U.S. and China Rush to REEs
Source: The New York Times, Phil Taylor (7/23/10)
"Shortages highlight the need to revive the U.S. rare earths industry."
This is all good news for China, which last year produced more than 97% of the world's rare earth oxides and controls about half of the globe's known reserves.
With the opportunity to tighten its grip on a burgeoning market, China earlier this month cut its rare earths export quota by 72% for the second half of 2010, a move aimed at forcing international firms to manufacture rare earth products on Chinese soil.
"I'm not sure we're going to have much choice over the next short while," said Jon Hykawy, a clean technology and materials analyst at Byron Capital Markets Inc. "We're going to be in a situation where a lot of the downstream processing is done by Chinese companies."
China's latest cut in exports exposed what some believe to be a significant shortcoming in U.S. energy policy and has re-focused attention on the need to revive the domestic rare earths industry needed to power a low-carbon economy.
Lawmakers and federal agencies are beginning to see increasing risks in a U.S. dependence on foreign suppliers. Rep. Mike Coffman (R-Colo.) and Sen. Lisa Murkowski (R-Alaska) have introduced companion bills to authorize new assessments and programs to help the U.S. strengthen domestic mining and processing of rare earth elements.
A key provision in both bills would authorize the Energy Department to issue loan guarantees for rare earth projects.