Several events that took place in mid-March are significant for readers, but they must be reported in two separate articles, this month and June.

A two-day meeting sponsored by the Technology and Rare Earth Metals Center, which is part of the Institute for the Analysis of Global Security, occurred concurrently with a World Trade Organization denial of appeal in a case against China brought by the U.S., Japan and EU nations involving rare earth materials. In macro-terms this is of great importance to U.S. industry. But, first, some background is relevant for understanding.

World industry consumes about 33,000 tons of rare-earth elements (REE) annually, and China mines and sells 31,130 tons of that. Unregulated mining can be devastating to the environment, and it has devastated China terribly. The U.S. had been the world’s leading REE producer in the 1980s and 1990s but has stopped producing.

China recently embargoed exports of REE, which resulted in inflated global prices while reducing China’s domestic fabrication cost of strategic materials. The world’s top REE producer is China’s Baotou Steel, which is building a 200,000-ton stockpile. This has all occurred with the U.S. having 13% of identified REE reserves but no refining capacity. Domestic mining and refining firms have been critical of the U.S. government for not supporting REE supply sectors with timely permitting and realistic regulations, according to U.S. Rare Earths’ advisory board, exacerbating what has now become a national security issue.

The term REE encompasses 17 chemically similar elements, all adjacent to each other on the periodic table for you who recall high-school chemistry. There is virtually no substitute for them in many modern products, including hybrid batteries, magnets, computer components and catalytic converters. However, more than REE materials are involved in this issue of strategic minerals.

For example, cobalt is a critical metal used in rechargeable batteries, catalysts and in production of superalloys. China refines 45% of the world’s cobalt but only mines 7%. Cobalt used in mobile phones and computer rechargeable batteries represents 81% of Li-battery demand, so cobalt use in electronics has jumped from 700 tons/year in 1995 to 14,000 tons/year in 2009. Mobile phones alone accounted for 25% of world cobalt demand by 2009. Cobalt in Li-ion batteries contributes 50% of the cathode weight. These batteries were used in only 1.6% of automobiles just three years ago but are projected to be used in 43% of cars made in the next five years. In Japan, one in five Hondas sold last year were hybrids, and the same is expected for the U.K. within three years. Mercedes-Benz believes that cars powered solely by gasoline or diesel will cease to exist by 2050. The facts are that the U.S. is now 100% dependent on foreign sources of 17 minerals and 50% dependent on foreign sources for 25 more, all of which have strategic importance.

The National Minerals Partnership (NMP) is a group of 20 universities that contain much of the academic expertise related to mining and minerals preparation. The NMP’s goals are to:
  • Re-establish U.S. markets for strategic metals and minerals
  • Expand U.S.-based manufacturing capabilities for these products
  • Expand technical expertise in extraction and beneficiation of these materials
  • Develop technologies that reduce and recycle associated waste streams
  • Develop and educate a technical workforce in this strategic materials context
Five REE-related bills are pending in Congress (all introduced in 2011 and carried over to this 2012 session), three in the House and two in the Senate. These are:

1.) H.R.2090 – Energy Critical Elements Advancement Act (June 11, 2011)
2.) H.R.2011 – National Strategic & Critical Minerals Act (May 25, 2011; most advanced of all bills with 35 co-sponsors)
3.) H.R.952 – Energy Critical Elements Act (March 8, 2011)
4) S.383 – Critical Minerals and Materials Promotion Act (Feb. 17, 2011)             
5) S.1113 – Critical Minerals Policy Act (May 26, 2011; 19 co-sponsors)

It is likely that S.1113 and H.R.2011 (see House Report 112-248) will be combined. The resulting legislation could have significant, positive impacts on U.S. industry.

It is heartily recommended that readers check pending legislation and then voice their opinions to members of the House and Senate for action. It is always good to understand these items of legislation. For more information, This is a Library of Congress site where you can enter a bill number on the home page for various informational links to gain a better understanding.

Try it. It’s interesting. IH