on the one hand, you know, we, we get further if we go together. But on the other hand, that's simply not the political reality that we're living in at the moment. I will say this, though, that, as someone who is really, very much in favor of throwing even the kitchen sink at this problem, and I have been for the past decade, you know, by that I mean, I'm very much in favor of rationalizing and streamlining our global supply chains, and also diversifying global production wherever we're able. So that does mean repatriating production in places like the US and Canada and Australia, and building out the value-added supply chains there so that you get the good union jobs, you know, that people are advocating for. Look, it's always been within our power to do this. And I have observed in the US context, dozens of legislative proposals attempting to do just this fail. Because a couple of different things, despite the occasional rhetoric that comes out, you know, in the defense sector, or the energy sector, or things like this, about how we're all so vulnerable, because of the current arrangement of global supply chains. That at the end of the day, what matters most is the lowest cost. And the status quo, despite the occasional concerns, and despite the occasional ripples, provides the lowest cost commodities as inputs into the energy sector into the scientific instrumentation sector and into the defense sector as well. And so, when when the same folks who are unwilling and who will actively block investments in building out a domestic value added supply chain, then on the other hand, go on to say that, look, we're all threatened by this. And there's a hard geopolitical reality here, it seems to me like we are simply talking about a mess that we have created that we refuse to fix. And I think that we could actually fix it quite easily. That's my two cents.

ML: Okay. I think that the pendulum is swinging towards more diversification of, you know, more risk management in supply chains. Whether that translates what you're saying is, yeah, well, I believe it when it when I see it translate into money, if people are actually paid to do something differently, they might do it differently. Otherwise, they'll just shrug and say, you know, well, the pandemic’s gone. And this 2010 scare on rare earths has gone and you know, we're just going to buy the cheapest stuff. But you've also said, now, let's go back to those environmental catastrophes or the catastrophic processing of the rare earths in China. And you said that central government now seems to be doing something about it, that tailings pond that you refer to that’s shrinking, how do we make sure that diversification, whether it's funded by the Belt and Road, or whether it's funded by the World Bank, or whether it's funded by some hedge funds and private equity investors? How do we make sure that it doesn't just go to the next cheapest place that we diversify, perhaps some of the supply chain risk, but actually we create the next generation of Superfund sites of the future, across Africa and across Southeast Asia and Latin America, and goodness knows or even in our own countries?

JK: Yeah, that's such a critical question. And look, I mean, the status quo is that exactly, as you say, these catastrophes just happened to be created elsewhere, with some exceptions. I mean, one of this is one of the reasons why we're seeing, you know, a significant source of or a significant source of new rare earth elements coming out of Myanmar. Right, because it is a kind of lowest common denominator type situation. On the other hand, if we could point to the example, in California, which is a really robust regulatory context, I mean, it's a regulatory context that industries love to complain about, right because the environmental rules are so strict, especially compared to you know, Nevada the state next door, right, which is really close by. When the regulatory infrastructure is in place, then the engineering and technological know-how to do things in a cleaner and more sustainable way is actually deployed. But without the proper combination of carrots and sticks of policy incentives and the threat of penalties, then there's no immediate incentive for, for companies, even companies that want to do the right thing to make these upfront investments in socially and environmentally superior mining and processing. Now, that's not because the know how doesn't exist, it does. And in fact, you know, there's various campaigns at the public and the private, or the public and private sector at the International and inter-governmental level, to produce global standards so that these can be readily incorporated by various national and sub-national governments in order to make rare earth production greener and greater. Right.

ML: And those initiatives, are there any that you could highlight that are specifically coming out of the finance sector, because that is one of the constituencies that follows Cleaning Up is the finance sector. In fact, when this airs, you will be one week after the Lord Mayor of London, who is essentially the cheerleader for the City of London. So are any of the ESG initiatives? There are 55 global ones, there are hundreds or even thousands at the different national, academic or NGO levels. Are any of those getting any traction on this question of sort of doing rare earths right?

JK: I'm gonna disappoint this segment of your of your listenership and say that I am much more, I'm much more focused in the policy and industry side as opposed to finance side. But I will say, you know, because these three all have to work together, or these four, if you include civil society, and the environmental side of things, that there are two very promising developments that I'd like to highlight. And so the first is spearheaded by a private industry association, the Rare Earth Industry Association, which is headquartered in Brussels, and has members from all over the world, especially also, including in China. And in the absence of government coordination, to increase transparency in the rare earth supply chain, they have developed a peer-to-peer transparency mechanism, so that they can at any point, verify the origin and environmental practices of those at those origins of rare earth elements. And so this is really helpful if say, for example, you know, Audi, or BMW is at the receiving end of a new policy or, or mandate that says, hey, you can't have any raw materials that are sourced from, say, Myanmar, well, then the company needs to be able to demonstrate that their supply chain is free from these elements. And the only way that they can do that is if there is that peer to peer network, through the supply chain, that can actually document the origins of these things. So that you know, they're using exciting tools like blockchain and things like this, in order to be able to generate that information. And then from an intergovernmental standpoint, there's think about 28 countries, you know, China, the US, Japan, South Korea included, that are currently engaged in standards development via the International Standards Organization, which is headquartered in Geneva, in order to improve traceability for rare earth elements, but also sustainability for the entire supply chain. Now the thing that when I say entire supply chain, the thing that I want to qualify or put a little asterisk there, is to say that, you know, we're talking about the entire supply chain from production to consumption. And what we haven't yet incorporated is waste and recycling, which I think honestly, is the greatest possible untapped source of rare earth elements above ground that we just haven't gotten serious about tapping into.

ML: So that is fascinating. I don't know how many in the audience listen to this for sort of investment opportunities, but certainly, for intellectually, certainly, if it's not end-to-end and it doesn't include recycling, and reuse, etc, then that's not a complete initiative. But it also does seem to me that that's going to be a huge opportunity, given how much effort goes into the extraction in the first place. And that would seem to be…and of course, what happens is that opportunity sometimes the recycling we already see this with lithium ion batteries. When it's little, teeny ones coming out of cell phones, it's hardly worth it. But when it's you know, when it's cars when it's that scale EVs and buses, all of that will be recycled, because it's just so much larger of an opportunity. I want to ask you, though, have you heard of anything around the area of trade? Because as a member of the UK Board of Trade, I get a lot of people lobbying and saying, well, you know, we should quite clearly not allow the import of this unless it meets some standard. Do we have the standards? Is there any drive to include this sort of thing yet in trade agreements? Or is that kind of a frontier that we haven't even started to think of let alone cross?

JK: Well, we've seen movement in…. I'm sorry, let me let me back up, I got tongue tied. But yeah, we've seen movement in relation to other elements. So coltan, and cobalt, for example, you know, which are labelled as conflict minerals, primarily because of their extraction or the conditions under which they're extracted in the Democratic Republic of the Congo, has been subject to all sorts of standards making, whether we're talking about in the US, Dodd-Frank, Section 1502, or the OECD standards, you know, in, in Europe. And I think one of the things that we're starting to see, although it's still premature at this point is an effort to broaden those standards beyond the narrow designation of conflict minerals, which is really just a small handful of things, to expand it to include critical materials, which is 30 plus, including rare earth elements, and just about everything that everything we need to, you know, power, our digital and renewable economy. And so, I would say that that's coming. But I don't have a crystal ball, and I can't say how long that's going to take.

ML: So, it feels to me like we're in a long term, sort of the direction of travel is, first of all, we've got to trace, then disclose, and then we can start to put rules around things. But without tracing and disclosure and some very, and the standards that you talked about the ISO working on, it would be theoretical, to try to <inaudible> in any kind of legal way, the use of these materials in from a trade law perspective, I think it'd be hard until we get to that point. But we're definitely headed in those sorts of directions. Absolutely. So I want to finish by talking about some of the new technologies or new approaches to extracting these materials, these rare earths because your book was from terrestrial subsoil to lunar landscape. So is there a get out of jail free here where we just say, let's go and trap a meteorite or go and mine on the moon or do something different, and then these poor people don't have to suffer as we, you know, as we develop, we can get we can do a net zero transition, without there being any kind of hard feelings or horrible pollution or human rights abuses anywhere in the world.

JK: I think there's a deep wish for there to be a get out of jail free card. And, you know, the, the rhetoric around extracting rare earth elements from the moon, or asteroids has really died down in recent years, because the economics just don't pencil out. I mean, we would need to see an order of magnitude increased in costs for these elements, and an order of magnitude decrease in the cost of transportation, to bring things back down to Earth. That said, it does make sense to continue developing mineral extraction techniques for an off-Earth environment in the context of supporting longer term and deep space travel, so that we can build the stuff that we need outside of Earth's gravity well, without actually having to take everything from the surface of the earth. You know, from a sustainability standpoint, that makes sense. But that's not at all really relevant to what we're talking about here today, which is a you know, how do we get the elements that we need in order to rapidly decarbonize and digitalize our global economy and do it in a way that doesn't exacerbate what we're already living through. Right, which is pretty scary, pretty scary moment in terms of climate change impacts. So where, whereas instead seen that sort of hope for get out of jail free card shifted, is away from, you know, mining the Moon, which was a very hot thing when I was writing the book a couple years ago, toward deep sea mining, particularly off the coast of small island state states. And it's the same sort of hopes and also justifications like nobody lives there. So you're not going to have to, there's no peasants or nomads who are going to be displaced and all of this, you know, and…

ML: Can I ask, which sort of states we're talking about here, the small island states I'm thinking of, when I hear that I hear I think of you know Tuvalu and maybe there's I don't know, the Seychelles, like that. What are we talking about?

JK: Those and also Nauru has been quite active. In fact, they announced a couple months ago that they plan to start deep sea mining in their waters within about two years. There's also a lot of excitement around the coast of Papua New Guinea. So, you know, these are small islands, Pacific states. And, you know, look, the debate right now is really focused around the question of whether that does constitute a lower environmental footprint. There's a lot of questions that we don't know the answer to with that. If you take a very sort of casual, sort of non-scientifically informed viewpoint, then it's very simple. No people live there. It's in the bottom of the ocean, you're pulling the stuff up, like literally vacuuming it up off the ocean floor, you're not having to blast mountains, it seems like a no brainer.

ML: What could possibly go wrong?

JK: Right, what could possibly go wrong? There is a lot of concern around disruption, disrupting fisheries and coastal livelihoods and things like this. But for me, the really compelling question is, from a greenhouse gas emission standpoint. Are we actually better off if we take the deep-sea approach? And here's why I'm asking that question. One of the most important potential sources of atmospheric methane emissions, methane, being a much more potent greenhouse gas than CO2, is the sort of steady percolation of methane up through the ocean floor. And one of the reasons that we haven't heard much about this and haven't had to freak out that much about it is because there's all these fabulous little microorganisms who eat the methane as it percolates up. And so, if we're potentially disturbing that environment and disturbing that ecosystem, we might be unleashing, effectively a methane bomb into the atmosphere. And, look, I mean, if it turns out in the net balance of things that it makes more sense for Nauru and Papua New Guinea to extract critical materials from the ocean floor, then to dig up new places or things like in order to get the sources that we need, then look like that's we have to do like, the least harmful thing, I think. But I don't think we should just be comparing terrestrial mining and deep-sea mining, without also taking into account the untapped potential of recycling and reclamation. So, I've just talked about, you know, recycling, we talked about recycling batteries, and different rare earth varying technological components and things like this. But way back at the beginning, you know, I mentioned all the other stuff that comes up, when you dig them, when you dig a hole in the ground, and you're looking for one particular thing. So rare earth elements are actually sitting above ground in the tailings ponds, or the discard piles, for all sorts of other mines, like lead mines, phosphate mines, silver mines, uranium mines, it's above ground, it's already there. And it's actually an ongoing problem. It's an ongoing management problem for the jurisdictions where these things are located. And so, we also have to take into account I think, what the potential impacts would be in our global supply chain, and also in terms of environmental and social and geopolitical impacts as well, if we just decided to revisit what we're thinking of is waste, and reprocess that in order to get the critical materials that we need. This, of course, requires public support, government support and smart investment to make it happen. And I think in order to do that, we have to overcome a critical hurdle which we have yet to overcome, which is we have to make waste sexy and exciting. I think in order to really turn the attention to these untapped resources that they deserve.

ML: Well, I was hoping you were going to sort of finish with a flourish, doing my job by saying, But first, we have to educate people about the fact that there's these resources and where they are and how they could be used. And then I can say, and that's a fantastic place. But you actually finished with a slightly different flourish by saying that we need to make waste sexy, but I think what we're talking about here is about the, these are all steps along the way to an ultimately circular economy. And I think I'm going to have to leave it there for time reasons. Although there are just so many different directions that we could have taken it from here. So hopefully what we'll do, we'll put a link to your 2017 book, which I don't know are you're working on a sequel, but if you do we'd love to have you back and talk to you more about any of those directions that you've opened up during this extraordinary 50 minute or whatever it is conversation.

JK: Yeah, my pleasure. Absolutely. And I didn't expect to end on a make waste sexy note, but why not? You know, I think it's a really interesting opportunity. And it gets us out of the out of this bind of, oh, gosh, you know, do we destroy ecosystems on earth or under the ocean? When in fact, we could be thinking, what ecosystems could we be restoring via this reprocessing of existing waste sites around the world?

ML: Absolutely fascinating. Thank you so, so much, Julie, for spending time with us this morning. And I very much hope that we can move from that meeting, only virtually to an in person meeting in the not too distant future.

JK: Likewise, thank you so much for having me. Take care.

ML: So that was Julie Klinger Assistant Professor of Geography at the University of Delaware and global expert on rare earths. My guest next week on Cleaning Up is Alain Ebobisse, he's the CEO of Africa 50, which is a pan-African infrastructure fund set up by the African Development Bank, backed by 28 African countries and two African central banks. Please join me at this time next week for a conversation with Alain Abobisee.