By Sreekumar Raghavan
Rare earths are indeed getting rare. I got wind of it only a few months back when doing a story on Canada Resource Group and their Blue River Project in British Columbia. It's President David Hodge in an interview said that tantalum that is used in cellphone, laptops, digital camerals and several modern industries is in short supply with Western supply totally eliminated.
China who controls more than 97% of the rare earths supply has threatened to curtail supplies as it wants them for domestic consumption. Much of the rare earth metals available in the market are mined in unethical and inhumane ways in African continent. For example, majority of the tantalum come from Democratic Republic of Congo where profits from such mining is diverted to fund ongoing wars and civil strife.
Naturally the United States of America is worried as shortage of the rare earths is a threat to their economic and national security. Colorado Congressman Mike Coffman has introduced a legislation to address the impending rare earths crisis and it has been welcomed by the United States Magnet Materials Association (USMMA), a coalition of companies representing domestic high performance magnet producers and suppliers.
Coffman's Rare Earth Supply-Chain Technology and Resource Transformation (RESTART) Act of 2010, H.R. 4866, would reestablish competitive domestic rare earths mineral production, processing, refining, purification, and metals production industries to support the growth of green job technology and manufacturing as well as the nation's defense industry, the pointed out in a press release.
The legislation would create a whole-of-government approach involving the U.S. Departments of Commerce, Energy, State, and Defense, Office of the U.S. Trade Representative, and Office of Science and Technology Policy within the Executive Office of the President. Coffman's RESTART Act builds upon several elements of USMMA's platform for resolving the Rare Earth Elements (REE) supply crisis, a serious threat to the United States' economic and national security.
Today, the United States is totally dependent on foreign sources for rare earth materials. These elements are essential to numerous renewable energy and defense systems including wind turbines, hybrid-electric batteries, computer hard drives and precision-guided munitions. Currently, China provides over 97% of the world's rare earth raw materials and dominates the world's rare earth refining, alloying and manufacturing.
In an article in Financial Times, Byron W King stated that Rare earths processing is rarer than rare earths. Rare earths require a complex series of chemical extractive steps to bring the raw ores to the form of useable oxide, or final-stage metal. Processing rare earths is far more complex than, say, extracting gold or silver from ore. There are currently no processing facilities in the west for extracting the high-end rare earths in industrially useable quantities.
Byron King stated that there are two solutions before Western governments-- One is to move factories to China and become part of that system or rebuild rare earths processing industry outside of China, with capability to refine these exotic elements to final stages.
Coffman's bill would:
-Establish a Federal government rare earths working group, with representation from senior appointees of the Departments of Commerce, Defense, Energy, Interior, and State as well as the Office of the U.S. Trade Representative and the Executive Office of Science and Technology Policy at the White House;
-Assess the domestic rare earth supply-chain to determine which rare earth elements are critical to America's national defense and economic security;
-Create a national stockpile within the Department of Defense for important rare earth materials;
-Evaluate international trade practices in the rare earth materials market relative to market manipulation and initiate appropriate action through the World Trade Organization and elsewhere;
-Provide government-backed loan guarantees for domestic rare earths supply-chain development;
-Initiate warranted Defense Production Act projects and programs relative to our national defense and homeland security; and
-Support innovation, training, and workforce development of the entire domestic rare earth supply-chain.
Text of the bill can be found at http://coffman.house.gov/images/stories/hr4866.pdf.
Currently, there is one United States rare earth mine and processing facility (which is not mining), a major United States Geological Survey-validated deposit of rare earths in Idaho, two small alloying facilities and one significant rare earth magnet producer, making the nation's supply-chain for critical renewable energy and defense systems nearly non-existent and leaving the United States dangerously vulnerable to potentially unreliable foreign nations.
USMMA said that urgent and collective action is needed by the federal government in order to head off the impending rare earth crisis. It is estimated that Chinese domestic consumption of rare earth materials will outpace Chinese domestic supply as early as 2012. With a 3-5 year timeline to reestablish a domestic rare-earth supply-chain, the United States is already in a silent crisis. It is unclear whether rare earth material will be available outside China in the coming years, USMMA said.
May be USA has moved in quite swifty before the problem could turn into a crisis, but are European nations gearing up to the challenge? Very soon, the global battles will not be to secure Oil or metals but rare earths.