WASHINGTON – U.S. mining for rare earth elements is rapidly falling behind China, a trend that “limits our growth, our competitiveness and our national security,” Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski (R-Alaska) said today.
Rare earths are unique elements found in batteries, magnets and alloys for an array of high-tech gadgets, ranging from smartphones to fighter jets. China holds a near monopoly on the production of rare earths, and U.S. dependence is worsening.
According to the U.S. Geological Survey, imports in 2016 represented more than 50 percent of American consumption of 50 non-fuel mineral commodities, a market valued at $32.3 billion annually. Of those 50, the U.S. was 100 percent import-dependent on 20, representing $1.3 billion. In 2015, the U.S. was half-dependent on 47 non-fuel mineral commodities and 100 percent reliant on 19 commodities.
Murkowski said at a committee hearing that this trend exposes the U.S. to potential supply shortages and price volatility, while also reducing international leverage and attractiveness for manufacturing.
“Instead of lessening our dependence, we are actually increasing our dependence,” she said. “We’re not making headway on this issue. … What are we doing wrong here?”
Industry and governmental experts blame a sluggish permitting process for mining. S&P Global Market Intelligence’s director of reports Chris Hinde pointed to the Kensington gold mine in Alaska, which started production in 2010, 17 years after the projected start date. The Rosemont copper mine in Arizona, which was also supposed to start production in 2010, has yet to secure a mining permit.
Hinde said the issue is that in the U.S. there are multiple agencies handling the permitting process, whereas market leaders like Canada and Australia have dedicated lead agencies that communicate to all other agencies and stakeholders.
Alf Barrios, CEO of Rio Tinto Aluminum, said that while the permitting process for a mining project in Canada might take two years, the U.S. timeline is anywhere from five to 10 years. Rio Tinto Aluminum’s Resolution Copper project near Superior, Ariz., which would supply 25 percent of American copper needs and create 3,700 jobs, is nowhere near completing the permitting process, which began in 2013 and has cost $1.3 billion to date.
“It’s quite staggering that now in another country like Canada we would be having those permits in our hands and processing and progressing with the project, and we’re still going through the process, trying to obtain those permits,” he said.
“It sounds like our neighbors to the north may have some examples, some processes and some parameters that may be helpful for us here,” Sen. Steve Daines (R-Mont.) said.
Daines said that mining is the “backbone” in his state, expressing disappointment that Montana is only capitalizing on about 1 percent of potential mining opportunities.
The U.S. has been without a producer of rare earths since 2015, following the bankruptcy and closure of Molycorp, which produced rare earth materials used in electric cars and wind turbines. Alaska-based Ucore Rare Minerals, Inc. is currently developing the Bokan-Dotson Ridge Rare Earth Project, which would create a new domestic supply.
“Without a U.S. supply base, should the Chinese ever decide to curtail the supply of these materials to the U.S., we would be left without access, endangering both our domestic economy and our military,” Ucore’s vice president of project development Randy MacGillivray told the panel.
Sen. Angus King (I-Maine) agreed with MacGillivray, saying that Congress needs to develop a “predictable and timely permitting process that still adequately protects the environment.”
MacGillivray said China is able to dominate the market using outdated and environmentally destructive mining and processing practices. China’s methods, he said, are driven by a solvent separation technology that uses highly corrosive chemicals and generates large amounts of toxic and radioactive waste. He said an artificial lake located in China’s Inner Mongolia region, which is plagued by black chemical sludge, is an example of the environmental toll from China’s mining practices.
U.S. exploration for rare earths is also falling behind with production. According to S&P Global Market Intelligence, the U.S. last year spent $500 million on exploration for rare earth materials. Canada in that same span spent nearly double that amount, while Australia spent $897 million.
“The USA has abundant resources of metals and minerals, and it has the companies and people with the skill to extract these natural resources efficiently and cleanly,” Hinde said. “What the country, and its mining industry, needs is to adopt those more streamlined permitting processes that are already being applied by the world’s leading mining nations.”
Join the conversation as a VIP Member