Earlier this month, the U.S. Department of Commerce released a report on a strategy to ensure the nation’s access to supplies of what it calls “critical minerals.” Among those minerals are the 17 rare earth metals used in everything from cell phones to sophisticated military lasers.

A previous report finalized in May 2018 lists 35 minerals, including the rare earth metals, that had been identified as critical to U.S. economic and national security interests. Other minerals on the list are aluminum, chromium, graphite, lithium, titanium, and uranium.

The Department of Commerce’s strategy presents 6 calls to action, 24 goals, and 61 recommendations detailing how the country can regain control of its supplies of these minerals. The overall strategy directs the U.S. Department of the Interior to find domestic supplies of these minerals, make available information on how to produce them, and speed up permitting of operations to extract them.

That may sound obvious, but it’s not going to be easy. According to the U.S. Geological Survey (USGS), the United States now relies on imports for 100% of its supply of the rare earth minerals, 100% of its graphite supplies, and 93% of its supply of uranium.

The Chinese, who supply nearly 80% of the U.S. demand for rare earths, recently raised the threat of cutting off exports to the United States if the Trump administration goes ahead with the third round of tariffs to include nearly all Chinese goods.

A significant problem for the United States is locating domestic deposits of these critical minerals. Just 18% of the U.S. land mass has been geologically mapped at a level necessary to conduct a “robust” assessment of mineral resources according to the USGS. Mapping the rest of the country won’t happen overnight.

Recognizing that fact, the Commerce Department’s report sets as one of its 24 goals obtaining supplies of critical minerals from “allies and partner countries” to help ensure access and reducing reliance on “uncertain sources.” And while China may be an uncertain source, it is also the repository of nearly 40% of the world’s supply of rare earth minerals, giving it a prime position to dictate not just supply, but price.

The most expensive of the rare earth metals as of late May was praseodymium which sold for more than $100,000 per metric ton. Praseodymium is used to make magnets for computer hard drives and wind turbines, batteries for cell phones and electric vehicles, and as a catalyst in oil refining. The cheapest rare earth metal, samarium, costs about $14 per metric ton is also used in producing magnets. A single wind turbine requires about 500 pounds of rare earth metals.

One last note about finding new U.S. deposits of rare earth elements: the deposits are often laced with radioactive thorium. That, and other consequences of rare earth mining, can have a seriously harmful effect on the environment.

New discoveries of U.S. deposits of rare earth minerals are only part of the story. Another part is processing and refining the minerals. There is one (mothballed) processing plant in the United States at the Mountain Pass mine in California. The mine currently sends its production to China for processing and then the refined products are imported into the country by U.S. manufacturers.

At one time, the Mountain Pass mine was the world’s leading producer of rare earth elements before being shut down in 2002 when prices for the minerals fell. The mine was owned by oil and gas company Unocal and was nearly sold to China’s CNOOC Ltd. when the Chinese company bid for Unocal’s assets. Molycorp, which later sold the mine as part of a 2015 bankruptcy proceeding, purchased the mine from Chevron following Chevron’s 2005 acquisition of Unocal.

Molycorp built a state-of-the-art processing plant at the mine site, but never put it into operation. The mine’s current ownership consortium reopened mining operations in January and has targeted processing to begin in about 18 months.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.