Home Original US Takes Steps to Answer China’s Rare Earth Elements Monopoly
US Takes Steps to Answer China’s Rare Earth Elements Monopoly

US Takes Steps to Answer China’s Rare Earth Elements Monopoly

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By Dr. Brian Blodgett
Faculty Member, Homeland Security, American Military University

There are 17 rare earth elements that America depends on for our military and civilian use. But we do not have the capability to mine and produce them; for that, we must rely on China.

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Rare earth elements are not that rare; it is the extraction of the elements from the ore they are naturally found in that limits our ability to produce them ourselves.

Rare earth elements are vital components in our nation’s next generation weapons and are already a key component for some of our current military equipment. For most Americans, we find them in hybrid cars, reefing crude oil, special glass for welders, computer and television screens, and X-ray and MRI scanning systems. Modern cell phones use nine of the 17 rare earth elements.

Mountain Pass

From 1952 until the 1990s, the Mountain Pass mine in California was one of the world’s only suppliers of rare earth elements.

As Rick Mills explained in Mining.com in 1980, Nuclear Regulatory Commission (NRC) and International Atomic Energy Agency (IAEA) misclassified rare earth elements and placed the mining of them under the same regulation of thorium, a radioactive element that is removed when processing heavy rare earth elements. This error made the processing of rare earth elements an increasingly dangerous and costly business.

“New, onerous regulations on thorium made the mining and refining of thorium-bearing rare earth elements risky. Over the next two decades, the US rare earth mining industry collapsed,” Mills explained.

Mills noted that rare earths are great multipliers they are used in making everything from computer monitors and permanent magnets to lasers, guidance control systems and jet engines. There is no substitute and no other supply source is available other than China.

Other countries also stopped processing these minerals due to the change in regulations and the companies strained to be profitable. China, an International Regulatory Agency observer, is not a signatory to its agreements and soon became the sole producer of rare earth elements.

In 2002, the only rare earth mine in the United States, Molycorp’s Mountain Pass closed. Over the next decade the status of the mine and its ownership changed several times. In 2014, it declared bankruptcy.

The Mountain Pass mine resumed operations in 2017, but it must send its ore to China for processing and extraction of the rare earth elements. Additionally, Mountain Pass is owned by MP Materials, a consortium that includes a Chinese rare earths mining operation, Leshan Shenghe Rare Earth Co., which serves as the mine’s technical advisor and holds a non-voting minority interest.

Each month, the United States mines between 3,300 and 4,400 tons of lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium, scandium and yttrium, all of which is sent to China for processing.

Colorado Pilot Plant Will Be the First Rare Earths Processing Facility outside China

In the western suburbs of Denver lies a key component of America regaining independence from China’s hold on rare earth element processing. There, according to the Denver Post, CEO of USA Rare Earth Pini Althaus said, “our Colorado pilot plant will be the first processing facility outside of China with the ability to separate the full range of rare earths — lights, mids and heavies.” USA Rare Earth teamed with the Texas Mineral Resources Corporation to build the Wheat Ridge facility, which is expected be complete in the next few months.

Once the Wheat Ridge facility opens, USA Rare Earth plans to move the equipment to the Round Top mine.

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According to Dr. Eugene Gholz, a rare earth expert, “Once you take it out of the ground, the big challenge is chemistry not mining; converting the rare earths from rock to separated elements.” This process involves a series of acid baths.

In West Texas, approximately 87 miles east of El Paso, sits Round Top. The mountain, owned by Texas Mineral Resources Corporation, contains five out of the six light rare earths and 10 out of the 11 heavy rare earths. In addition, it has all five of the permanent magnet materials and a large deposit of lithium, which is critical for producing the electrical vehicle batteries.

Estimates are that Round Top has over a 130-year supply of these critical minerals and expects to produce enough lithium to become the nation’s second largest source.

According to Althaus, “The first 20 years, we expect to generate $8.4 billion in revenue. That’s based on extracting 20,000 tons per year. But that’s just for the United States.” The estimates for operating Round Top will be $15 a ton, compared to Mountain Pass that is at $80 a ton.

China Holds More than 60 Percent of the World’s Market of Rare Earth Permanent Magnets

USA Rare Earth also acquired the neodymium iron boron (NdFeB) permanent magnet production equipment from Hitachi Metals America, Ltd. in North Carolina. This equipment is used to make rare earth magnets, which China currently holds more than 60% of the world’s market.

Rare earth magnets are used in vehicles, wind generators, medical devices, smart phones, and defense. A standard vehicle might include 30 magnets that use rare earth elements; a luxury car could have up to 250.

USA Rare Earth will store the equipment until the company can locate a suitable location for its magnet production facility. The planned operation will eventually produce 2,000 tons per year of rare earth magnets, filling 17% of domestic demand, and will generate $140 million in annual sales.

Blue Line’s Hondo, Texas, Site Will Host a Rare Earths Separation Facility 

Last year, Australia’s Lynas Corp, the only major rare earths producer outside China, teamed with the U.S. rare earth separation company Blue Line. Together, they plan to set up a rare earths separation facility in Hondo, Texas, for both medium and heavy rare earths products.

By teaming with Blue Line, Lynas will help secure its continued production of rare earth elements and facilitate the ability of the United States to have a rare earth element processing plant.

Defense Production Act and Rare Earth Elements

Last summer, President Trump issued five Presidential Determinations authorizing the use of the Defense Production Act of 1950 (DPA) Title III, Section 303, to strengthen the nation’s domestic industrial base and supply chain for rare earth elements.

According to the Federal Emergency Management Agency (FEMA), the DPA is “the primary source of presidential authorities to expedite and expand the supply of resources from the U.S. industrial base to support military, energy, space and homeland security programs.”

Per Section 303 of the DPA, the president had to determine that rare earth elements are essential to the national defense; that our industry cannot reasonably expect to provide the material in a timely manner without presidential action; and that the actions taken are the most cost effective, expedient, and practical alternative method for meeting the need.

The Presidential Determinations cover:

US Army to Partially Fund Rare Earth Elements Processing Facilities

According to Reuters, “The U.S. Army plans to fund construction of rare earths processing facilities, part of an urgent push by Washington to secure domestic supply of the  minerals used to make military weapons and electronics.”

The Army said it would fund up to two-thirds of the refiner’s cost and that it may fund multiple projects. The ultimate goal is a rare earths separation plant built within the United States and backed by as much as $40 million.

What Is Next for Rare Earth Mining in the United States?

Mountain Pass and Lynas/Blue Line were both selected for Phase I of the construction. This is a major achievement for both as it will help fund the detailed planning and design of a U.S.-based Heavy Rare Earth separation facility.

In an interview with The Australian Financial Review, Hudson Institute fellow Thomas Duesterberg said even though MP Materials has Chinese involvement, “that can be in the long run neutered or erased.” But “Australia is certainly a trusted partner and thinking about China has evolved quite a bit in Australia as well.”

Officials at the Department of Energy have barred government scientist from collaborating with Mountain Pass.

In late April, Senator Cory Gardner (R-CO) and five other senators wrote to Defense Secretary Mark Esper and Secretary of the Interior David Bernhardt, saying that “Ensuring a U.S. supply of domestically sourced rare earths will reduce our vulnerability to supply disruptions that poses a grave risk to our military readiness.” The senators also warned that the DOD and DOI “must take care that no link in the chain passes through a country that presents risk of supply disruption.”

While the U.S. remains dependent on China for processed rare earth elements, it appears clear that our days of relying on its role in the industrial supply chain of rare earth elements may be ending. We simply cannot afford to have China as a potential single point-of-failure for these common, but critical rare earth elements.

About the Author

Dr. Brian Blodgett is an alumnus of American Military University who graduated in 2000 with a master of arts in military studies and a concentration in land warfare. He retired from the U.S. Army in 2006 as a Chief Warrant Officer after serving over 20 years, first as an infantryman and then as an intelligence analyst. Dr. Blodgett is a 2003 graduate of the Joint Military Intelligence College where he earned a master of science in strategic intelligence with a concentration in South Asia. He graduated from Northcentral University in 2008, earning a doctorate in philosophy in business administration with a specialization in homeland security.

Dr. Blodgett has been a part-time faculty member, a full-time faculty member and a program director. He is currently a full-time faculty member in the School of Security and Global Studies and teaches homeland security and security management courses.

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