US Sits On Supply of Rare, Tech-Crucial Minerals

We've recently discussed China's position as the linchpin of the world's supply of rare earths, and their rumblings about restricting exports of of these materials crucial to the manufacture of everything from batteries to wind turbines. Now an anonymous reader sends this MSNBC piece on the status of the US's supply of rare earths. "China supplies most of the rare earth minerals found in technologies such as hybrid cars, wind turbines, computer hard drives, and cell phones, but the US has its own largely untapped reserves that could safeguard future tech innovation. Those reserves include deposits of both 'light' and 'heavy' rare earths... 'There is already a shortage, because there are companies that already can't get enough material,' said Jim Hedrick, a former USGS rare earth specialist who recently retired. 'No one [in the US] wants to be first to jump into the market because of the cost of building a separation plant,' Hedrick explained. ... [S]uch a plant requires thousands of stainless steel tanks holding different chemical solutions to separate out all the individual rare earths. The upfront costs seem daunting. Hedrick estimated that opening just one mine and building a new separation plant might cost anywhere from $500 million to $1 billion and would require a minimum of eight years. [But the CEO of a rare earth supply company said] 'From what I see, security of supply is going to be more important than the prices.'"

Comments

Supply and demand?

[spun]

If these rare earths are so rare and valuable, and only going to become more so, why should the upfront cost matter? The plant should still make a huge profit, unless I am misunderstanding basic economics.

Seems people in America only want to invest in fraudulent get rich quick gambling schemes these days. Actual resource extraction and manufacturing is for the peons.

Re:Supply and demand?

[Walter White]

The minerals will sit there waiting until we are ready. In the mean time, separation technology will improve and (unless other sources are discovered) proce/value will increase. Once shortages occur, prices will skyrocket and producers will argue that we need to fast-track and sidestep environmental concerns in the name of security.

- Profit!

Re:Supply and demand?

[mcgrew]

Most likely the high cost and long wait times resulting from EPA, OSHA and various state agency regulations (not to mention fighting Greenpeace and other hippies) make it more economical to just import the stuff from China rather than try to mine it and build a processing plant here.

If you had been alive before Nixon signed the Clean Air Act and the Clean Water act you wouldn't be so anti-environment. When I grew up in Cahokia, you could not drive through Sauget past the Monsanto plant with your windows down, even in hundred degree heat. It didn't just stink, it burned your lungs. Nowdays it's rare that you even smell anything.

I think my right to breathe should trump Monsanto's privilege of making billions of dollars of profits more than they already do. THIS is why Free Trade is a BAD idea -- how can someone who likes to breathe compete with a country who doesn't give a damn how filthy and poisoned their country is?

As to OSHA, that protects YOU. Did you know that more people die in Chinese mines than all the other mines in the world? Protecting workers from sociopaths who don't value human life in the least is a GOOD thing, unless you're one of the sociopaths who don't care about human life and don't work in a dangerous industry.

EPA regs are a GOOD thing, and only the woefully ignorant think otherwise. It would do you good to read a little history.

Now get off my lawn, yuppie!

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Re:US mining is politically uneconomical

[j. andrew rogers]

I own a mineral deposit in a central Nevada mining district, though not with any intent to exploit it. I am quite familiar with the regulatory details of mining in the US. It is very different than the caricatures spoon-fed to the public by activist organizations.

Environmental impact studies are fine and necessary. Archaeological impact studies are mostly bullshit; the region is littered from end-to-end with artifacts leftover from the Lake Lahontan civilization (http://en.wikipedia.org/wiki/Lake_Lahontan), you can find stuff everywhere if you know what to look for. So everyone just pretends that there are no artifacts.

There are two big problems that really make it impossible to profitably mine US deposits. First, there is an environmental lawsuit industry that thrives on delaying the opening of mines until the companies run out of money to deal with them. The lawsuits are mostly bullshit about hypothetical habitats for endangered species and the like; they aren't credible, but that isn't the point and some courts are willing to entertain them indefinitely.

Second, a big problem is that if you pick up a rock, you own it. In the western US mining districts, those rocks are laden with natural concentrations of all sorts of low-value heavy minerals that are magically transformed into "toxic waste" the minute you touch it. This has arguably been the biggest killer of new mining. The obligation to scrub natural mineral formations of elements with no economical value very substantially increases the cost because you end up "mining" metals that have no value. This is particularly problematic for things like rare earth metals -- the mineral complexes are intrinsically "toxic waste" under standard regulatory regimes. It doesn't matter that they are natural, the mining company is obligated to treat nature as a superfund site.

Regulations regarding arsenic in the water have been similarly exploited by environmental activist groups to shut down mining. In many places in the western US, the background levels of arsenic in the groundwater is naturally several times higher than the EPA limits because of the local mineral formations. The way it works now is that if you do mining near those formations, you become responsible for bringing the natural background levels within EPA guidelines -- a fool's errand. So mining companies avoid areas where the local arsenic levels exceed EPA guidelines, lest they become responsible for cleaning up arsenic they didn't produce.

Environmental activists have very cleverly created a regulatory framework that holds mining companies responsible for natural mineral distributions even if the mining companies are in no way responsible. This has effectively outlawed heavy metal mining in the western US because the environment is naturally full of heavy minerals.