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STACEY VANEK SMITH: If you’ve been on your smart phone lately, trying to rebook plane tickets — you’ve been using rare earth metals. Those are obscure materials used in high tech devices. China controls 97 percent of global supplies. And they’re cutting exports way back. So Estonia is stepping in to pick up the slack, as Christopher Werth reports.
CHRISTOPHER WERTH: “Rare” earths are not so rare. There are other sources of them outside China like Australia and the U.S. But Stuart Burns, who tracks metals markets for the Web site Metal Miner, says it’s not just about mining raw rare earths, it’s also what you do once you’ve got them out of the ground.
STUART BURNS: It’s refining it into oxides and metals that can be used.
And with China cutting exports, the lack of refining facilities in other parts of the world is causing much concern.
And it’s why this factory for refining rare earths in North East Estonia — one of the few remaining outside China – could have a bright future, not just a long history.
DAVID O’BROCK: It’s been working like this for almost 40 years.
David O’Brock is the CEO of Silmet, the company that owns and operates the plant, and he’s showing me around.
O’BROCK: Please watch your head.
This facility was originally built under Stalin to enrich uranium at the start of the Cold War.Today, workers are instead busy churning out around 2 to 3 percent of the world’s supply of processed rare earths – about 3,000 tons a year – although O’Brock would like to produce more.
O’BROCK: Demand for our products has increased a lot.
He says the company actually made money on its rare earths last year after a tough decade. About ten years ago, China began flooding the market with its own cheap rare earth supplies. As prices dropped, other refineries folded.
O’BROCK: It was completely the best way to lose money at that time.
Now, China has turned off the spigot and rare earths prices have jumped. Here at Silmet, the price fetched for the rare earth neodymium – used in products like cell phones – has gone from $15 dollars a kilogram to around $85 dollars over the past year. O’Brock says there’s just one problem.
O’BROCK: Our bottleneck has always been the raw material — not being able to get enough as what our market needs — and it continues to be today.
But with prices rising, O’Brock says he’s hopeful new mines currently getting underway in the U.S. and elsewhere will soon step in to meet the booming demand.
In Estonia, I’m Christopher Werth for Marketplace.
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