and unhealthy situation that needs to be
changed.” He sees the combination of tight
export caps and high world demand for
rare-earth compounds as the impetus that
can drive that change.
Yan adds that beginning in the late 1980s,
when China became the world’s largest
producer of rare-earth materials, it almost
single-handedly drove down rare-earth pric-
es by as much as 90%. Much of that rapid
price drop, according to Yan, was a result of
unlicensed factories that pump toxic waste
into rivers to reduce their operating costs.
“It is unfair for the rest of the world to be us-
ing cheap, Chinese-made rare-earth materi-
als at a prohibitive cost to China’s natural
environment,” he says. “In the end, it’s part
of the world’s environment too.”
While Chinese officials have been con-
sidering the environmental cost of poor
mining practices and drafting stringent
regulations to curb those activities, in-
dustry representatives in the U.S. have
been trying to draw lawmakers’ attention
to China’s monopoly and the impending
effects of this monopoly on U. S. science,
technology, and commerce.
“The news from China should serve as
a huge red flag for U. S. government offi-
cials,” says Edward Richardson, president
of U. S. Magnetic Materials Association
(USMMA), a trade group representing U. S.
producers of high-performance magnets.
Richardson, who is also vice president of
Thomas & Skinner, an Indianapolis-based
manufacturer of aluminum-nickel-cobalt
alloy (Alnico) magnets, adds that “if the
U.S. is to become a leader in clean-energy
technology, it needs a reliable domestic
rare-earths supply chain.”
Several groups have been working
recently to spread the word and impress
upon legislators the critical nature of the
problem. According to Jeffery A. Green,
president of J. A. Green & Co., an advocacy
group working with USMMA, the groups’
efforts are starting to pay off. “We’re now
seeing a lot of political momentum sur-
rounding this issue,” Green says.
For example, at a Washington, D.C., rare-
earth conference in March, the Department
of Energy’s David B. Sandalow, assistant
secretary of energy for policy and interna-
tional affairs, announced DOE’s intention
to develop its first-ever strategic plan for
addressing the role of rare-earth and other
strategic materials in clean-energy tech-
nologies. “There’s no reason to panic,” San-
dalow said, “but every reason to be smart
and serious as we plan for growing global de-
mand for products that contain rare-earth
metals.” DOE later released a public request
for information to help develop that plan.
AT AROUND THE SAME TIME, the Gov-
ernment Accountability Office, the inves-
tigative arm of Congress, prepared a report
on rare-earth materials in the defense
supply chain and presented it to the Armed
Services Committees of the Senate and
Technology & Resource Transformation
(RESTAR T) Act, which aims to revital-
ize the U. S. rare-earth industry. Sen. Lisa
Murkowski (R-Alaska) later introduced
similar legislation in the Senate.
RARE-EARTH SUPPLY AND DEMAND
China’s increasing demand for its own rare-earth materials is predicted to drive
production in other countries
Thousands of metric tons
200
250 Supply
■ China ■ Global
Thousands of metric tons
200
250
Demand
■ China ■ Global
150
150
100
100
50
50
SOURCE: Dudley Kingsnorth/Industrial Minerals Co. of Australia
0
2005 06 07 08 09 10 11 12 13 14 15 2005 06 07 08 09 10 11 12 13 14 15
0
House of Representatives. The GAO report
affirmed that rare-earth materials play
important roles in numerous defense technologies, including radar, missile-guidance
systems, lasers, and night vision equipment. The Department of Defense is now
conducting an internal assessment and is
expected to devise strategies to protect
against rare-earth supply interruptions.
The report is scheduled to be completed
next month.
In addition to the DOE and DOD activities, the House Committee on Science &
Technology convened a hearing in March
at which rare-earth experts including
Gschneidner of Ames Lab and Smith of
Molycorp testified about the threat of a
rare-earth supply shortage in the U.S. After
the hearing, Rep. Mike Coffman (R-Colo.)
introduced the Rare Earths Supply-Chain
20,000 metric tons of rare-earth oxides
annually by 2012. But that’s not all. In ad-
dition to resuming mining and milling
operations and producing high-purity
oxides at the now mostly dormant mine,
Molycorp aims to reduce the oxides to met-
als, convert the metals to rare-earth alloys,
and produce high-end permanent magnets.
All in all, he says, the plan is to completely
shore up the “mining-to-magnets manu-
facturing supply chain.”
“Mostly dormant” describes the state of
affairs at Mountain Pass since 2002. Min-
ing and processing operations were put on
hold at that time, but not long thereafter,
company scientists and engineers began
retooling their processing techniques with
an eye toward eventually reopening a new
and improved mining facility. The aim was
to reduce production costs, cut back on
“Today, nearly 100% of the world’s rare-earth metals and
more than 94% of rare-earth oxides come from China.”
