Rare Earth Briefing Paper by General Electric Lighting.

1. GE
Lighting
RARE EARTH
BRIEFING PAPER

2. GE
Lighting
What is the issue?
A shortage of the materials known as ‘Rare Earths’ (RE) on global markets is driving up
prices of a whole range of goods, from TV and laptop screens to disc drives and
catalytic converters.
Rare Earths are also an essential component of fluorescent lighting products, and the
meteoric increase in RE prices has led to a significant rise in manufacturing costs. For
an idea of the scale of these rises, if rare earths were coffee, a latte-to-go that cost
€1.50 just a few months ago would now cost almost €16! The situation remains
volatile and further price increases seem highly likely.
This briefing paper provides a high level overview of the impact that rare earth
shortages are having – and will continue to have – on GE Lighting and our products.

3. GE
Lighting
What are Rare Earths?
Rare Earths are a group of 17 elements with unique properties that make them
virtually indispensible in the production of a wide range of modern goods.
Neodymium, for instance, is highly magnetic and used in cell phones, loudspeakers,
hard drives and catalytic converters. Others are used in camera lenses, electric
vehicles, rechargeable batteries, petroleum refining, defense technology and lighting.
Despite the name, many of these elements are not all that rare; the problem is that
they are not found in concentrations sufficient to make extraction commercially viable.
What Rare Earths are used in lighting
products?
More than half of the phosphor used in linear fluorescent (LFL) and compact
fluorescent (CFL) products is derived from rare earths, and as many as five different
rare earths are required to create the white light.

4. GE
Lighting
Why have prices risen?
Two factors have driven the rise in prices. Firstly, there has been a huge growth in
consumption driven by mushrooming demand for consumer/electronic goods, and in
rare earth-hungry applications such as hybrid/electric vehicles and wind turbines.
And secondly, the world’s major producer, China – currently responsible for around
97% of global output – has been limiting production and imposing quotas on its
exports every year.
China’s limits on the export of Rare Earths tends to promote production of materials
elsewhere in the world.

5. GE
Lighting
What impact has the shortage of Rare
Earths had?
The Rare Earths shortage has had a dramatic impact on world prices.
According to the Financial Times, prices rose by a factor of between three and five
between January and May 2011.
Over the last 12 months, the prices of some Rare Earths – including Terbium and
Europium, both used in fluorescent lamp phosphors – have increased by around one
thousand per cent, others by even more.
In June, it was reported that the price of some rare earths had doubled within just two
weeks.
This has lead to stockpiling by some dealers, driving up prices further still.
What’s the current situation?
Demand for some rare earths will undoubtedly outpace supply for some time to come
but many actions are underway to help manage the situation. The United States, the
European Union and other governments are working with China to ensure balanced
and fair trade policies.

6. GE
Lighting
Could this ‘lost’ production be replaced?
In the short term no; in the medium to long term yes.
Work is underway to open – or in some cases reopen – mines in the USA, Canada,
Australia and Vietnam; and advances in recycling technologies could release many
thousands of tons of materials currently ‘stored’ in old electronics and other products.
In July 2011, Japanese researchers announced the discovery of what appears to be
vast deposits of Rare Earths in the mud of the Pacific Ocean. However it would be
some years before these would reach world markets.
For the foreseeable future though, the current situation will have a serious and
detrimental impact on the availability – and cost – of Rare Earth materials.
How does this specifically affect
GE Lighting?
As a company for whom Rare Earths are an essential component of production,
scarcity and rising prices will clearly have an impact, one that has been intensified in
the EU27 countries due to energy efficient legislation driving increased use of rare-
earth phosphor containing lamps.
However, it should be remembered that this isn’t just a challenge for GE Lighting; it’s a
global issue, one that’s having an impact on manufacturers and users of all kinds of
goods.

7. GE
Lighting
What does the future hold?
No one can be sure what’s going to happen next. As already mentioned, the situation
remains volatile and prices are likely to fluctuate over the coming months and even
years. We have therefore taken a number of actions:
We have established teams across the company to help manage this unprecedented
supply chain situation.
We are actively working to develop and procure lower Rare Earth content phosphor.
We are working to qualify an expanded base of suppliers.
We continue to work to secure the ample supply of materials.
We will do our best to manage these costs where we can, but rises on a similar scale
to those seen in recent months will mean further significant price adjustments may be
unavoidable.