Rare earth producers aim to agree global environment standards in 2021

LONDON (Reuters) - Producers of rare earths, under increasing pressure from their industrial buyers over longstanding pollution issues, are hammering out a single set of global environmental standards, the head of the industry association has told Reuters.

FILE PHOTO: Miners are seen at the Bayan Obo mine containing rare earth minerals, in Inner Mongolia, China July 16, 2011. Picture taken July 16, 2011.REUTERS/Stringer

Manufacturers of products such as electronic goods and electric vehicles (EVs) are themselves under pressure from consumers to push their suppliers to impose sustainability standards - and some, such as German carmaker BMW, are trying to do without them altogether.

As there is no unified framework for rare earths, producers must currently navigate multiple standards and requirements, said Badrinath Veluri, president of the global Rare Earth Industry Association (REIA).

“The product manufacturers who are close to the customers demand sustainability, but every region is different, so this becomes very confusing and difficult to benchmark,” he said.

Rare earths are a set of 17 related heavy metals, generally found widely dispersed rather than in concentrated deposits, and used in products ranging from wind turbines to electric vehicles and in industrial processes.

Refining rare earth ore into individual elements is a complex operation, involving solvents and toxic waste that needs to be disposed of carefully.

China, which dominates global production, said last year it had shut down more than 1,300 heavy metal enterprises since 2016 to curb widespread chronic soil pollution.


Output of rare earths is set to spread geographically in coming years as the United States and Europe seek to wean themselves off dependence on China.

“To create a level playing field, the downstream players play a vital role. If there is a single standard and unified methodology, then upstream players will accept this much more easily,” Veluri said.

The global association, founded last year, is building a global sustainability framework to be rolled out next year and plans to use an integrated blockchain tool to boost transparency, said Veluri, who works as a magnetic materials specialist at water pump maker Grundfos in Denmark.

REIA has been in discussion with companies all along the “value chain” from miners to makers of consumer goods. These include the auto industry, now shifting increasingly toward electric vehicles, whose motors usually require rare earth-based magnets.

BMW, however, said concerns about sustainability as well as availability and price volatility had prompted it to eliminate rare earths from its fifth-generation “eDrive” technology, to be deployed in its iX3 all-electric model next year.

“Our goal for the future is to avoid rare earths wherever possible,” it said in an emailed reply to a query.

The REIA plans to use standards drawn up by the Organisation for Economic Cooperation and Development (OECD) and the International Organisation for Standardisation (ISO) as a foundation for its sustainability framework.

Reporting by Eric Onstad; Editing by Kevin Liffey