GE Lighting
Price Increase Announcement
June 1, 2011
What are Rare Earths (REs)?
17 elements from
near the bottom of
the periodic table
• Unique properties have led to a wide variety of applications and are
important economically, environmentally and technologically
• Use of REs in high performance products has significantly increased
over last 2 decades
• Industry applications: Lighting, EV batteries, military weapons, TV &
laptop screens, catalytic converters, magnets, semiconductors
• Toyota Prius uses 1kg/2.2lbs of Neodymium in each vehicle
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Avg. Rare Earth content - phosphors
Red
Green
Blue
White
60%
30%
10%
(R60%G30%B10%)
2% Eu
3% Eu
5% EU
20% Ce
57% Y
95% Y
+
38% La
+
98% Other
=
6% Ce
12% Tb
11.4% La
3.6% Tb
30% Other
19%
others
RE%
100%
70%
2%
REs comprise 65% of lamp
100%
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Why do RE prices continue to rise?
1. Increased demand for rare earths
in widely used products
3. China continues to reduce rare
earth export quotas
2. China undercut world prices in
the 1990s and now produces 95%
of the world’s RE supply
4. Export duties (VAT) imposed to
encourage “domestic” production of
finished goods in China
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Rare Earth costs
Neodymium, used in Reveal glass,
has increased in cost 11x since
2009!
Jan. 2009
85k RMB/MT
RE prices are rapidly inflating costs of
phosphors used in LFL & CFL
products
Today
930k
RMB/MT
($/Kg in China; 99% purity)
Source: metals-pages.com
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Global challenge impacting everyone
Rare Earth Prices Spike, Relief May be
Years Away
Published May 05, 2011
China Tightens Rare Earth Rules
Global demand for rare earth minerals has skyrocketed in recent years, driven in
no small part by the popularity of hybrid cars like the Toyota Prius.May 19, 2011
At the same time, China -- which is home to the vast majority of the world's rare
earth mining operations -- has been tightening its hold on the elements, resulting
in a classic supply-and-demand price spike. Since 2009, prices for rare earth
minerals have climbed to dizzying heights.
China Releases Rare Earth Quota &
Eliminates New Mining Licenses
Monday, April 4, 2011
China has released the total mining output quota for 2011. The
country has increased the level of the total by a modest 5 per cent
over 2010. Along with the announcement officials stated that new
permits for prospecting and mining will not be granted until June,
2012, which further exacerbates supply issues going forward
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RE-Like inflation on everyday items
What would prices be if you experienced Neodymium inflation rates on
some common everyday items?
Jan
‘09
Mar
‘11
Jan
‘09
Mar
‘11
Jan
‘09
Jan
‘09
What would you do differently?
Mar
‘11
Mar
‘11
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Other inflation
Incandescent Aline:
• Increased costs to meet customer demand: keep factory open,
add’l shifts (wages), other base costs
• Market decline driving component cost increases
LFL/Halogen:
• Higher LFL phosphor content required for higher CRI product to
comply with July 2012 legislation
• Halogen transitioning to Silver Par & HIR+ to meet legislation
effective July 2012
Transportation:
• Ocean freight
• Oil inflation
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GE response
Sourcing to protect supply & minimize cost:
• Stockpile RE material
• Maximizing “blends” procurement & number of suppliers
• Securing long term agreements w/non-Chinese mines
Technology to reduce usage:
• Product design projects to reduce RE content
• Longer term R&D innovations
Government Relations:
• NEMA involvement in DOE legislation extension
• Support 3 bills currently in U.S. Congress; 4th introduced May 27th
Pricing to ensure supply:
• 5% general price increase – amount varies by product line
• Announced 6/1/11, effective 8/1/11
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