California Rare-Earth Mine Reopens

burnin1965 writes in to let us know that the looming crisis in rare-earth materials (which we have discussed recently) has prompted Molycorp, the erstwhile operator of a California mine closed in 2002, to announce plans to reopen it. "With increasing prices on rare earth ore, tariffs raised by the Chinese government, and the threat of embargoes that would damage United States high-tech manufacturing Molycorp now has the needed incentive to reopen the California Mountain Pass mine. They will spend the capital needed to implement badly needed updates to environmental controls that will mitigate the radioactive waste water releases that plagued the mine in the past. Chinese imports in the 90s nearly halved ore prices and the California mine experienced multiple failures in environmental controls that resulted in the release of huge volumes of radioactive waste water. Updating the mine to address the environmental issues was not financially viable due to the cheap Chinese imports so it was closed in 2002." Within two years the mine could be producing 20% of the amount of rare earths we import from China.

Comments

Re:Good!

[spun]

Really? You are confused here? What is the difference between concentrating radioactive elements and running hundreds of thousands of gallons of water through them, and having tiny amounts of water percolate through the same elements widely dispersed in their natural state? You need help figuring that out, do you? Take off the blinders and stop apologizing for people who will gladly ruin your entire family's health and take no responsibility for it.

This is basic, people, something we all should have learned no later than preschool: you make a mess, you clean it up.

Re:Molycorp's production is going straight to Japa

[Spoke]

Uh, how is exporting raw materials (many of which will end up in electronics back on our shores) bad for America?

Sure, it would be better if those materials were used in local manufacturing facilities, but opening a source of those raw materials will make it more financially viable to do so.

I burn in hell for demanding responsibility?

[spun]

Progress does not consist of a small group of people enriching themselves at everyone else's expense. Progress consists of better things for everyone, not a trade off where some people must lose in order for others to win.

All I ask is that people pay all the costs they generate, rather than asking others to pay. Why should I burn in hell for asking that people take responsibility for their actions, and how their actions affect others?

I'm all for real progress, but poisoning people, animals, plants and ecosystems in order to extract useful minerals is not progress. When we extract those minerals without harming others, that is progress. Making things better for some by making things worse for others is not progress.

Re:I burn in hell for demanding responsibility?

[mdarksbane]

Technically, one would have to weigh the benefits against the cost.

If we slag 100 acres of wilderness to produce modern medical technology, I would call that progress. If we destroy the entire biosphere of a continent to save 5 cents at the gas pump, probably not.

As a general rule, most people when voting with their dollars have chosen cheap goods over cleaner. When they get to vote with what they perceive as other people's dollars, however, suddenly clean sounds a lot better.

Re:I burn in hell for demanding responsibility?

[spun]

Or, rather than waiting for the damage to happen and suing the people who cause it, we could stop it BEFORE it happens through proper enforcement of regulations. You can trace pollution, but putting it back in the bag once it's loose is problematic.

Another problem is that externalizing costs lets an entity rake in unfair profits that can be used to fight any lawsuits, and in our legal system, David loses to Goliath more often than not. Goliath simply has to keep fighting until David runs our of money. I'd love to see tort reform that put the rich and the poor on even legal footing, but I'm not holding my breath.

Re:I burn in hell for demanding responsibility?

[khallow]

All I ask is that people pay all the costs they generate, rather than asking others to pay.

I disagree. A standard NIMBY tactic (perhaps more a phenomena since "tactic" implies conscious intent) is to build residential real estate next to a noxious neighbor (say an asphalt plant or adult store), then get government to impose harsh restrictions on the location's ability to do business, eventually leading to elimination of the business. Then the price of the neighboring real estate rises.

The noxious neighbor didn't have a choice in the matter of what the neighboring land is used for (unless they can buy it). So they end up generating an externality, but not by choice. The resulting "harsh restrictions" above then are externalities on the noxious neighbor!

This imposition of externality is in particularly repugnant form with environmental regulation. Ok, fine, society decides that pollution causes a "cost" which "polluters" should pay. Rather than figure how a reasonable dollar amount for the cost in question, regulation on the activities of the polluter are imposed without regard for the cost of compliance with the regulation.

The absolutely worst of the lot are the costs which are decided after the fact when the perpetrator no longer has any means to reduce the alleged harm of the activity. The US Superfund program is probably one of the worst environmental regulations of the 20th Century for one very important reason, because costs of compliance with Superfund are decided long after the polluter has lost any means to control the pollution in question. I remain puzzled how something like that could ever have survived Constitutional challenge because it's clearly a case of heavily punishing an activity which wasn't wrong at the time it happened.

I think a reasonable solution here is that if you're going to create an expensive externality, such as deciding the environment is so valuable that onerous burdens must be placed on business in order to comply, you should be the one to pay for it in the beginning.

Re:Molycorp's production is going straight to Japa

[DCFusor]

No, it's not all going to Japan, just some. A lot of the Japanese companies are going to use this stuff *here* and might as well, because many of them manufacture little things like cars, um, here to sell to us. Molycorp is going mine-to-magnet right here, and that's where the value added is. I'm glad of it, having bought quite a lot of their stock when it was priced about half what it is today...yum. (I trade for a living, and this has been one of the good trades this year).

RE mining has been an environmental problem for a long time. For whatever reason, the RE ores always seem to have a lot of thorium in them also -- there's your radioactive issue, and why we don't just refine and use that too, I'm clueless, as the price of uranium is also doing well (and I own stock in that too that is also doing well). As the Indians know, it's part of a useful fuel cycle as it can be bred into fissile fuel just like U238 can be. The other issue with RE's is that most of them are so chemically similar that they can be real tough to get apart into the individual RE metals. GM and others have done some work on making pretty good magnets with "what you get" rather than what you'd have in a perfect world, slightly reduced performance compared to perfect, but far lower costs at a few stages of the process.

At the instant of this writing, MCP is up 10.2% *in one day* which is about a usual annual return from the stock markets. REMX, an ETF that tracks RE's is only up 0.87%. No guts, no glory. I don't know about the other bucks for sure, but the profits trading on MCP are going to this redneck engineer American to be spent here. I'm sure like any news driven stock, that it will either go back down, or flounder around awhile before going up again. That's why I call myself a trader -- I don't invest, I trade, and know when the heck to get out and put the money back into first bank of mattress....

Copper is doing pretty well these days too, some due to manipulation, but in general we're finding out that Malthus was right, just in the wrong century. Won't be many decades before old landfills become a "mineral rights" issue. We really do live in a finite place.

Re:Molycorp's production is going straight to Japa

[zippthorne]

That's too narrow. (or maybe not narrow enough?)

Equitable trade is mutually beneficial.

Being a net exporter means that you lose all your stuff and get a wad of IOUs of uncertain value (inflation, for instance, kills the value of your holdings)

Being a net importer means you incur debt, but get all the wonderful stuff.

Neither of which is particularly healthy, and certainly can't possibly be sustainable in the long term. Think about it: China's status as the world's provider of cheaply manufactured goods means that their own citizens are not benefiting from that massive industrial capacity as much as they could be, and they're sure as hell not benefitting from that capacity if the import side of that is money or ownership stakes in foreign countries, and not, y'know, stuff.

Re:Good!

[fuzzyfuzzyfungus]

Did you sleep through the part of EC101 where they talk about "externalities"? Or were you attending the "You can't make an omelette without killing some people" school of progress, where they skip that part entirely?

Re:Bad

[confused one]

Because it's going to take nearly a decade (ok, 12/ a decade minimum) to spin up their operations. If they start now, they'll be ready when the Chinese market collapses.

Re:better then buying for mines where works make $

[spun]

Those workers aren't going anywhere. Those mines will not be shut down just because the US may produce up to 20% of our rare earths domestically. The rest of the world still needs rare earths, and we still need to get 80% of ours from someplace else.

Cold War with China

[BlueBoxSW.com]

Can we finally admit that we're in a cold war with china? Finally?

Re:Good!

[spun]

Who said we were a civilized country anymore? We're being run by a band of brigands intent on looting and pillaging rather than inventing and building, just like a third world banana republic. We ship raw materials and import finished goods, just like a banana republic. We lack any national health care system, when every other civilized nation has one. We execute people. We have more people in prison, per capita, than any other developed nation. We have a higher infant mortality rate than other developed countries. In all ways, we are becoming an uncivilized nation, and I didn't even mention reality television.