Filled with radioactive waste, its buildings gutted and crumbling after 48 years of disuse, the abandoned Steenkampskraal mine would seem to hold little value to anyone.
Until recently, the decaying apartheid-era mine in a remote patch of South African desert was mainly of interest to scientists studying the effects of high radiation on the thousands of bats that hibernate in the empty mine shaft.
But soon the bats will be evicted, the radioactive waste will be buried and the shaft refurbished. The Canadian owners of this mine are scrambling to tap the mine’s rare-earth minerals – possibly the hottest commodity on the planet these days, with immense strategic and technological significance, and pivotal to a global geopolitical rivalry.
As prices soar, there is a frantic global rush to develop new sources of rare earths. These obscure minerals – 17 different elements with futuristic names such as neodymium, samarium, yttrium and lanthanum – are crucial for everything from guided missiles and hybrid cars to flat-screen televisions, iPods and BlackBerry phones.
Western leaders are increasingly anxious about China’s chokehold on a 97 per cent share of the supply, controlling the market with its abundant, low-cost production. The country dominates with just 37 per cent of the world’s proven reserves. It produced 118,900 tonnes of rare earths in 2010, and exported just over 30,000 tonnes. Leaders have watched nervously as China restricts its exports, resulting in price rises of up to tenfold for some rare earths over the past year.
China updated its rare earth quotas this week, which put them on par for 2011 with last year’s numbers. The U.S. and the European Union later complained that Beijing had, in fact, added products to the list, and are calling for a new, fairer export restrictions policy.
The new quotas came after the World Trade Organization recently ruled against China for limiting exports of nine raw materials such as coke, zinc and bauxite. The case is expected to empower the U.S. and the European Union to file another complaint against China over its quotas on the export of rare-earth materials. Beijing maintains its rare-earth quotas fall within trade regulations.
China has openly used its monopoly as a political weapon, dramatically raising the stakes in the rare-earth business by cutting off supplies to Japan during a territorial dispute last year.
This, in turn, has triggered the interest of U.S. politicians, who allege that Chinese “hoarding” is a threat to the Pentagon’s missiles and California’s high-tech sector. Even Sarah Palin, the populist Republican, has complained that China is “bending us over a barrel” by controlling the rare-earth industry and forcing the United States to become dependent on Chinese production.
Never has an industry enjoyed so much influence from so little production. The global rare-earth industry is worth only $1.5-billion, yet the industries relying on it are worth an estimated $4.8-trillion. And they are vital to some of the world’s fastest-growing products: smart phones, electric cars, high-tech weaponry, wind turbines, and almost anything with miniature electronics.
Working ‘25/8’ in South Africa
The mine at Steenkampskraal contains some of the world’s richest grades of rare earths. But the ore also contains thorium, which is highly radioactive, creating problems of storage and disposal. This small tract of desert is one of the most radioactive sites in the world, according to a consultant at the mine.
The mine site is riddled with radioactive waste from its production years of 1952 to 1963. Even the crumbling buildings, segregated under apartheid rules into detached houses for white employees and hostel dormitories for black workers, still contain radioactive material. And none of it was cleaned up when the mine shut down.
Great Western Minerals Group Ltd. of Saskatoon, a small company with a market valuation of less than $300-million and a stock price below $1, is hoping to reopen the long-abandoned mine as swiftly as possible, as it races against a group of other upstart rare-earth companies to bring new production to market. It’s a daunting task fraught with risk, especially given that rare earths are difficult to mine due to their low concentrations. That, along with the need to remove radioactive elements, can inflate costs to the point of being uneconomic.Report Typo/Error
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