Great news: China hoarding rare-earth metals needed for “green” energy

posted at 10:40 am on June 20, 2011 by Ed Morrissey

Over the past few weeks, I’ve written about the risks of dependence on foreign resources that will come with the “green” energy revolution, at least in the direction favored by the Obama administration.  Elements required for critical components such as lithium batteries for electric cars cannot be found in massive quantities within the US, and a number of the rare-earth elements needed for these components are mainly found in China — which can be fairly described as an economic competitor of the US at the very least.  Today’s report from the Financial Times should drive that point home and send up red flags on “green” mandates, both literally and figuratively:

Prices of some rare earth metals have doubled in just three weeks amid heavy stockpiling in China that has raised fears over global supplies.

China produces more than 90 per cent of the world’s rare earths, 17 elements used in hybrid cars, fluorescent lights and many high-tech applications. …

Japan and the US, the world’s biggest importers of rare earths, have repeatedly voiced concerns to China, while complaints from industrial users of rare earths have been growing. Last year, China cut their exports by 40 per cent and temporarily banned exports to Japan during a political dispute.

American policymakers should keep China’s treatment of Japan in mind.  By making our economy entirely dependent on rare-earth imports from China, the US will be handing Beijing a big, fat veto on American policy, especially in — but not necessarily limited to — foreign policy.  Politicians will scoff, but no one wants to be in Congress or the White House when a trade dispute (or anything else) sends the country into recession.  You can ask Democrats in 2010 about that, or Republicans in 2008, for that matter. China understands how to wield its power, and it won’t shy away from doing so with the United States.

Ironically, one of the top political rationales to use government mandates and influence to convert personal transportation onto the electrical grid is the notion of energy independence.  That’s a fallacy at the most basic level, as there is no domestic energy resource abundant and reliable enough to handle the electrical demand from adding millions of cars to the electrical grid except for fossil fuels and nuclear power, none of which environmental activists want to allow.  But with China in control on the manufacturing side, we can’t even be assured the ability to build the machines in the first place, let alone fuel them, unless we agree to give China a veto on American policy.

People complain about the autocratic and arbitrary nature of OPEC and the greed of oil speculators, but at least that energy infrastructure has some built-in safeguards.  First, that market does not have a shortage of resources, nor does it have a shortage of producers.  The US is sitting on tens of billions of barrels of oil (perhaps hundreds of billions) that we could access if we had the political will to do so, plus almost unlimited natural gas, coal, and so on.  Speculators affect the market somewhat disproportionately in part because the US refuses to access its own reserves, creating a mild, artificial scarcity.  Rare-earth elements really are scarce, and they are mainly controlled by only one producer nation.  OPEC will look like a country club in comparison to China’s central control of critical “green” energy elements.

GE and other corporations looking to cash in on the Obama administration’s green-energy policies want the White House to take action to guarantee reliable domestic sources of rare-earth elements.  Unfortunately, we have no real proven reserves of these elements in the US, so it will take the kind of exploration and mining that the EPA is attempting to stop in coal and natural gas to find it — if it exists.  To produce it on the scale needed if it indeed exists at all, we would have to roll back decades of EPA obstacles to American energy production.  As the Financial Times noted, the only reason China has its proven reserves is that Beijing imposes only “lax environmental standards” to make rare-earth mining cheap enough to be profitable.

Why not do that for the energy resources we already know we have — and at least with natural gas, will produce a clean energy that can power the American economy for centuries while we work on other energy forms for the future?  Isn’t that smarter than signing up to be a puppet of Beijing?

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The Chinese know how to squeeze a sucker.

NotCoach on June 20, 2011 at 10:43 AM

That’s a fallacy at the most basic level

Well, we don’t make policy based upon logic, Ed….Dems make policy on *feelings*, baby….as long as it feels right, then it’s just gotta be right, don’t it?

ted c on June 20, 2011 at 10:44 AM

Who doesn’t he bow to????

Oil Can on June 20, 2011 at 10:44 AM

Gee, didn’t Glenn Beck warn about this many moons ago? That crazy rodeo clown.

publiuspen on June 20, 2011 at 10:44 AM

America has plenty of rare earth deposits.

We’re just not allowed to mine for them, same way we’re not allowed to tap our massive oil and natural gas reserves.

Rebar on June 20, 2011 at 10:45 AM

No, no, no. You line up an economic advantage then pay off the pols and lobby for things to go your way.

Or….if you are the gov’t, you manage it just like you have energy policy to date with petroleum and let China run wild like OPEC does.

IlikedAUH2O on June 20, 2011 at 10:46 AM

Our companies are not competing on the same turf as foreign companies…and you can bet the mining of those material are not union mine workers following U.S. EPA rules…

right2bright on June 20, 2011 at 10:47 AM

Isn’t that smarter than signing up to be a puppet of Beijing?

That’s ok, PBHO just signed an executive order to start stockpiling wind and sunlight for our future alternative energy needs.

Bishop on June 20, 2011 at 10:47 AM

America has plenty of rare earth deposits.

We’re just not allowed to mine for them, same way we’re not allowed to tap our massive oil and natural gas reserves.

Rebar on June 20, 2011 at 10:45 AM

Hey, get out of my head…it hurrrtzzz.

right2bright on June 20, 2011 at 10:47 AM

Wake up america!

Refusing to access own resources….cutting off own nose and all that

Thanks tree huggers
/

cmsinaz on June 20, 2011 at 10:48 AM

Can we just ship our environmentalists to China? Assuming they don’t get shot on sight (which they would), that would level the playing field!!!!!!

search4truth on June 20, 2011 at 10:49 AM

America has plenty of rare earth deposits.

We’re just not allowed to mine for them, same way we’re not allowed to tap our massive oil and natural gas reserves.

Rebar on June 20, 2011 at 10:45 AM

Audio companies were using samarium and neodymium magnets as far back as the late 80′s, long before China ever dug in the ground for it. It came out of the USA and it is still here.

roy_batty on June 20, 2011 at 10:51 AM

Help us Donald Trump, you’re our only hope

Roy Rogers on June 20, 2011 at 10:51 AM

Rebar is correct. The US used to produce a lot of rare earth elements, but those efforts have been shut down due to environmental concerns.

See the USGS report.

Keep in mind, to get the rare earth metals needed for these “green” technologies requires digging up tons of earth. Not only the mining operations are environmentally unfriendly, purifying the metals is another environmental nightmare. But that’s not something the “green energy” people even consider.

taznar on June 20, 2011 at 10:53 AM

Have the Israelis finished that sand-battery yet?

Count to 10 on June 20, 2011 at 10:55 AM

They have learned that liberal nitwits in the U.S. need to feel subservient to some foreign power in order to feel good about themselves, and they wanted to help.

Jaibones on June 20, 2011 at 10:57 AM

Any number of those rare earths could be mined here; EPA regulations prevent it.

michaelo on June 20, 2011 at 10:57 AM

By any measure, technology has made fossil fuels far more environmentally safe than any of the “green Fuels”. Add nuclear to the mix and we have abundant supplies of energy without harm to the planet. Of course that won’t get us back to the Medieval Lifestyle that professional environmentalists want.

cartooner on June 20, 2011 at 11:00 AM

Energy Independence anyone?

gullxn on June 20, 2011 at 11:01 AM

Somehow Obama will hold this up as an example of how great China is, just like those high-speed trains, and how we should be more like them. Time for another Krugman column.

And what will this do to the price of Priuses and light bulbs? That’ll hit liberals in their wallets.

Drained Brain on June 20, 2011 at 11:01 AM

Who doesn’t he bow to????

Oil Can on June 20, 2011 at 10:44 AM

The Queen of England.

Dear Liar employed Anita Dunn, one of who’s two favorite philosophers is Mao. Someone in the White House staff thought it would be a good idea to have a Mao Christmas tree ornament. What is up with this desire to chain America to communist China?

rbj on June 20, 2011 at 11:02 AM

Get ready for it,with this crew and an out of control EPA.
Which do you prefer Mandarin,Hunan,or Cantonese style cooking?

docflash on June 20, 2011 at 11:03 AM

Ever seen what most solar panels are made of? The Japanese can count themselves lucky that a nuclear plant rather than a solar-array field was hit by that tsunami.

Bishop on June 20, 2011 at 11:04 AM

Yeah? How’s their supply of Unobtanium?

John the Libertarian on June 20, 2011 at 11:05 AM

The USGS apparenty says the US has the third largest reserve of rare earths in the word, just not much of a production pipeline.

Count to 10 on June 20, 2011 at 11:06 AM

Any number of those rare earths could be mined here; EPA regulations prevent it.

michaelo on June 20, 2011 at 10:57 AM

EPA rules don’t prevent extraction, they mandate cleaning up when the extremely toxic byproducts aren’t taken care of. Cleaning up radioactive waste like the kind that spilled in relation to the Mohave mine in the US is very expensive. The higher prices mean that US production is once again economically viable and there are a number of other sources outside of the US and China which will be available in coming years.

The company that owns the US mine, Molycorp, is currently planning to resume production and is estimates that it can produce a quarter of US needs with the potential to meet half consumption. That is one mine… there is another mine coming online in Wyoming.

lexhamfox on June 20, 2011 at 11:10 AM

barack needs to brush up on his bowing and grovelling. Obviously his talent for butt-kissing is slipping.

DuctTapeMyBrain on June 20, 2011 at 11:14 AM

I am more worried these vessels containing our very human ingredients are the elements that are most at risk of becoming rare.

fourdeucer on June 20, 2011 at 11:19 AM

Back in the days when I worked* in the Defense and Aerospace industry, one of the design criteria for military gear was that NO critical component could be sourced from outside the USA. This was a logical way to keep our critical systems and their supporting domestic miners, suppliers and manufacturers strong and free from disruption by enemies or “friends” with a different agenda.

What happened???

* OK, it was over 40 years ago….but still!!!….

landlines on June 20, 2011 at 11:19 AM

the US will be handing Beijing a big, fat veto on American policy

Great. Start with CFLs.

John Deaux on June 20, 2011 at 11:21 AM

That pic of Obama, the President of the United States, bowing to Hu Jintao…oh man.

Hu Jintao looked him straight in the eye -as Obama should have done- and yet Obama bowed. Hu Jintao did not bow. Why?

My conclusion is that Obama has no idea what he’s doing. I’m reminded of that toast with the queen. He’s just in over his head. Embarrassing.

visions on June 20, 2011 at 11:25 AM

“rare-earth elements needed for these components are mainly found in China “

Ed, I’d recommend you reread the article and look a little deeper into the issue.

“China produces more than 90 per cent of the world’s rare earths, 17 elements used in hybrid cars…”

China produces 90% of the REM, it is not the sole and only source thereof. RME can be found around the globe. Please stop repeating this false idea that RME are only available from China. It’s only because China is more willing to allow mining and industrial production of such materials at a cheaper cost than that the West.

Please read up on this.

chimney sweep on June 20, 2011 at 11:26 AM

Prices of some rare earth metals have doubled in just three weeks amid heavy stockpiling in China that has raised fears over global supplies.

-
We lost a DOD contract at the last second a few years back… (after first spending tons in research and even buying some specialized assembly machines)… because China bought the only supplier of a key rare element needed in the battery.
-
I always thought that the timing exposed it as a move against our military capability… and also as a slick move to let US spend the cash before pulling the rug out.
-
Makes me wonder if something big is in the works for later this year… and how long till this rare earths issue shuts something down at work.
-
Hell… we had a delayed project 2 years ago because the Prius switching to lithium was eating up all available cell production…
-

RalphyBoy on June 20, 2011 at 11:26 AM

I am wondering how many more years will we ponder what China is about???

Power, control and money – through manipulation, is their M.O.

They are also some pretty smart people driving true knowledge; who dont care about political correctness or “My Gay Uncle Bob” homework assignments.

Odie1941 on June 20, 2011 at 11:29 AM

A true story:

Several decades ago I was assigned as the technical adviser to a group of hot-shot attorneys who were working on a very complex set of IPO documents. The IPO was to take public an existing integrated mining-milling-refining operation.

The attorneys were the brightest young lawyers from two offices in large cities. It was the dead of winter in the middle of nowhere, and it was very, very cold. In fact, the weather was miserable.

I vividly remember one morning when the lawyers were complaining bitterly about the weather, and the lack of a decent large hotel and night-life, while drinking their non-Starbucks coffee.

At the start of document review that morning the first question they needed answered was one that they indicated had been bothering them for two days. They wanted to know why we didn’t move the entire operation to somewhere further south, where the weather was more hospitable. THEY WERE SERIOUS. They knew public-offerings law but had absolutely no concept about ore deposits.

It’s the lawyers of that age who are now running the agencies within our government. Do not ever think that the concept of location or viability of resources enters their equation. It is too alien to their idea of existence, and a problem for other people to confront and solve.

Yoop on June 20, 2011 at 11:32 AM

I agree with several of the commenters above. The US is (depending on how you rank it) second or third in the world in terms of mine-able deposits. And those are the ones currently discovered. The fact that we’ve chosen not to mine is problematic, but it’s worse to think of the fact that we’ve killed most of the processing business here as well.

We could be in the same boat as oil very soon. We can’t refine what we get fast enough, and we can’t build new processing, so we have to look for other solutions. None of this is fun, and all of this is dangerous for our economic independence.

jdfister on June 20, 2011 at 11:38 AM

Green turns out to be Red? Who would have guessed?

Pablo on June 20, 2011 at 11:45 AM

Brazil, China, we will be your best customer!!

Koa on June 20, 2011 at 11:46 AM

Until one has actually worked on a mineral deposit, from the exploration and discovery stage through the permitting to production stage, it is impossible to understand the totality of the obstacles presented by the government and the public.

Then one must consider all of the governmental regulations that must be satisfied to keep the resource in production.

REMs and PGEs are even more difficult, especially if metallic sulfides are involved. People don’t want the operations in their back yard, or the elements in their water, or in their air. The government is set up to help them block such operations.

I am actually stunned when I hear of any new mine starting production in the US in this day and age.

Yoop on June 20, 2011 at 11:56 AM

Hence, this is not an issue for panic.

scrubjay on June 20, 2011 at 11:08 AM

I don’t think anyone is panicking so long as we fire Don Quixote in 2012 and replace him with someone who has the guts to refudiate his energy policies.

rwenger43 on June 20, 2011 at 12:05 PM

This is why I have suspected that the Dems have been telling their constituents (enivronmentalists) to push for green energy. But it could just as easy be they are pushing for this and that is why there are some Chinese nationals funneling money through other means to a Democrat campaign.

jeffn21 on June 20, 2011 at 12:06 PM

Rebar is correct. The US used to produce a lot of rare earth elements, but those efforts have been shut down due to environmental concerns.

taznar on June 20, 2011 at 10:53 AM

Just this last weekend a US company announced it was ramping up production in the US. They also do the processing and refinement…. the only ones in the world that do the entire process. The mine that closed in CA was closed for complete modernization and upgrading. They are resuming production next year.

lexhamfox on June 20, 2011 at 12:15 PM

FYI, the radioactivity associated with many REE deposits comes from thorium, which is potentially valuable as a nuclear fuel. Since thorium is currently not used for anything (it was once used in gas mantles in small amounts) its not extracted from the ore and remains in the tailings. The upside is, if we ever do decide to use it as a fuel, we can just go back and reprocess those tailings.

LarryD on June 20, 2011 at 12:24 PM

Great news: China hoarding rare-earth metals needed for “green” energy

I knew that for 2 years now. I read about that in this book. and this book.

mizflame98 on June 20, 2011 at 12:42 PM

DUH……..CHINA……..WINNING!!!

Of course they’ll need the raw materials to sell us Electricity from their Free Trade Zones (like Idaho, soon to be Ohio, etc.).

PappyD61 on June 20, 2011 at 12:47 PM

America has plenty of rare earth deposits.

We’re just not allowed to mine for them, same way we’re not allowed to tap our massive oil and natural gas reserves.

Rebar on June 20, 2011 at 10:45 AM

Not just the US, but many other countries have large rare-earth deposits. China has cornered the market by 1) having no environmental or labor standards making China’s REM mines cheaper, 2) buying REM mininig companies in other countries and shutting down the mines, and failing 1 & 2, 3) using environmental lawsuits/petitions/whatever to shut down the remainder (which is how our mines were closed).

End result, China has something like 95% of REM production but no where near that in reserves. Just as well, they’re exhausting them now and at any rate China’s need for our food will be more accute than our need for their REM’s.

jarodea on June 20, 2011 at 12:54 PM

Here’s one of the many links if you Google “project 60, Idaho”.

http://www.thetreeofliberty.com/vb/showthread.php?t=127955

PappyD61 on June 20, 2011 at 1:00 PM

They are resuming production next year.

lexhamfox on June 20, 2011 at 12:15 PM

That sounds encouraging. I’m not going to hold my breath for any new mining operations though.

taznar on June 20, 2011 at 1:24 PM

Governor Palin ahead of the Curve on Concerns of China and Rare Earth Metals (in OCT of 2010)

Ed Morrissey has a post up at HotAir today discussing China’s hoarding of rare earth metals. Rare earth metals are needed for green energies such as the batteries in electric cars and in CFL light bulbs that will be mandated in the coming years, as well as in the cell phones and other technologies. Morrissey writes:……..

…..This news is something that Governor Palin warned about in October of 2010 in a Facebook post, where she wrote (emphasis mine):

Some of the countries we’re now reliant upon and will soon be beholden to can easily use energy and mineral supplies as a weapon against us.

The solution? Simply, please don’t elect politicians who cast votes that lock up our plentiful supplies. Please consider the case of China bending us over a barrel as it develops rare earth minerals while we ban mining. Please consider Venezuela and Russia and Saudi Arabia and Brazil (as we subsidize their off-shore drilling) and all other energy-producing countries as the Left locks up ANWR, NPR-A, and other American lands that are teeming with our own needed energy supplies.

“Drill, baby, drill and mine, baby, mine.” Yep, the mantra may be mocked by the Democrats, but serious consequences ensue when we let the Left make us rely on foreign countries to feed us energy. The joke is on us if they win.

blockquote>

http://conservatives4palin.com/2011/06/governor-palin-ahead-of-the-curve-on-concerns-of-china-and-rare-earth-metals.html

this is a rebuttle to those antipalin people that think we support Palin for no reason. If you read and listen to her policies and positions she is far ahead of most people.

unseen on June 20, 2011 at 1:25 PM

Hence, this is not an issue for panic.

scrubjay on June 20, 2011 at 11:08 AM

Yeah, no reason to plan for the future…/sarc

right2bright on June 20, 2011 at 1:34 PM

Japan and the US, the world’s biggest importers of rare earths, have repeatedly voiced concerns to China, while complaints from industrial users of rare earths have been growing. Last year, China cut their exports by 40 per cent and temporarily banned exports to Japan during a political dispute.

“WAAAAAAAAH! Can we have some rare earth materials, pretty please?”

Ward Cleaver on June 20, 2011 at 1:42 PM

Rare-Earth elements in the USA:

Rare-Earth Elements Not So Rare in USA

My Visit to An American Rare Earth Metals Mine

All we need is the will, and for the Marxist enviro-progs to stand down.

slickwillie2001 on June 20, 2011 at 1:44 PM

This is what’s infuriating about this economy. We’re rich! We have resources up the ying-yang! Everything! Oil, coal, gas, rare-earths, hydro, wind, wood, gold, and silver. to say nothing of the food we’d produce if we were allowed to irrigate.
I’d love to see a politician talk about all the wealth and opportunity the eco-luddites are denying us!

Iblis on June 20, 2011 at 1:50 PM

The government is set up to help them block such operations.

I am actually stunned when I hear of any new mine starting production in the US in this day and age.

Yoop on June 20, 2011 at 11:56 AM

I knew you’d be here ;)

The Molycorp mine in CA.
I am betting probably the ONLY reason this has been given the go ahead, based on their past, is bcs it is desperately needed.
Places with these types of ore deposits are usually beautiful mountainous wilderness that enviros love to ‘protect’ from all human influence.

But I predict that it ain’t over for these mines companies.
A new assualt will surely come along.
Bcs the enviros make lots of $$$ suing these companies.
And there is no reason for them to stop.
Bcs they can still get cell phone & iPads from China.

Badger40 on June 20, 2011 at 1:50 PM

Wyoming deposit info.

So imagine the boon to this dead area of WY.
Bcs I’ve been there a lot.
And there’s not much there.

Badger40 on June 20, 2011 at 1:57 PM

Here’s another article about the Bear Lodge deposit.And lookee-it’s evidently on National Forest Service Land.

Badger40 on June 20, 2011 at 2:09 PM

Get ready for it,with this crew and an out of control EPA.
Which do you prefer Mandarin,Hunan,or Cantonese style cooking?

docflash on June 20, 2011 at 11:03 AM

Szechuan, the hot and spicy stuff. Mmmmm…

Ward Cleaver on June 20, 2011 at 2:21 PM

At what point is it politically correct to say that the Enviro-Marxists in the US are working with the Chineese-Marxist-Communists in an effort to destroy the USA?

Freddy on June 20, 2011 at 2:57 PM

Rare earth

mrt721 on June 20, 2011 at 2:58 PM

Badger40 on June 20, 2011 at 1:50 PM

My nose and my memory tell me that, if one had the grubstake and some younger legs, prospecting in eastern Nevada and southwestern Utah would prove to be very productive.

Yoop on June 20, 2011 at 4:27 PM

Yep, and Obama and the EPA will not allow us to seek them here in our own Country. Anybody ever wonder who’s side Obama is on? I know, Soros and the Socialist one world government side.

old war horse on June 20, 2011 at 6:38 PM