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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.
Finally, someone bringing radioactive waste water releases back to America!
The more we mine them, the less rare they will be. Doesn't this defeat the purpose? .... ;)
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.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
Despite the story's GO AMERICA slant, a lot of material is going straight to Japan, where most of it is consumed in the first place. Like to Hitachi: http://www.reuters.com/article/idUSTRE6BK5PL20101221
Oh look. They also signed deals with Sumitomo and Mitsubishi: http://www.yomiuri.co.jp/dy/business/T101219002181.htm
They got huge piles of cash from Sumitomo, Mitsubishi, and Hitachi...which is why it's hilarious to hear the CEO of Molycorp waving American flags in various quotes. Oh, and Molycorp's stock has shot up since their IPO in July: http://www.businessweek.com/news/2010-07-28/molycorp-s-ipo-aims-at-chinese-grip-on-smart-bombs.html
Also, how interesting that the EPA announces cleanup plan of Molycorp site just a few days ago: http://abcnews.go.com/Business/wireStory?id=12460111
The EPA said contaminated material from the Molycorp site includes about 328 million tons of acid-generating waste rock, more than 100 million tons of tailings and acid-rock drainage at the mine and seepage at the tailings facility.
Anyone want to place bets on whether or not the US government will press environmental regulations on Molycorp this time, now that national security interests are involved?
Please help metamoderate.
I am trying to bring a Rare Earths Elements Company online (I have two mineral resources right herre in the U.S. ....But sadly, I can't find funding to start operations.
Wait a second, I call shenanigans. We gave all kinds of tax breaks to the rich, just so they would have money to invest in things like this. Are you trying to tell me the rich aren't investing in American businesses? Next you are going to tell me that rather than funding businesses here, they are investing it all in foreign corporations in countries with cheaper labor and no environmental laws.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
If I'm in the market for rare earth metals, why would I buy from this US source?
It seems like the factors that drove them out in the first place still exist, no? They still have environmental regulations to deal with that the Chinese suppliers don't, they'll still have far higher labour costs than their Chinese competitors, and so on. So if China wants to drive the price back down and run them out of business, they can do so.
Shortly after acquiring their monopoly on rare earth supply China began demonstrating to the world how monopoly power can be used - raising prices at will, using supply as an economic/political weapon, etc. Companies and nations affected by these tactics (which are most users of rare earths outside of China) are not amused and will be willing to pay premiums for a reliable supply at predictable prices. Expect to see companies hedging their bets by entering long term contracts with MolyCorp even if they also continue to buy from China.
Starships were meant to fly, Hands up and touch the sky - Nicky Minaj
If I'm in the market for rare earth metals, why would I buy from this US source?
Illiterate troll is illiterate. From the first line of the summary: "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..."
So if China wants to drive the price back down and run them out of business, they can do so.
The point of the embargo would be to threaten the US with. "Don't push us on human rights / Taiwan / copyright bullshit / economy stuff / national pride / corporate stuff or we'll stop selling you your precious metals." If we can credibly respond with "Fine, we'll just dig up our own in our backyard," that makes the threat pointless. We could go back and forth with it, China says we won't sell, we start digging, china sells, we stop digging, china stops selling etc, but that's not really in anyone's interests to stress the market like that, you'd just be introducing chaos to a big economic sector.
Whether or not the right actors realize that and are mature enough to deal with the problems rather than playing games with billions of dollars is one thing, but assuming the Chinese diplomats and government isn't completely bullheaded about it, they'll either back off from threatening the embargo once they see it won't be that big of a deal for us, the US will the the mature one and not make too big a fuss out of too many issues (ideally focusing on human rights rather than unimportant corporate/copyright issues, though that's doubtful), or both will compromise.
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 think the US should sit on this resource for now. China only has 37% of the world's proven reserves of rare-earth minerals, but they are fulfilling 97% of the world's demand. Let them burn through their easily harvested natural supplies, so a decade from now they will be reliant on other countries for a critical resource. This could provide one of the few checks and balances for dealing with China as a communist super-power.
Better known as 318230.
Considering the mutual hatred the Japanese and Chinese share toward each other, it's not surprising that the Japanese would want to buy rare earths from us rather than the Chinese. In my narrow view of economics, any time we can export something it's a plus. Our trade deficit hasn't exactly been ideal lately.
The game.
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.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
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.
Why guess when you can know? Measure!
DEAR MR. FRANK_TUDOR, MY NAME IS NIMBU-ADAMINABI, I AM THE SON OF THE LATE FORMER DIRECTOR OF RARE EARTH MINING, EXECUTIVE MBUDAH-ADAMINABI OF THE NIGERIA RARE EARTH MINING COMPANY. DUE TO POLITICAL REASONS, MY MINING COMPANY, ESTIMATED TO BE WORTH IN EXCESS OF 78 MILLION DOLLARS, CAN NO LONGER OPERATE IN COUNTRY AND IS IN NEED OF ASSISTANCE TO BE RELOCATED TO THE USA FOR START UP. WE ARE WILLING TO FUND STARTING OPERATIONS FOR YOUR COMPANY, BUT REQUIRE ASSISTANCE TO LIQUIDATE AND TRANSFER THE 78 MILLION DOLLARS IN ASSETS OUT OF THE COUNTRY. ALL I NEED FROM YOU FOR YOUR ASSISTANCE IS:
1) YOUR BANK NAME
2) ACCOUNT NAME
3) ACCOUNT NUMBER
4) BANK ADDRESS, TELEPHONE AND FAX NUMBERS TO ENABLE ME TO TRANSFER THE 78 MILLION DOLLARS INTO YOUR ACCOUNT.
AS COMPENSATION FOR YOUR SERVICE, I AM OFFERING 20% OF THE ASSETS OF THE MINING COMPANY, I REALLY WANT TO INVEST IN YOUR COMPANY AS IT IS LOCATED IN A STABLE GOVERNMENT, SOCIAL, AND ECONOMICAL REGION. TO PROVE MY TRUSTWORTHINESS, I HAVE ATTACHED A COPY OF THE ASSET CERTIFICATE FROM THE BANK OF ADIJUBA IN NIGERIA WITH A LIST OF ALL COMPANY ASSETS. MY LATE FATHER CALLED ME TO HIS BEDSIDE BEFORE HIS CALL TO GLORY (R.I.P) THAT I SHOULD PRAY TO GOD FOR FIRST, BEFORE FINDING A PARTNER IN THE WONDERFUL COUNTRY OF USA. GOD GUIDED ME TO YOU AND HELPED ME AVOID EVIL MINDED AND GREEDY PEOPLE WHO MIGHT TAKE ADVANTAGE OF ME AND MY COMPANY.
THANKS AND GOD BLESS.
BEST REGARDS,
NIMBU-ADAMINABI (NREMC)
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.
Can you be Even More Awesome?!
The Molycorp restart has been known for months. The IPO was back in July.
"Rare earths" aren't really that rare. There are many potential mining sites worldwide. They're sparse, in that huge amounts of rock have to be processed to get small amounts of metal. Because of that, rare earth mines produce vast amounts of useless tailings, contaminated with the chemicals used in extraction. That's why nobody wants one nearby. The big one in Inner Mongolia is considered an environmental disaster area even by Chinese standards.
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?
Luckily, when you spill thorium-laced water over a large area of desert, it never gradually turns into wind-borne radioactive dust...
The Mountain Pass rare earth mine uses froth floatation, a water intensive process. For goodness sake get some facts right. Even in the high desert, we have these things known as "pipes."
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
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.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
http://en.wikipedia.org/wiki/Mountain_Pass_rare_earth_mine#Environmental_impact
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
There are only a few principals in Molycorp, each with millions in salaries plus bonuses. They managed to lose over 80 million USD on 22 million USD in equity in just three short years. They hired a couple firms to shake the fear lobby public relations/news tree. The Japan-China rare earth thing occurs regularly every couple of years, and this incident is no different. You may find in the next SEC filing that the principals have unloaded significant paper dilution in the latest round of scamming. I expect they will close again once the stock sale scamming has peaked.
I call it "The Tragedy of the Privates." There is no incentive for a private owner to manage a resource sustainably when they can simply use their profits to buy another resource to exploit. Democratically manged resources will be managed sustainably, as everyone has an incentive to leave the resource usable by their children, and no one can withdraw all the profits and move on.
The better known "Tragedy of the Commons" is a fairly useless parable, as it compares privately owned resources with unmanaged resources, as opposed to comparing them with democratically managed resources.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
People jump to a lot of conclusions on the internet.
No one was claiming these were engineering problems. The problem is obviously not an engineering one, it is a profit motive problem. The owners would rather have someone else pay for the impact they cause. Even after numerous warnings, they refused to fix things. They were shut down as punishment, because they refused to pay for their mistakes the honest and easy way, they had to pay for their mistakes the hard way. You see, that is what civilized countries do to people who profit off of harming others: we stop them.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
But don't try to pretend that engineering problems are intractable problems.
Don't try to pretend that capitalism problems are engineering problems. Replacing a 14 mile pipe costs money. Money you don't have if some company in China that just dumps the waste in the nearest ditch is undercutting you, but which might become available when the Chinese government tells their company to stop competing with you (by preventing it from exporting out of China).
If I have been able to see further than others, it is because I bought a pair of binoculars.
The article says the mine will produce about 20% of China's current output, not 20% of the amount we import.
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
China's status as the world's largest manufacturer - and soon the world's highest-tech manufacturer - plus all those IOUs they own means that they will be able to do whatever the hell they want. China's not interested in raising their standard of living too fast, if it means that a huge disparity exists between the poor and the really dirt-poor. China doesn't want the manufacturing to race to the next developing nation, and it's big enough that they know there will always be suitable numbers of desperate unemployed population to keep wages (and worker demands) very low.
But China's not stupid, they're plowing this money and tech into their military. Their submarine navy for example isn't made to carry nukes, but they ARE made to act as underwater troop carriers.
Can you please state what makes you think we are in a cold war with China?
Capitalistic competitors, yes, but not cold war adversaries any longer.
Don't know something? Look it up. Still don't know? Then ask.
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.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
I think that the moderators took "Run by a band of brigands" as an indictment of their favorite political group, when I mean it to apply to all political groups equally.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
Within two years the mine could be producing 20% of the amount of rare earths we import from China.
The article says the mine could produce 20% of what China produces, not 20% of what the US imports from China.
I'm not overreacting, I'm always this much of a bastard.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
Well I guess we can agree on something...
The hard one is separating them. And they are hard to separate because of very similiar chemical properties. Currently there is problably no functional rare earths separation facility outside of China and rare earths concentrate (mine output) has to be brought back to China and thus becomes subject of China export quotas. There is one facility in construction (in Malasia as far as I remember) but going to production will take a while. Chinese have driven everyone out of business and then bought remaining facilities and know-how. And no one in intervened - utter stupidity and incompetence of western leadership has surpassed levels of lack-of-self-preservation-instinct in this matter. We are totally dependent on Chinese and this year we learned about this the hard way. Chineese limited their export quotas by 70% and rare earths prices jumped several times. Of course, you can buy them cheaper for producing your widgets, you just need to move your production facility to China.
I just hope we get full rare earth production chain up and working as soon as possible, but it will propably take a few years.