The World in an Escalating Race for REEs

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"Whenever the word "shortage" is in play, somebody is making huge profits."

Whenever the word "shortage" is in play, somebody is making huge profits as demand exceeds supply. Miners from Australia to California are now in a quest to mine and refine a new batch of rare earth elements (REEs)—many from old iron diggings once thought exhausted.

"Earth" is an antique term of geology used to refer to a metal that could not be dissolved in water or purified through low-heat smelters that were used 300 years ago. The ion structures still make them difficult to separate without an intense chemical regimen, which is partly the reason that reconstituting a homegrown industry has been so difficult. The refining process often leaves behind a hazardous mess, with radioactive thorium tailings. Almost all the commercial REEs globally used to be mined from a pit in remote Mountain Pass, California, but that mine—and the entire American industry with it—was shut down because of a radioactive leak in 2002.

Without the same rigorous environmental reviews, China began large-scale mining in Sichuan Province the early part of the 2000s.

The U.S. Stake

There's been some discussion of how the U.S. military might deem REEs a "strategic" resource, much like uranium in the 1940s and 1950s and oil in the 1910s and 1920s. This would require the Defense Production Act, a Korean War-era law that helps speed up materials acquisition deemed necessary in combat, which would force businesses to sign deals with the government and give the White House direct oversight of the industry. A subsidiary of Molycorp, Inc., a mining company in Colorado, is now spending $531M to build a new separation plant at Mountain Pass, a job that should be completed by January of 2012. But the mine produces only one-half the REEs in the series—cerium, lanthanum, samarium, gadolinium, neodymium, praseodymium and europium.

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