Japanese researchers recently announced that they had discovered an enormous quantity of rare earth metals on the seabed of the Pacific Ocean. The British journal, Nature Geoscience, writes that a team of Japanese scientists were able to locate large quantities of rare earth metals at 78 undersea locations in international waters east and west of Hawaii and east of Tahiti in French Polynesia. These deposits were found at depths of between 3,500 and 6,000 meters beneath the ocean’s surface. The Japanese team estimates the quantity of these rare earths at between 80 and 100 billion metric tons, significantly larger than the known deposits found on solid ground. The U.S. Geological Survey had previously estimated global rare earth reserves at just 100 million metric tons, found mainly in China, Russia, and the neighboring Caucuses, and the United States.

According to the Japanese team, the metals are readily obtainable simply by pumping the material up from the seafloor and using acid to extract the rare earths from the sea sludge. Despite such optimism from the Japanese, most industry analysts appear skeptical as to the feasibility and practicality of harvesting these metals at such extreme depths given the pressure and onset of corrosion that comes with operating in such environments. The demands and costs associated with working at such depths make it unlikely that these deposits will become economically viable anytime soon.

At the same time, there are mining companies that are pursuing various metals in the ocean floor. Canada’s Nautilus Minerals is exploring the viability of an underwater copper project off the coast of Papua New Guinea. Additionally, the diamond industry has been mining the seafloor off the Namibian coast for many years. The value of mining these minerals is unclear, particularly when one considers the large number of companies competing to develop and extract rare earth deposits on solid ground.

Due to the enormous costs associated with the undersea mining of rare earths, the market value of these metals must also be high in order to ensure the economic viability of such a venture. While prices for many rare earths have grown exponentially within the past 12 months, they are yet to match market prices for very rare materials such as gold.

Such ventures are therefore unlikely to materialize within the near future, particularly as new mines outside of China begin to come online within the next five to ten years. These new supplies from China are expected to stabilize prices and further dismiss the viability of costly undersea ventures.

Last week, Bloomberg reported that Siemens AG is launching a new effort aimed at reducing its dependence on Chinese rare earth metals. Like other major wind turbine manufacturers, Siemens is heavily dependent upon China for metals such as dysprosium and neodymium. These specific metals are critical composites in the permanent magnets found in Siemens expanding range of direct-drive wind turbines. According to the report, Siemens will instead look to finance and develop new production sites across Australia, Russia, Greenland, and California.

The application of permanent magnets in wind turbines is a relatively new but growing trend in the wind energy industry. Offering attractive advantages across areas such as efficiency, reliability, and design flexibility, these new generators are now being employed by Siemens and other leading manufacturers within the industry. As a result, direct-drive permanent magnet (DDPM) wind turbines are expected to account for an increasing number of total wind turbine deployments in the coming year.

The Bloomberg article compares Siemens’ approach to that of Vestas Wind Systems, which is said to be opposed to a move to direct-drive wind turbines largely because of its dependence on rare earths. Vestas claims that its geared generators contain a tenth of the quantity of rare earths found in direct-drive machines. Although effective, a significant downside of these systems is excess weight. Although the rotors for DDPM turbines must be significantly larger than those of geared generators when developing the same power, the overall weight of the DDPM unit is significantly less. At the same time, Siemens is also understood to be developing a new model that does not rely on rare earth metals.

Siemens’ new strategy is reflective of the wider fears surrounding the current state of the global rare earth metals market. In the face of China’s increasing influence over rare earth prices, clean technology manufacturers involved in industries such as wind turbines, electric vehicles, solid oxide fuel cells, and high-efficient lighting phosphors, are looking to diversify their rare earth supply lines while also pursuing technologies that serve to reduce their rare earth dependence. Potential high-growth industries such as wind turbines and electric vehicles that currently rely on significant quantities of a very select group of rare earth metals are understood as being at particular near-term risk because of the skyrocketing market prices. Other large manufacturers of rare earth-intensive clean technologies are expected to follow suit as market prices continue to rise.

Fuel cell manufacturers and OEMs continue to benefit from an increased military emphasis on energy security and logistical efficiency associated with the complex and challenging operational conditions being encountered in remote wartime environments such as Afghanistan. Reducing the strategic and tactical vulnerabilities associated with powering military equipment and remote installations has emerged as a leading priority for U.S. military leadership.

Fuel cells complement this mission in many ways offering significantly longer runtimes and significant savings in terms of weight and volume when compared to conventional military power sources such as the BA-5590 batteries and diesel generators. Fuel cell generators also offer tactical advantages by achieving significant reductions in the amount of noise, heat, and emissions associated with conventional diesel generators.

At the same time, logistical concerns regarding fuel availability for fuel cells represents one of the key challenges facing the fuel cell industry. The U.S. Department of Defense currently lacks an effective distribution system for conventional fuel cell fuels such as methanol and propane. Instead, the DOD has emphasized the need for achieving fuel compatibility with specialty military fuels where distribution networks already exist.

These specialty fuels are prominent across a wide spread of military applications. For example, JP‐8, a fuel that is similar to commercial diesel and aviation fuel, is considered the most prominent fuel on the battlefield powering everything from tactical generators and unmanned vehicles to the military’s mine resistant ambush protected (MRAP) vehicles, helicopters, and fighter aircraft.

The difficulties associated with engineering fuel cells that can run off these fuels are primarily associated with their high sulfur content. The sulfur content of these fuels is extremely high; up to around 3,000 ppmv S for jet fuels (JP-8, JP-5) and 10,000 ppmv S for naval distillate (NATO F-76). By comparison, commercial gasoline contains 30 ppmv S, while diesel power has around 15 ppmv.

The high sulfur content is poisonous to the reformer and electrode catalysts found in a fuel cell stack. Sulfur compounds in the liquid hydrocarbons must be subsequently reduced to less than 0.1 ppmw for polymer electrolyte membrane fuel cell (PEMFC) and at least less than 30 ppmw for the solid oxide fuel cell (SOFC).

According to Xialiang Ma, Altex Technologies Corporation, the development of new deep desulfurization processes for liquid hydrogen fuels has subsequently become one of the major challenges in developing the hydrocarbon processor for military fuel cell applications. As a result, the DOD has been supporting efforts to engineer hydrocarbon compatible fuel cell processors. For example:

• Adaptive Materials Inc., has been heavily involved in developing technologies that enable the use of JP-5 and JP-8 in fuel cells
• Ceramatec has also shown promising results with its GlidArc plasma reformer successfully reforming JP-8 at the 5kW-10kW scale
• In March 2011, Lockheed Martin and Technology Management Inc. (TMI) operated a fuel cell for 1,000 hours using JP-8

These developments suggest a positive outlook for the integration of fuel cells across a wide range of military power generation applications.

Rare earth metals with unique chemical and physical properties are an important part of the material composites crucial for prominent clean technology applications including electric vehicles, fuel cells, wind turbines, and energy efficient lighting.

China currently accounts for 97% of rare earth production. In July, Beijing introduced new export quotas aimed at consolidating its fractured mining industry. Rare earth prices have subsequently skyrocketed. As a consequence, many large-scale consumers of REMs are examining new ways to reduce their REM expenditure and diversify their supply sources away from China.

One way of achieving this is through greater investment in replacement technologies and metal compositions that reduce dependence on rare earth metals and oxides. Subsequently a number of companies are involved in the research and development of potential alternatives.

For example, in January 2011 Toyota announced that it was developing a new type of induction motor that does not use any rare earth metals. Working in collaboration with Tesla Motors of California, Toyota has contributed $60 million toward the development of the new motor. According to Toyota, these new motors can be lighter and more efficient than the PM motors now used in hybrid vehicles, like the Toyota Prius. Development is understood to be at an “advanced stage.” By 2012, Toyota plans to release its RAV4 EV concept sport-utility vehicle with the induction motor supplied by Tesla Motors.

Until recently, the majority of this activity has been seen in Japan where anxieties surrounding rare earths have been particularly high. However, last week the U.S. DOE announced that the Advanced Research Projects Agency-Energy (ARPA-E) will make $30 million available for early stage technology alternatives that greatly reduce or eliminate the need for scarce rare earths.

The two relevant areas up for funding are EV batteries and wind power generators. However, the fourth round of ARPA-E funding will provide an additional $100 million for innovative research in biofuels, thermal energy storage, solar power electronics, and grid controls.

This new American emphasis on developing rare earths alternatives is notable in that it represents the first real steps on the part of the U.S. government to shift the clean energy industry away from dependence on these increasingly costly resources. As prices continue to rise we expect to see further government engagement with respect to rare earth metals and the clean technology industry.