It is well known that rare earths, a group of 17 atomic elements, are essential for the survival of cutting-edge industry in such diverse areas as nuclear launch missiles, hybrid autos, wind turbines, solar devices, oncological applications, night-vision devices and petroleum production.
Once upon a time, America was a major source for these substances; but Beijing had the foresight to co-opt this essential nourishment for its own needs. This left the rest of the world fighting for survival. Recently, China decreased the circulation of REEs to the rest of the world by 35%.
It is not too late to wake up to the malady that threatens our economies. We must declare an immediate offensive as a national emergency! The U.S.' future security and survival is at stake as our representatives wrote in a letter to the head of our defense department. The letter was written on January 28, 2011 by three congressional leaders—Murkowski, Begich and Coffman, to Secretary of Defense Robert Gates.
Remember, the U.S. is historically famous for mobilizing such initiatives as the Nuclear Energy Project in Los Alamos and the Federal Strategic Petroleum Reserve stored in gigantic underground salt caverns along the Gulf of Mexico. It is the largest supply of crude oil in the world. A nation that could consummate such wonders should not be daunted by the current challenges. The following treatment protocols are proposed:
- Diplomatic solutions with China are inadequate. They are only a temporary panacea to a long-time cure. China's own needs will soon overwhelm its own production;
- We must do away with hostile regulations that have driven U.S. manufacturing to foreign shores and prevented REE mining in North America;
- Our federal officials should think of setting up a rare earth reserve similar to the aforementioned Federal Strategic Petroleum Reserve. This would safeguard against the contingency of a supply interruption;
- At the same time, the Obama administration should work with legislators to provide incentives for investments required to rebuild our rare earth industry. The lawmakers have to revamp existing regulatory hurdles and support mining companies with heavy rare earth elements (HREE) separation needs, such as Avalon Rare Metal Inc.'s (TSX:AVL; NYSE.A:AVL; OTCQX:AVARF) Nechalacho REE deposit in Thor Lake, Northwest Territories. Avalon has the most advanced heavy rare earth deposit in North America—and the most advanced toward production after Lynas and Molycorp;
- Having overcome these obstacles, we will require the scientific expertise needed to transmute this ore into viable commercial realities. This would necessitate the remaking of our entire educational system, emphasizing technology and engineering, mathematics and sciences with scholarships for students entering such areas.
The importance of the survival of our rare earth resources are a national mandate. As Lincoln wrote, "It is time for us to disenthrall ourselves." It is time we support meaningful legislation that protects our most important and cutting-edge technologies before it is too late. Investors must monitor this situation closely as interest in rare earths is becoming an international geopolitical issue and there may be bidding wars to own mines closest to production. The Western world is rare earth deficient and requires immediate action.
Disclosure: Long LYSCF and Avalon.
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