Tag Archives: supply chains for rare-earth elements

Good News From The Senate?

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On Friday, The Daily Caller reported that Senators Tom Cotton and Mark Kelly have sponsored a bill that aims to end U.S. reliance on rare-earth metals sourced from and produced in China.

The article reports:

The Restoring Essential Energy and Security Holdings Onshore for Rare Earths (REEShore) Act would prevent supply disruptions and bolster domestic production of the minerals, according to Sens. Tom Cotton and Mark Kelly, the bill’s sponsors. They said the legislation is important for American national security and development of advanced technologies.

“The Chinese Communist Party has a chokehold on global rare-earth element supplies, which are used in everything from batteries to fighter jets,” Cotton said in a statement. “Ending America’s dependence on the CCP for extraction and processing of these elements is critical to winning the strategic competition against China and protecting our national security.”

The REEShore Act would order the Department of Defense and Department of the Interior to create a national stockpile of rare-earth metals by 2025, according to the announcement. The Department of Energy controls a strategic reserve of crude oil, which was created in the 1970s.

The article concludes:

On Thursday, the Congressional Western Caucus and House Natural Resources Republicans hosted a roundtable on the implications of U.S. mining policy. Several House Republicans and business leaders explained the importance of bolstering the American mining industry.

“As global demand is growing to meet the needs of technological development, especially with minerals needed for alternative sources of energy, it’s time we start responsibly sourcing them here in the United States instead of relying on foreign, and often hostile, nations for them,” said Republican Minnesota Rep. Pete Stauber, the ranking member of the House Natural Resources Subcommittee on Energy and Mineral Resources.

In November I reported that Samsung is building a facility in Texas to manufacture computer chips (article here). In order to run that factory, they will need a dependable supply of rare-earth minerals. Securing that supply from political or diplomatic interruptions is a really good idea. Hopefully this is one idea both political parties can agree on.

 

Breaking Up A Monopoly In The Supply Chain

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Yesterday wattsupwiththat posted an article about the worldwide chip shortage.

The article reports:

Prompted by a worldwide chip shortage already impacting automobile production, President Biden in February signed an executive order directing a 100-day broad review of supply chains for critical materials for semiconductors and large-capacity batteries, including rare-earth elements. It builds on analyses, reports and executive orders initiated several years ago by the Trump Administration.

The stark truth that this review should highlight is that the U.S. and its Western allies have been left behind at the starting gate in a race only China seems to have realized was taking place. 

The Chinese began building their now-dominant supply chain decades ago. The U.S. has been 100% net import reliant on rare-earth elements, with 80 percent of those imports sourced from China.

Technology metals consultant Jack Lipton has described five steps in a total rare-earth supply chain. Mining comes first, followed by extraction of the rare-earths from mining concentrates and preparation of clean, pre-PLS (pregnant leach solution) mixed rare-earths products. (Actually, there is another step that precedes mining, at least in Western countries – gaining permission to mine – and it is often the most difficult and most time-consuming step of all.)

The article continues:

In a four-part series addressing Chinese dominance in the rare-earths industry, Jamil Hijazi and James Kennedy explained that China built its rare-earth industry as part of a carefully designed nationalistic strategy for world domination, one not motivated by the quest for private profits.

Now, with their market share dominance, “China uses opaque subsidies to eliminate any profit potential for competitors. No profit potential, no competitors, China’s metallurgical monopoly remains secure and uncontested.” Even more daunting, the lack of non-Chinese processing, refining and metallurgical capacity means the world sells China its low value ore-concentrate and China sells back much higher value end products.

Menell (TechMet Chairman and CEO Brian Menell ) points out that China’s rare-earths dominance is “the result of decades of successful central planning, to secure the minerals required to develop technologies across strategic sectors such as energy, auto and defense.”

President Biden’s executive order supporting the concept of resilient, diverse, secure supply chains is certainly admirable. However, Menell says, the United States must make the supply of critical minerals a central part of both domestic and foreign policy.

Menell notes that the Biden Administration also needs to educate the American public that the mining and processing of critical materials can be done with much lower environmental impacts by American companies than by Chinese firms, and that America’s economic well-being depends heavily on an integrated rare-earths value chain.

As the world depends more and more on various computer chips, this is going to become more of a problem. China (as usual) has played the long game while the west ignored its growing dependence on rare-earth metals. America needs to act on this problem quickly, but with an eye to a long-term solution rather than a quick fix.