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It's a deep pit in the Mojave desert. But it could hold the key to America challenging China's technological domination of the 21st century.
At the bottom of the vast site, beneath 6 metres (20ft) of bright emerald-green water, runs a rich seam of ores that are hardly household names but are rapidly emerging as the building blocks of the hi-tech future.
The mine is the largest known deposit of rare earth elements outside China. Eight years ago, it was shut down in a tacit admission that the US was ceding the market to China. Now, the owners have secured final approval to restart operat
China controls 97% of global rare earth metals production
China's dominance of global rare earths output will continue in 2011
"They have the ability to dictate the market if they want to,"
"With rare earths growth in the next five years about 225,000 tons, that's about 9% (year-on-year) growth number," Malan said. "Currently, supply is about 125,000 tons, out of which China produces about 120,000 tons."
"There's an abundance of rare earths around the world. It's not so much the mining, it's the fact we don't have the manufacturing capacity and we don't have the skill sets or the equipment. That's my biggest concern."
The mineable deposits of rare earths in North America are owned by:
Molycorp Minerals (private company in Mountain Pass, California)
Avalon Rare Metals Inc. (TSX:AVL;OTCQX:AVARF) (NW Territories, Canada)
Rare Element Resources Ltd. (TSX.V:RES) (Wyoming)
U.S. Rare Earths (a private company in Idaho)
Quest Rare Minerals Ltd. (TSX.V:QRM) (Quebec, Canada)
Great Western Minerals Group Ltd. (TSX.V:GWG) (Saskatchewan, Nova Scotia)
Ucore Uranium (TSX.V:UCU) (Alaska)
All of the above are North American resources. There are also significant, undeveloped resources of REEs in Australia, South Africa and Greenland. In order for the U.S. to be self-sufficient and become a net exporter of REEs, some of the above-listed companies must be developed now. Other countries, domestically, and China and Japan, globally, are racing to acquire and develop REE resources outside of North America. It is a global competition, and the other entrants are already well under way.
TGR: Do you see demand for these REEs expanding dramatically in the future?
JL: Demand for rare earths, and particularly for the big-four magnet metals, is growing at a rate that is unsustainable unless new heavy REE production is brought online in the next five years at the most. Due to the nature of REE deposits, this requires that the production of light REEs increase significantly also. Therefore, I believe there is now a window of opportunity for one or two light REE producers and several heavy REE producers to enter the market over the next five years. Anyone whose timeline is beyond that will not likely be successful in this run up of rare earth demand.
Bauer said the Energy Department is expected to release its strategy in December for boosting global production and diversifying supplies of rare earth metals. Diversifying is important to the Obama administration because of the White House's efforts to promote clean energy technology. Bauer said the department's plan will look at short-term ways to increase rare earth metal production over the next five years and longer. She said the department received about 1,000 pages of comments from 35 companies on how to boost rare earth metals production.