There's nothing like the possibility of a shortage to get the supply chain humming.
Demand for rare earth elements (REEs) is on the rise and is expected to soon outstrip supply. But this particular supply/demand imbalance could help accelerate US recycling efforts and support green technology advances at the same time. (See: The Truth About Rare Earths, Part 1.)
REEs are metals that most of us have never heard of but are key to the next generation of green technology. REEs currently are being mined mostly in China, which is also expected to be the largest consumer of REEs within the next few years. (See: China GDP Growth Spurt & the Rare Earths Connection.)
With the status of REE exports uncertain, the US, Canada, and a number of corporations have stepped up efforts to find an alternative REE supply line.
The Rare Earths Supply-Chain Technology and Resources Transformation Act (RESTART, more or less) aims to ensure the reintroduction of a competitive domestic rare earth supply chain by all necessary measures, including the provision of government-backed loan guarantees; support for innovation, training, and workforce development; and research into recycling. The Act is currently in a House of Representatives subcommittee. However, with US midterm elections just days away, supporters of the bill could raise Congress's awareness of the need for an REE supply line. Supporters (or detractors) of the RESTART Act can weigh in at Open Congress.
On other fronts, Toyota Motor Corp. is setting up a rare earth task force. A single hybrid car uses more than 60 lbs. of REEs, according to Design Chain Associates. An affiliated Toyota trading company, Toyota Tsusho Corp., established a rare earth mining joint venture in Vietnam two years ago. They expect the Vietnam mine to begin supplying minerals to Japan in 2012. Toyota Tsusho has also invested in a similar project in India, which should begin operating next year.
Toshiba Corp. (Tokyo: 6502) and Sumitomo Corp. have each launched rare earth joint ventures in Kazakhstan over the past year, and the Japan Oil, Gas and Metals National Corporation (JOGMAC) is partnering with Midland Exploration to open a mine in Quebec.
South Korea plans to spend 17 billion won (US$15 million) by 2016 as part of a long-term plan that seeks to secure 1,200 metric tons in rare earths reserves, according to Design Chain Associates LLC (DCA) . The plan will include strategies on developing domestic mines and investing into research for alternative materials and recycling technologies.
In the Americas, Avalon Rare Metals of Toronto and Great Minerals Western Group are opening mines in Canada. Molycorp Minerals, which owns the Mountain Pass mine in California, recently completed a $390 million IPO to restart mine production by 2012. Lynas Corp. is developing its Mt. Weld mine in Australia and is planning to reactivate its Steenkampskral mine in South Africa, but Lynas and smaller rival Arafura Resources lost their financing last winter because of the global financial crisis.
As we've seen with conflict minerals, heightened awareness and grass-roots efforts can have an effect on government policies and business ethics. (See:The Great Congo Paper Chase.) Let Congress know REEs are an important issue, and let's hope some of these efforts gel before too much time passes.