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A China-imposed shortage of crucial raw materials could hamper the digital economy.
BERLIN, Germany — Chemist Wolfram Palitzsch’s father was a habitual recycler.
Growing up in communist East Germany, where anything might suddenly be in short supply, Palitzsch watched his dad fill bags with bottle tops and anything else that could be reused.
Three decades later, Palitzsch grew dismayed watching factory workers fill rubbish bags with rare earths elements — the raw material crucial to manufacturing hi-tech products such as mobile phones, TVs and hybrid cars. Germany faces a critical short supply of these metals.
“I couldn’t believe it. They had all this powder in big bags, sitting in the corner waiting to be thrown away,” he said. “I said, ‘That’s stupid. There’s 400 tonnes per year of powder there containing rare earths. Nobody’s looking at how it could be recycled.’”
The factory recycled compact fluorescent light bulbs, and the “waste” was the fluorescent powder used inside them. The European Union mandates use of these energy-saving bulbs in place of traditional incandescent lights.
Europe — Germany, in particular — is deeply worried about its future supply of rare earth metals such as Europium, Yttrium and Neodymium, all of which are essential for a hi-tech economy. As Palitzsch points out, “suddenly everyone is talking about rare earths.”
China, which produces more than 90 percent of the world’s supply of rare earths, last year began slashing export quotas, sending prices soaring.
Neither Germany nor any other hi-tech economy wants to be so beholden to China, so they are scrambling for alternatives.
“Hampering access to raw materials will severely affect the business activities of hi-tech economies like Germany,” said Dr. Susanne Lechner, an expert on rare earths at the German Chambers of Industry and Commerce (DIHK).
This week, the European Commission is set to release a paper, “Tackling the Challenges in Commodity Markets and on Raw Materials,” which will call for a greater effort to find alternatives, including recycling.
Led by Economy Minister Rainer Bruderle, Germany has been pressing China for assurances that it will not cut off supply of rare earths. German industry has discussed — with Bruderle’s support — forming a buyer’s cartel to improve its clout in the market.
It remains to be seen whether a buyer’s cartel would be any match for Beijing. In February a Chinese government agency, the Ministry of Land and Resources, invoked an obscure mining law to nationalize 11 rare earth mining districts in southern China, giving the government still more control.
Palitzsch, 44, is the manager of a Saxony-based company called Loser Chemie. Palitzsch and the firm’s owner, Ulrich Loser, have patented a method of recycling the valuable metals Indium, Gallium, Molybdenum and Tellurium from solar photovoltaic panels by dipping them into a special solution of chemicals and then extracting the elements from the residue.
None of these metals is actually classed as a rare earth metal. But Palitzsch is already looking forward to using similar techniques to recycle rare earths from the white powder used in fluorescent bulbs — the kind of “waste” he saw piling up in the factory he visited.
“Our business is taking waste and turning it into useful products. We look at recycling rare earths as the next step from recycling this thin film [photovoltaic] waste. Why should we put them in the bin? The idea is to use what we already know to launch the next step.”
The chemist readily admits that recycling won’t solve Germany’s rare earths challenge overnight. But he also points out that now is the time to start researching and investing.
The European Commission seems to agree: it is investing €17 million ($23 million) to improve alternative sources for rare earths, including recycling.