U.S. at China's Mercy for Rare Earth Minerals
by Alicia Powe
11/13/2011


The United States is entirely dependent on Red China for rare earth minerals, as environmental zealots strangle the American rare earth manufacturing industry, threatening national security and prospective economic growth.

Rare earth minerals (REE) are critical to everything from military weapons, solar power, electric hybrid cars, wind turbines, computer monitors, plasma televisions, smartphones, other high-tech equipment and all renewable “green” energy. The Department of Defense needs rare earth elements for a variety of applications including communication equipment, smart bombs, global positioning, and guidance and control systems.

Environmentally destructive Communist China has a monopoly on the global supply and production of rare earth and accounts for 97% of the rare earth metals market, though China doesn’t actually contain more than 30% of the world’s rare earths.

The Chinese have a policy of restricting and driving down the currency of exports while driving up the price of those exports. Since 2005, the Chinese have reduced their allowed exports by 6%, yet in 2010 they reduced their exports quota by 40% and announced they will reduce their exports even further in 2011, according to a 2011 report by the US Geological Survey, citing figures from the China Customs Import and Export Tariff Department. The declines in exports contributed to a surge in prices.

The Chinese have also temporarily shut down production of Batou Steel Rare Earth, their largest rare earth mine, admittedly to drive up prices to levels they believe are appropriate, artificially creating critical shortages of rare earths. This was a wakeup call to Congress.
“China is spending more on the rare earth industry than the U.S. spent during World War II,” said Stephen Leeb, chairman and chief investment officer of Leeb Capital Management and author of The Coming Economic Collapse.

“The basic point is that there is a war going on. China has spent two-and-a-half trillion dollars on new energy. That amount of money is about how much the U.S. spent during theSecond World War. In their minds, they are at war," said Leeb.
There was little incentive for development of deposits outside China because prices having been kept lower for years by a glut of Chinese production, said Jim Sims, spokesman of Molycorp, Inc, the only mine in America dedicated to rare earths located in Mountain Pass, Calif.
The National Center for Policy Analysis on Nov. 2 hosted its first conference in Washington addressing the direct link between the U.S. rare earths supply and the nation’s safety, as well as policy proposals to decrease our dependence on foreign suppliers and improve our domestic energy production.

The primary advantage that the U.S. possesses over our strongest competitors is our domestic resource base, according to the National Research Council. Yet domestic mineral exploration has detonated during 1990s and 2000s because the Environmental Protection Agency is crippling U.S. manufacturing of REE.
The U.S. currently ranks the worst in the world among mining companies because it takes a new mine an average of seven to 10 years for production because of Environmental Protection Agency regulations.
Senator Lisa Murkowski (R.-Alaska), blasted the Environmental Protection Agency during the conference for “cranking out regulation after regulation,” obstructing rare earth mining in the United States, and called its proposed regulations a “train wreck.”

“When you look at the trends in our foreign mineral dependence, and when you look at the crush of new regulations that really threatens to set domestic mining back so very significantly, it’s hard to argue that everything is okay,” she said.

“This is not just a prospective situation, China is now exporting rare earths at such a low level that in 2011 this year, there will be global shortages of rare earth estimated between 25,000 and 30,000 tons, meaning by the end of this year there will be between 25,000 and 30,000 tons of demand for rare earth that are not likely to be met by Chinese exports," Molycorp's Sims said.

Congressman Doug Lamborn (R-Colo.), chairman of the House's energy and mineral resources subcommittee and a member of the Armed Services Committee, is author of the National Strategic and Critical Minerals Policy Act that aims to identify the barriers preventing the U.S. from meeting its mineral needs with the metals and minerals mined on U.S. soil.

The development of our vast mineral supply would stimulate the U.S. economy, have an immediate positive effect on job creation, and is fundamental to a strong manufacturing sector, said Rep. Lamborn. The U.S. will continue to shift jobs overseas, to China, and forfeit our economic competitiveness unless we take steps to develop our own mineral resources.

“The war for resources is a war for the ability to live a decent life in the 21st century. Our children and grandchildren are going to suffer accordingly, and the American way of life is going to suffer,” said Leeb of Leeb Capital Management.
Rep. Mike Coffman (R.Colo.) is author of the RESTART (Rare Earths Supply-Chain Technology and Resources Transformation) Act, which would direct the Defense Logistics Agency to expedite a permanent permitting process.

The challenge will be in bringing the House and Senate together to agree on legislation addressing domestic minerals that will be signed into law by the President.

As President Obama pushes the green agenda as a way to champion energy independence and create jobs, the U.S. will grow increasingly energy dependent due to the lack of rare earth minerals necessary for all green energy technology. Furthermore, the shift of scarce rare earths to green energy technologies threatens the available inventory of rare earth needed for critical military and aerospace technologies.

Alicia Powe is a National Journalism Center intern at HUMAN EVENTS. She?s a recent graduate of John Jay College in New York.

TMR Advanced Rare-Earth Projects Index

TMR is first and foremost interested in the rare-earths sector from the strategic point of view. We are interested in the potential value that specific rare-earth deposits and their development could have, in the furtherance of the needs and demands of the overall technology supply chain.

The TMR Advanced Rare-Earth Projects Index consists of rare-earth projects currently underway around the world, which have been either:
formally defined as a mineral resource or reserve under the guidelines of a relevant scheme such as NI 43-101 or the JORC Code, or
subject to past mining campaigns, and for which reliable historical data is available, even if not formally compliant with a relevant scheme.

The Index, last updated on October 21, 2011, currently consists of 24 advanced rare-earth projects, associated with 24 different companiesand located in 9 different countries, as shown in the table below. Click on a project name to see the data associated with the project.

TMR Advanced Rare-Earth Projects Index
Project
Location
Owner(s)

Ticker Symbol(s)
Bear Lodge (Bull Hill Zone)
USA
Wyoming
Rare Element Resources Ltd.
TSX.V:RES, AMEX:REE
Bokan (Dotson / I & L Zones)
USA
Alaska
Ucore Rare Metals Inc.
TSX.V:UCU, OTCQX:UURAF
Clay-Howells
CAN
Ontario
Rare Earth Metals Inc.
TSX.V:RA, OTCQX:RAREF
Cummins Range
AUS
Western Australia
Navigator Resources Limited &
Kimberley Rare Earths Limited
ASX:NAV
ASX:KRE
Dubbo
AUS
New South Wales
Alkane Resources Ltd.
ASX:ALK, OTCQX:ANLKY
Eco Ridge (Elliot Lake)
CAN
Ontario
Pele Mountain Resources Inc.
TSX.V:GEM, OTCQX:PMNHF
Eldor (Ashram Zone)
CAN
Quebec
Commerce Resources Corp.
TSX.V:CCE, OTCQX:CMRZF, F:D7H
Hastings
AUS
Western Australia
Hastings Rare Metals Limited
ASX:HAS
Hoidas Lake
CAN
Saskatchewan
Great Western Minerals Group Ltd.
TSX.V:GWG, OTCBB:GWMGF
Kangankunde
MWI
Balaka
Lynas Corporation Ltd.
ASX:LYC, PK:LYSCF
Kutessay II
KGZ
Chui
Stans Energy Corp.
TSX.V:HRE, OTCQX:HREEF
Kvanefjeld
GRL
Kujalleq
Greenland Minerals and Energy Ltd.
ASX:GGG, PK:GDLNF
Montviel
CAN
Quebec
Geomega Resources Inc.
TSX.V:GMA
Mount Weld
AUS
Western Australia
Lynas Corporation Ltd.
ASX:LYC, PK:LYSCF
Mountain Pass
USA
California
Molycorp Inc.
NYSE:MCP
Nechalacho (Thor Lake)
CAN
Northwest Territories
Avalon Rare Metals Inc.
TSX:AVL, AMEX:AVL
Nolans Bore
AUS
Northern Territory
Arafura Resources Ltd.
ASX:ARU, PK:ARAFF
Norra Karr
SWE
Småland
Tasman Metals Ltd.
TSX.V:TSM, PK:TASXF, F:T61
Sarfartoq (ST1 Zone)
GRL
Qaasuitsup
Hudson Resources Inc.
TSX.V:HUD, OTCQX:HUDRF
Steenkampskraal
ZAF
Western Cape
Great Western Minerals Group Ltd.
TSX.V:GWG, OTCBB:GWMGF
Strange Lake (B Zone)
CAN
Quebec
Quest Rare Minerals Ltd.
TSX.V:QRM, AMEX:QRM
Wigu Hill
TZA
Morogoro
Montero Mining and Exploration Ltd. &
Korea Resources Corp.
TSX.V:MON
Zandkopsdrift
ZAF
Northern Cape
Frontier Rare Earths Ltd. &
Korea Resources Corp.
TSX:FRO, PK:FREFF
Zeus (Kipawa)
CAN
Quebec
Matamec Explorations Inc.
TSX.V:MAT, PK:MTCEF