In case you’re feeling too calm and contented this holiday season, here’s another crisis to worry about: the threat of losing access to rare earth metals that are critical to everything from wind turbines and electric vehicles to Army tanks. They are used in powerful magnets, superconductors, lasers, chemical catalysts, LED phosphors and other applications.
As (bad) luck would have it, these elements exist in commercial quantities in only a few countries. Production is all but monopolized by China, which earlier this year slashed exports, driving prices up hundreds of percent and reminding the world of who’s boss.
“We are almost completely dependent on imports,” warned James Burnell of the Colorado Geological Survey, who noted that a single Prius uses 30 pounds of these hard-to-find elements. “Trade wars are developing with the rare earth elements.”
But now, rather than scaring you further, let’s look at some of the reasons to be jolly after all:
- China has resumed shipments of the materials to the United States, Europe and now Japan, after world leaders raised alarms over the export embargo.
- The U.S. Geological Survey reported this month for the first time that some 13 million metric tons of rare earth deposits exist in the United States. Ramping up domestic mining and processing of the metals could take years, but in principle it could be done. “At recent domestic consumption rates of about 10,000 metric tons annually, the US deposits have the potential to meet our needs for years to come,” said USGS Director Marcia McNutt.
- Soaring demand and high world prices have spurred at least one U.S. mining company, Molycorp, to accelerate plans to resume domestic production at Mountain Pass, California, home of one of the largest known U.S. deposits. The even better news is that company is reportedly developing state-of-the-art production methods that avoid the heavy environmental contamination found in traditional mining operations. Chinese researchers concede that their production has “led to heavy pollution of the atmosphere, water and land.”
- High prices and China’s record as an unreliable supplier are also spurring new production initiatives in Australia, Vietnam, Kazakhstan, and Mongolia, which should in time diversify supplies and put a lid on world prices. That’s the beauty of the law of supply and demand.
- At the same time, businesses (especially in Japan) have begun recycling programs now that it’s economic to recapture used rare earth elements. This initiative, too, will break China’s hold on the industry.
Finally, Congress is considering legislation to begin a national stockpiling program for rare earth metals to prevent hostile powers from damaging the U.S. economy by controlling access to supplies. For a few billion dollars, a stockpile could be cheap insurance for our national security.