Less Common Metals: FAQs

Less Common Metals: FAQs

We understand you may have some questions about rare earth elements, the situation for rare earth in other countries and what LCM is doing differently.

What is the situation in China for rare earth elements (REE)?

Chinese policies regarding the export of REE have been modified several times throughout the years. It is worthwhile noting, though, that there has never been a problem with the availability of raw materials for LCM, provided we are willing to pay the asking price!

In keeping with other commodity products, market prices for rare earth vary over time. Occasionally there have been periods of significant turbulence as global events, and perceived risk of shortages, have affected the overall supply/demand balance. As already mentioned, such events have never resulted in the non-availability of material.

A key and ongoing, factor for rare earth pricing is the differential between Chinese domestic and export prices. This was most extreme between 2010 and 2015 when Chinese government policies purposely increased the price for exported materials. A direct export tax, coupled with a stringent quota policy limiting the number of REEs that could be exported each year, combined to significantly increase prices for non-Chinese consumers of REEs.

These policies ceased in 2015 following rulings from the World Trade Organisation. However, price differentials remain for rare earth elements consumed within China and those exported for processing elsewhere. VAT refunds and local enterprise zone rebates on raw material purchases in China both help to ensure a lower effective domestic price for REEs.

What is happening outside China to establish stable and secure alternative feeds of rare earth raw materials?

At LCM we make it our business to track all non-Chinese rare earth ventures for specific projects to provide advice and support. Overall, our aim is to ensure we are ideally placed to take advantage of all new opportunities as they arise.

For light rare earth oxides, there are now well-established non-Chinese producers and LCM has been sourcing material from these since 2017. We manufacture our own neodymium and didymium (mixed neodymium/praseodymium) on-site and all raw materials for this activity come from non-Chinese sources.

As national Governments and associated bodies become more focussed on the strategic vulnerability of current supply chains, LCM again plays an active role in terms of participation on committees, presentations and discussions with policymakers and providing advice to help shape strategy.

What does LCM do to ensure its raw material supplies are ethical?

Current issues surrounding ethical sourcing relate mainly to conflict minerals or the use of child labour for artisanal mining of cobalt ore in the Democratic Republic of Congo (DRC).

Conflict mineral legislation focuses on four elements; tungsten, tantalum, tin and gold (the so-called 3TG materials). The only one of these used at LCM is tin and, for all supplies, we require a statement, to the official OECD format, that material is free of any association with conflict minerals.

Although cobalt is not classified as a conflict material, LCM has always been aware of the risks associated with sourcing cobalt from unverified sources, in particular within the DRC, and has been proactive in addressing these. We recognise that long-term improvements to the DRC situation would best be achieved by establishing a comprehensive, legitimate and fully transparent industry, thus side-lining the unethical activities and bringing economic benefit to all citizens in the country.

LCM is a member of the Cobalt Institute and, through this, is currently implementing the Cobalt Institute Responsible Assessment Framework (CIRAF), which meets the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. This requires us to regularly audit our supply chain risks and implement a due diligence management system to ensure all our cobalt supply is fully ethical. Our assessment of risk indicates that our supply of cobalt is not sourced from a Conflict-Affected and High-Risk Area. We also have a Responsible Sourcing Policy and a Human Rights Policy in place to support our risk management in this area.

What measures do you take to ensure your business operates as sustainably as possible?

As a manufacturer of metal alloys, we are aware of the potential environmental impact that our operations can have. For this reason, we operate within an environmental management system that is externally accredited by BSi to the international standard, ISO14001. This has been in place since 2014 and requires us to regularly assess our environmental risks, set annual environmental improvement targets and audit our performance. Previous projects have seen us reduce energy consumption by fitting low-energy LED lighting in the factory. Currently, we are installing an effluent treatment plant that will reduce metal contaminants in our effluent to less than 5 ppm.

Since waste is a significant cost to any business there are financial as well as environmental drivers for reducing and reusing our waste as far as possible. We reuse process waste as far as possible and have recycling facilities in place for cardboard, metal, paper and plastic and this has helped us achieve a 50% reduction in landfilled waste since 2015. We also harvest our rainwater on site to reuse in one of our production processes.

We aim for complete transparency in reporting to our customer’s environmental information regarding our products. Consequently, we undertake due diligence on our raw material supply chain to provide assurance that our products and packaging meet international standards such as those relating to human rights, sourcing minerals from ‘conflict areas’ and legislation relating to restrictions on hazardous substances.

A key factor in operating sustainably, and managing risk, is the engagement and awareness of staff. As a relatively small business, we have good communication mechanisms in place to facilitate this. We are very committed to training, and all staff, regardless of role, are IOSH trained. This is supplemented with in-house training which covers areas such as waste handling, spill response and general environmental awareness.

If you have any other questions drop us an email at general@lesscommonmetals.com and we’d be happy to answer them for you.