Rocky Barker: Chinese politics spotlight Idaho’s rare-earth deposits

October 11, 2010 

The need for rare-earth minerals like neodymium could define the relationship between the United States and China and elevate Idaho into a critical role in the nation’s industrial future.

China currently supplies 97 percent of these critical minerals, which have properties that make them important for superconductors, magnets and lasers used in wind generators, cells phones and military hardware. China’s own phenomenal growth has prompted officials there to suggest there may be a time when the country will be forced to cut off exports.

Those decisions could come for political reasons as well.

This was highlighted recently when China briefly halted shipments of rare-earth minerals to Japan’s high technology industries after Japan arrested a Chinese fishing boat captain in contested waters. China officially denied that any embargo had taken place, but since the embargo was revealed, shipments have resumed.

That got attention on Capitol Hill last month, and Boeing has announced it is seeking to secure its own supply of these strategic metals. It happens that Idaho appears to be one of the few places where these metals occur in quantities large enough to mine.

Washington Democratic U.S. Sen. Maria Cantwell chaired an Energy and Natural Resources Subcommittee on Energy hearing last week in which experts testified that the limited supplies of 17 minerals — like neodymium, samarium, promethium and europium — could limit U.S. technological advancement and economic growth.

Fifteen years ago, the United States was the world’s largest producer of rare-earth minerals. But the last major rare-earth mine in the U.S. was closed in 2002. And though China produces almost all of these minerals right now, it has only 36 percent of the world’s reserves.

The U.S. holds about 13 percent, and the rest is distributed in other countries. That worries wind and solar companies, which are competing directly with Chinese companies and their support and capital from the Chinese government.

”The loss or disruption of the rare-earth metals supply would be catastrophic…in terms of price spikes, production volume and related supply chain disruptions that would drastically limit our ability to develop and manufacture our products,“ said Peter Brehm, vice president of business development of Kennewick, Wash.-based Infinia, which manufactures solar power generators.

Cantwell wants the federal government to help potential producers of both rare-earth minerals and strategic minerals (like cobalt), so they can ensure supplies. That brought another Idaho mining company into the spotlight, the Formation Capital, which wants to open a cobalt mine near Salmon.

”While demand for cobalt increases globally, the supply continues to be controlled by an exclusive group of countries or foreign companies that may not be friendly to the U.S. or are politically unstable,“ testified Preston Rufe, environmental manager for the U.S. subsidiary of the Canadian company.

One of the few companies’ actively seeking rare earths in the U.S. has found deposits near Lemhi Pass, the North Fork of the Salmon River and Diamond Creek in the same area around Salmon. U.S. Rare-Earths signed a contract with Boeing in September to use the corporate giant’s technology to confirm and map its rare-earth deposits.

”Boeing’s technology will greatly enhance our exploration capabilities and provide a competitive advantage for the discovery of new deposits,“ said Rare-Earths CEO Edward Cowle.

This is not going to be easy to resolve. China can manipulate the market to make it hard to ensure the prices that can attract capital. Then there are the environmental issues.

The last domestic rare-earth mine closed in 2002 because of environmental problems, all the more reason to resolve mining reform issues. The rare earths occur with the slightly radioactive mineral thorium, considered as an alternative fuel to uranium for nuclear reactors.

The deposits lie in the middle of critical habitat for endangered salmon and steelhead and one is next to the place where Meriwether Lewis first looked into the Pacific watershed, almost a national shrine.

If the United States is to keep its technological leadership it must have free access to the raw materials it needs to compete. Idaho has a strong supply of some of those minerals so we are going to be in the middle of U.S.-China relations whether we want to be or not.

Rocky Barker: 377-6484

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8First reported at IdahoStatesman.com

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