Articles such as ABC News’ coverage of recent USGA research reporting that the US has untapped and vast potential resources of rare earth elements waiting to replace Chinese supplies are missing the point.
The USGA has correctly identified that even better than a deeply buried lode of rare earth minerals, there are extensive mine tailings left from as far back as the days of the gold rush, dug up and sitting on the surface ready to be processed. Some have already been re-worked once for gold, silver and other metals, and so have been mechanically crushed to conveniently small physical sizes, and to the extent that some other minerals have been removed, concentrated to just the rare earths and substrate gangue.
The USGA has also identified locations in Idaho, Montana, Alaska and Colorado as being economically viable – but therein lies the problem.
Molycorp’s Mountain Pass facility will be producing 13 of the 17 rare earth elements this year, but its success is not the economic nature of the resource in the ground or principally the mix of elements in the resource. It is the extensive high-technology refining facilities that can turn a 3% compound in the rock into a 100% pure oxide useable by industry.
That’s what sets Mountain Pass and the Chinese apart from all these resources in the ground. That’s the barrier to entry for competitors and why most of these resources will never be exploited.
One valuable point ABC News does observe is the time just to bring a mine to producing ore, before refining is even considered. As the article points out, under current laws and regulations, the average time required to get a new mine permitted (or to rework an old one) tops 10 years.
For some time to come, Mountain Pass and the Chinese are going to be the biggest shows in town, whether we like it or not.