When it comes to the mining and processing of rare earths, and other strategically vital minerals too, the U.S. needs to get a move on. Much of the green tape ...

The dangers of relying on China as the dominant supplier and processor of rare earths have long been obvious, but with luck the recent panic triggered by Beijing’s squeeze on rare earth exports sounded an alarm too loud to be ignored.

As I noted in June:

Rare earths are not particularly rare, but China has established a dominant position and advanced know-how in processing them (separating them from the rock in which they are embedded). Rare earths are more widely used in electric vehicles (EVs) than conventional cars, but they are used in the latter too. Besides, according to the WSJ, there is a limit to how much production car companies can switch away from EVs because of federal fuel-economy standards. Those can surely be scrapped or suspended, but the underlying problem would still remain.

This is not just a vulnerability for the auto sector. For example, the motors that power drones typically require rare earths.

Just how dominant is China in this area?

Writing last year, I quoted from a 2024 report by the U.S. Government Accountability Office (GAO) in which it reported how American rare earth mining capacity has “waned” over the past 40 years, in no small part because of “the emergence of lower-cost suppliers in other nations, such as China.”

Between 2019 and 2022, the U.S. imported more than 95 percent of the total rare earths it consumed, much of which was from China. But, as Germany discovered in the case of Russian natural gas, “cheap” may be more expensive than it seems.

So it is good news that the Fluor Corporation has (Yahoo Finance reports) confirmed that large rare earth element deposits at Ramaco Resources’ Brook Mine in Wyoming are not only abundant, but economically feasible. As noted above, rare earths are not particularly rare, but finding them in the “right” concentration in the rock in which they are embedded is (or has been) more unusual.

YahooFinance!:

Fluor’s report projects that the mine will produce 1,242 tons annually of oxides, including high-value minerals such as dysprosium, neodymium, and scandium, which are critical to various advanced technologies. Specifically, dysprosium and neodymium have unusual magnetic properties that make them perfect for high-performance magnets in electric vehicles and various electronics, while scandium’s most important applications involve its use as an alloy for aluminum.

The mine reportedly has the potential to support 3-5 percent of U.S. total permanent magnet demand.

Mine, baby, mine.

As history demonstrates, the prospect of making money out of a resource increases the chance that it will be found. It was thus encouraging that Ramaco’s stock jumped from $13 to $16.72 on the news (it’s since drifted down a little).

Also this week (via MSBC):

The Defense Department will become the largest shareholder in rare earth miner MP Materials after agreeing to buy $400 million of its preferred stock, the company said Thursday.

MP Materials owns the only operational rare earth mine in the U.S. at Mountain Pass, California, about 60 miles outside Las Vegas. Proceeds from the Pentagon investment will be used to expand MP’s rare earths processing capacity and magnet production, the company said.

Shares of MP Materials soared about 50% to close at $45.23. Its market capitalization grew to $7.4 billion, an increase of about $2.5 billion from the previous trading session.

This is a rare case where state involvement in an industry is welcome, a topic to return to later.

Encouragingly there was also a potentially interesting rare earth find at Halleck Creek in Wyoming last year. The mine is owned by American Rare Earths, an Australian company despite the name. Its stock is up 16 percent over the past two days.

Mining is, as the MSNBC report reminds us, not the end of the story. MP Materials has some processing capacity and plans on expanding it. That’s the way to go. If rare earths are mined here, but still have to be processed in China, Beijing’s chokehold remains.

Process, baby, process.

Ramaco’s CEO has said that he wants to develop a vertically integrated supply chain, addressing both extraction and processing within the United States, and other U.S. companies are going the same route.

However, processing rare earths is a messy business. One reason that China was able to undercut Western producers has been its more, uh, relaxed environmental standards.

Keith Bradsher, writing for the New York Times:

Achieving dominance in rare earths came with a heavy cost for China, which largely tolerated severe environmental damage for many years. The industrialized world, by contrast, had tighter regulations and stopped accepting even limited environmental harm from the industry as far back as the 1990s, when rare earth mines and processing centers closed elsewhere.

And the environmental damage is hard to miss. For example:

An artificial lake of sludge known as the Weikuang Dam, four square miles in size, holds the waste left over after metals are extracted from mined ore. During the winter and spring, the sludge dries out. The dust that then blows off the lake is contaminated with lead, cadmium and other heavy metals, including traces of radioactive thorium, according to technical papers by Chinese scholars.

Perhaps it’s worth mentioning that rare earths are needed not only in EVs, but in wind turbines too. The climatists’ gods have feet of toxic sludge.

Beijing has been trying to clean things up a bit, but:

The Chinese authorities have increasingly censored discussions of rare earth industry pollution. State media reported a decade ago that thousands of acres of grasslands near Baotou had been closed to livestock grazing after sheep and goats had been fatally poisoned by dust from the rare earth industry. But practically no mention of that incident can be found online now inside China.

Processing clean rare earths more cleanly than the Chinese is something of a low bar, an objective that should be easily feasible, and by a good margin. In an intriguing article on rare earths published in early April for Spectator World, Teresa Mull outlined some promising-sounding developments in this area. She also added this:

REEs [the more precise term for rare earths] have been found in clay deposits in and around seams of coal. There is an “enormous cache” of rare earth elements within coal ash, University of Texas scientists have found, and the supply “contains enough rare earth elements to significantly bolster the national supply without any new mining.”

Let’s see. But, for the moment, when it comes to the U.S. bringing home the mining and processing of rare earths (an area in which this country once led the world) is a matter of urgency.

Will rare earths mined and processed in America be more expensive than those coming out of or via China? In all likelihood, yes.

Too bad. Adam Smith recognized that economic efficiency must take second place to strategic necessity, writing that “defense . . . is of much more importance than opulence.” It is also more important than exaggerated environmental sensitivity. There is no need to sink to Chinese levels (far from it), but when it comes to the mining and processing of rare earths, and other strategically vital minerals too, the U.S. needs to get a move on. Much of the green tape must go.