Mining Policy Designed to Benefit Our Own-Mighty Rare

Mining Policy Designed to Benefit Our Own-Mighty Rare

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In a time of partisan hostility, rare cooperation from both sides of the aisle and both houses is noteworthy. When the cooperation is over something essential to modern energy—including oil-and-gas development, wind and solar, and LED lights—it gets my attention.

I am talking about Rare Earth Elements (REEs), many of which are classified by the Department of Defense as Critical Minerals. There are 17 different REEs with names ending in “ium” such as: dysprosium, yttrium, neodymium, terbium, cerium, and europium—just to name a few.

While most people don’t give REEs a thought, we all use them in our modern lives as they are an essential part of what makes cell phones, flat screens, and computer chips work. They are in every modern vehicle from a Prius to a Ford F-150.

But, perhaps, most importantly, REEs are playing an ever-increasing role in vital defense technologies. REEs are used in stealth radar-evading technology, in targeting mechanisms for missiles and temperature-resistant magnets, and materials used in jet engines and aerofoil components in manned aircraft and unmanned drones. The U.S. Department of Defense recently released findings from the “Strategic and Critical Materials 2013 Report on Stockpile Requirements,” which identified 23 critical minerals, of which shortages are likely. Such shortages will limit our ability to produce the defense systems of the future.

The U.S. is one of only a few countries with known recoverable REE deposits (with approximately 13 percent of the world’s total known reserves). Yet, China currently has a near-monopoly on the production of REEs—generally supplying approximately 85 percent of the world’s current REE supply and 100 percent of several REEs. Additionally, in recent years, China has imposed quotas on exports to protect its need for REEs and to compel high-tech companies to establish production in China by giving them the benefit of lower prices and guaranteed supply.

Instead of easing the mining regulatory framework to help promote domestic REE production, the Obama administration has engaged in the governmental form of a temper tantrum. It joined countries without the quality resources found in the U.S. and lodged a complaint with the World Trade Organization (WTO), claiming that Beijing is unfairly choking off exports of the commodities to benefit its domestic industries. In fact, if the WTO initiative is successful and China is forced to reverse its current policy of keeping the majority of its REEs in-country for its own use, we might end up encouraging them to flood global markets with REEs again, driving the price down. By joining in the WTO case, the Administration could make it very difficult for U.S. projects to get up and running and stay competitive—and this could be their plan.

REEs in China were first discovered in 1927. The U.S. dominated global production from the 60s into the 80s with light and heavy REE production at Mountain Pass, but China then launched a dedicated campaign to dominate the REE supply chain. In 1992, Deng Xiaoping, a Chinese politician and reformist leader of the Communist Party who, after Mao’s death, led his country towards a market economy, boldly proclaimed: the “Middle East has oil, China has rare earths.”

This brings us to today.

REEs have gone “from being practically unheard of a few years ago to being one of the most-talked-about commodities,” according to the WSJ. There has been growing concern in the U.S. regarding our reliance on China for our REE needs, which has resulted in unusual bipartisan support for increased domestic REE production.

Regarding the U.S. position in the international REE arena, Eric Hannis, senior fellow in defense studies at the American Foreign Policy Council in Washington, DC, states: “In much the same way that we should strive for independence from Middle Eastern oil, the United States now needs to make ‘rare earth independence’ from China a key priority of government. After all, the nation that supplies our rare earths shares one key similarity to the region that supplies much of our oil: neither are getting friendlier to America.”

Apparently Congress has gotten the message. Last year, Rep. Doc Hastings, (R-WA), Chairman of the House Natural Resources Committee, said: “Just like the United States’ dependence on foreign oil causes pain at the pump, Americans will soon feel the impact of China’s monopoly on the rare-earth element market.”

In September, the House of Representatives passed, with bipartisan support, HR 761: the National Strategic and Critical Minerals Production Act of 2013, with the goal of allowing for the more efficient development of the U.S.’s $6.2 trillion worth of minerals and metals without minimizing or hindering the environmental review process.

On October 29, 17 Senators (nine Republicans and eight Democrats) introduced similar legislation: The Critical Minerals Policy Act of 2013 to “help reduce the nation’s dependence on foreign suppliers.” According to the Background and Section-by-Section Summary: “The legislation directs the Secretary of Interior to establish a list of minerals critical to the U.S. economy and, pursuant to those designations, outlines a comprehensive set of policies that will bolster critical mineral production, expand manufacturing, and promote recycling and alternatives—all while maintaining strong environmental protections.”

The House bill passed with the support of 100 percent of the Republicans and many Democrats. The same can be assumed for the Senate version. Senate Democrats need to hear from their constituents, they need to know that you support The Critical Minerals Policy Act of 2013. Please call your Senator and ask for his or her support.

Right now, there are only two non-Chinese suppliers for REEs (Molycorp in California and Lynas Corp. in Australia)—but there are several projects, such as Rare Elements Resources’ “Bear Lodge,” in development in the U.S. that could be providing national and economic security within a few years of the passage of The Critical Minerals Policy Act of 2013. America’s REE resources and potential production and refining give us a strong global advantage—but we must accelerate and streamline the permitting process. It is time for our government to make policy that is designed to benefit America.

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