Chinese monopoly leads to reopening of U.S. rare earth mine

Domestic production of rare earth metals will restart in 2011. The rare earth metals mine run by Molycorp had closed six years ago as Chinese production drove down prices. However, China has started to manipulate supplies, which has brought on prices for rare earth metals to rise dramatically.

The Molycorp Mountain Pass mine

The richest source of rare earth elements in the world is the Mountain Pass, California mine that is dormant and owned by Molycorp. Molycorp’s Mountain Pass mine closed over environmental concerns and overwhelming competition from China. China now has a monopoly on rare earth metals since Mountain Pass closed. The United States national security and economy is in danger with this. Permits and financing were given to Molycorp now. It could be starting to produce once again. The company plans to produce 3,000 tons of rare earth metals in 2011. This will all come from ore that the company got before closing the mine. There is a different expectation for 2012. About 20,000 tons might be produced.

Monopoly in China

The 2010 global demand for rare earth metals could be measured already. 125,000 tons was the amount. China controls 97 percent of the world’s rare earth metals production. Wind turbines, electric vehicle batteries, electronic gadgets and military technology all use rare earth metals. In 2010, China appeared to be using its rare earths monopoly for geopolitical leverage. In Europe, Japan and the U.S., High tech manufacturing was stopped for a bit. This was because rare earth metals were cut by more than 70 percent. Taxes, for domestic manufacturers, were reduced on rare earth metals in China. Rare earth metals went up in price. There was a 40 percent increase. To save costs, many companies are moving to China now. They’re clean-energy technology companies.

Dreaming about a green power economic climate

Sumitomo Corp of Japan invested $130 million in Molycorp to guarantee a supply of rare earth metals for seven years. Within 18 months, manufacturing is expected by Molycorp to increase to 40,000 tons. In the U.S., there aren’t any businesses that can use rare earth metals in a clean power economy in order to create emerging technologies like the neodymium magnets used in wind turbines. The bastnasite ore from the Mountain Pass mine will be used in the partnership between Molycorp and Hitachi. The U.S. will then start to produce neodymium magnets. Currently only 10 companies located in Germany, Japan and China are licensed to make neodymium magnets.

Citations

The Guardian

guardian.co.uk/environment/2010/dec/26/rare-earth-metals-us

MIT Technology Review

technologyreview.com/energy/26980/page2/

Miami Herald

miamiherald.com/2010/12/27/1989540/weaning-ourselves-from-a-china.html