Rare earth metals: Weighing the costs of unobtainium

Posted: Oct 23, 2017

As this year comes to a close, anxiety continues to mount about how public and private interests in the US are going to get their hands on enough rare earth elements (REE) to maintain and grow the industries that rely on them. The race is on to strategize effectively for an anticipated shortfall. Can the U.S. tap into its own domestic supply in time? Can the mining be done cheaply and cleanly enough?

REEs are big name components with basic uses. They include the 15 elements with atomic numbers 57 through 71 (from lanthanum to lutetium) plus yttrium.

For the part they play in assembling clean-energy and communications technologies, as well defense devices, they’re essential to modern life. Making solar panels and storing electricity in batteries and cells requires gallium; electric-car batteries and wind turbines can’t be built without lithium, nor can compact fluorescent light bulbs (or cell phones speakers and laptop hard drives) be manufactured without neodymium. Yttrium gives flat-panel computer screens and cell phones their red color. They are also needed for the production of advance weapons systems.

Currently, the U.S. imports 100 percent of its REEs from other countries, with roughly 95 percent coming from China, according to the U.S. Geological Survey. For the past several years, the supply has been relatively cheap and steady. But last year, as China was spurred by its own increased domestic demand, that began to change. According to a recent congressional report, China has cut its exports of rare earth elements from about 50,000 metric tons in 2009 to 30,000 metric tons in 2010. According to a Bloomberg news report, a July 2010 announcement by China’s Ministry of Commerce would cut exports of REEs by 72 percent, to about 8,000 metric tons, for the second half of 2010.

The decline in supply, reminiscent of the Mideast Oil monopoly, has a lot of people concerned. As the Denver Post pointed out a couple of weeks ago, the growing green economy of the West relies on REEs. Wind-turbine maker Vestas, which employs 1,200 at three factories around Colorado, and electric-motor maker UQM Technologies in Longmont are among the firms that import rare earths from China. Another player is the Alamosa Photovoltaic Solar Plant, which opened in the San Luis Valley in 2007, and is the second largest photovoltaic facility in the nation.

Demand for REEs is expected to exceed supply as early as 2012. According to that same congressional report, world demand for the so-called “miracle metals” is projected to rise to 180,000 tons annually by 2012 (its currently at 140,000 tons), while it is unlikely that new mine output will close the gap in the short term. New mining projects could easily take 10 years to reach production.
 
Which is why a Western mine, which used to supply rare earths before they were priced out of the market several years ago, may be the best hope for curtailing a REE freefall. As it turns out, according to the USGS, this country has the world’s second singularly largest collection of rare earth deposits. The Mountain Pass Mine, bordering the Mojave National Preserve in California, is the only well-developed rare earth mine outside of China with dense enough concentrations of REEs to address skyrocketing demand. Molycorp, the Denver-based owner of the mine, closed it in 2002 but is angling to re-open in 2012 if they get the money they need. They’ve already been promised $280 million in loan guarantees from the Department of Energy and $380 in other investment cash.

They may also get some help from Congress. The House of Representatives already passed one piece of legislation related to REEs, in September, called the “Rare Earths and Critical Materials Revitalization Act of 2010.” The bill would charge the DOE with establishing an R&D program to improve the extraction, processing and recovery of REEs, as well as looking into potential material substitutes. Two other pieces of legislation are under consideration by the House.

One Senate bill that has been proposed raises questions about whether the country is nervous enough about a lapsing REE supply to cut environmental corners. The Rare Earths Supply Technology and Resources Transformation Act of 2010 would “expedite permitting to increase domestic exploration and development of REEs.” The U.S. regulatory process is seen by some who desperately need REEs as cumbersome and costly. Colorado Mining Association Stuart Sanderson has said he will push the cause of speedier approvals. But if China's crude and filthy technique (of pouring toxic acid over the ore) for extracting rare earth metals is any indication, REE mining in the U.S. needs to be done better.

While it’s clear the need to secure a reliable supply of REEs to safeguard fiscal and defense interests, the Senate bill looks a lot like a rubber stamp hovering over REE mining permits. However important, these needs cannot come at the expense of environmental safety. The government, and Molycorp, need to proceed with caution.

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