The United States has the worlds third largest reserve of rare earth elements. Considering the importance of these materials to our economy and the ever-increasing demand for them, you would think extracting, processing and exporting rare earth materials would be priority within the United States. If you thought that, you would be wrong.
China currently supplies 95% of the worlds rare earth materials. Predictably, China is openly reducing the export of these materials and since the United States no longer mines or processes our own rare earth materials, we are now at the mercy of China for our supply of these vital materials.
China will issue a second batch of rare earth export quotas later this year, but the total volume for 2011 has yet to be decided, the China Securities Journal said, citing Chinese commerce minister Chen Deming.
Chen said the decision on how much would be adjusted compared to last year was now in the “last stage of research.”
China announced at the end of last year that it would cut quotas for the first half of the year by 35 percent, saying rampant and unregulated production over the last few years had caused significant environmental problems.
This reduction in the supply rare earth materials is a severe problems within our economy since they are an integral part of modern manufacturing. Demand for rare earth materials has sky-rocketed over the last 20 years and will only increase in the future.
During the past twenty years there has been an explosion in demand for many items that require rare earth metals. Twenty years ago there were very few cell phones in use but the number has risen to over 5 billion in use today. The usage of computers and DVDs has grown almost as fast as cell phones.
Many rechargeable batteries are made with rare earth compounds. Demand for the batteries is being driven by demand for portable electronic devices such as cell phones, readers, computers and cameras.
With this critical problem in our economy what does Michigan’s very own Senator Debbie Stabenow (Democrat) suggest? How about a strongly worded letter to Treasury Secretary Tim Geithner and Interior Secretary Ken Salazar.
A series of recent reports highlights the United States’ vulnerability to shortages of rare earth minerals increasingly used in national security and clean energy applications. China has a monopoly on rare earths mining and processing, producing over 95 percent of the world output of rare earth minerals. The United States is 100 percent reliant on imports.
In recent years, China has ratcheted up restrictions on the export of rare earth minerals to encourage the production and export of high value-added rare earth products. China’s anticompetitive practices are exacerbating global supply problems at a time when world demand continues to climb. We propose the United States stop helping China enhance its dominant position in rare earth minerals. To that end, Secretary Geithner, we respectfully request that you instruct the United States Executive Director at each multilateral bank, including the World Bank entities, to oppose the approval of any new financing to the government of China or for a project located within China involving rare earth mining, smelting or separation, or production of rare earth products. The United States’ support for multilateral bank international development initiatives should not extend to projects directly at odds with our own national and economic security needs.
Mrs. Stabnow suggests we cut the financing of China’s mining operations when we need more rare earth material rather than less. If this letter is ploy to put pressure on China to increase exports it stands a good chance of backfiring. China is not afraid to play hardball. Last fall China implemented a ‘temporary’ ban on exports of rare earth materials to the United States.
I can see the headline now “US blocks financing of new rare earth mines, China cuts rare earth exports to the US by another 15%”
Great plan, Debbie.
At the end of her strongly worded letter, Mrs. Stabenow points out that (finally) there is some activity in developing our own sources of rare earth materials. However, she notes that this will be a long-term project.
The United States must have an adequate and reliable supply of rare earth materials for national security and industrial needs. In the long run, new mining projects coupled with development of refining, alloying and fabricating capacity will alleviate supply concerns.
With this fact in mind, does Mrs. Stabenow suggest that we fast track mining permits to bring our own sources of rare earth materials to market more quickly? Nope. Does she recommend tax incentives to make mining the material more lucrative? Not a chance.
All Debbie Stabenow can suggest is cutting off our nose in spite of our face.
