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TGR: No.

JL: The Prius uses a nickel metal hydride battery based on the rare earth metal lanthanum. The world's production of lanthanum is almost 100% in the People's Republic of China. In America, we have at least two mines, that I'm aware of, that can produce lanthanum. Toyota's been stockpiling lanthanum for some time, it's been quietly investing; and last week it announced that it had bought a Japanese trading company that specialized in rare earth metals. Through that company, Toyota is now making an investment in a Vietnamese rare earth mine.

TGR: I read that.

JL: Toyota's research center for North America is right near me. So I see these guys in the drug store and meetings and ask why they are investing in Vietnam. They say the Vietnam government has assured them it wants this kind of mining to happen, and they need the material. They also said they're very, very concerned about the Chinese cutting off the world from rare earths, which they've said they're going to do. They're raising the export tax, they're reducing allocation, and there's a prediction that Chinese domestic demand for rare earths will equal Chinese production in 2013, which means no more export.

Toyota knows it needs a safe, reliable source of rare earth metal. Now why don't they come to the U.S., which in 1994 was the world's largest producer of rare earths? Because it feels the regulatory environment here and the political environment is so anti-mining that there's no point to it. In the U.S., we have a company called Molycorp, which was owned by Chevron until two months ago when it was sold to a group consisting of Resource Capital of Denver and Goldman Sachs, the financier, in New York.

In 1994, Molycorp's mine in Mountain Pass, California, was producing 100% of the United States' needs of rare earths and 34% of the world's. It was shut down in '94 because the Chinese came roaring into the market with low prices and put them out of business. Beyond that, there's only one other rare earth source in North America—a private company called Thorium Energy, which has deposits of rare earths and the metal thorium in Lemhi Pass, Idaho. Thorium is looking to finance it or sell it to a developer. That's it for North American rare earth sourcing.

Toyota has been so aggressive in sourcing the rare earth metals (lanthanum, in particular), no other car company in the world outside of Japan has an opportunity to go with the nickel metal hydride battery for use in a hybrid car. It's not about how much there is—it's about how much is produced. And the amount produced is now insufficient to satisfy the Chinese domestic market and Toyota alone. Japan's demand for rare earths this year in the summer was projected to be 40,000 tons of total rare earths; however, China has allocated only 38,000 tons for the entire world this year.

As for Ford, I thought it was committed to the lithium battery. I was very, very surprised to find that it's committed to the nickel metal hydride battery and that the lithium battery is something in the distant future. Now lithium is found as a primary material but it's found in the mineral spodumine, which is used primarily in the glass industry. It's very expensive to extract lithium from this mineral for use in batteries. Since 1994, brine mines have been the largest source of lithium for batteries. The largest group of brine mines in the world is in South America.

TGR: We've talked a lot about the car industry here, specifically in the battery arena.

JL: There's another rare earth metal that's critically important to our society—neodymium. In 1984, General Motors and Sumitomo developed the neodymium iron boron alloy for permanent magnets, which is the basis of all modern electric motors because it allows you to make a very small electric motor with the highest possible power density. Neodymium total world production is less than 20,000 tons. That may sound like a lot to you, but it's tiny. And the fact is it's recently been projected that a single wind turbine electric generator producing 1 megawatt of electricity requires one ton of neodymium.