A company based in San Jose is working to develop new sources of rare earth elements (REEs) outside of China.
Earlier this week, Green Technology Solutions Inc. (GTSO), which acquires, develops, and implements clean mining technology, announced a joint venture agreement with Rare Earth Exporters of Mongolia to pursue mining claims and operations inside China’s neighbor to the north.
GTSO specifically cited concerns about the shortage of REEs in the development of LED technology, but REEs are also used in electric cars, iPads, wind turbines, and high-tech weapons.
The high-tech industry is growing increasingly concerned about shortages of REEs because the majority of these materials are mined within Chinese borders. China produces 97 percent of the world’s rare earths and has slashed its rare earth export quotas three times in the past two years.
The joint venture plans to convey Mongolian mining products overland by railway for transport to the seaport of Vladivostok, Russia, in order to avoid shipping through China. Destination ports for these mining products are set to include the US, Japan, and South Korea, checkmating China’s strategic export policies.
Many experts believe that Mongolia, a former Soviet state, contains rare earth deposits that rival those of China. GTSO management is very enthusiastic about the prospects of its new Mongolian joint venture, according to a press release.
Although REEs aren't exactly rare, few viable sources of these materials are available outside China. Reclaiming these materials through recycling is another sourcing option, but the technology for doing so is limited and expensive. The US government, along with many technology and environmental organizations, has been calling on China to expand its exports of REEs. (See: Market Opportunities in REE Recycling; The Truth About Rare Earths, Part 2; The Truth About Rare Earths, Part 1; China GDP Growth Spurt & the Rare Earths Connection.)
Developing alternative sources of REEs is, of course, a better option, as long as it can be done safely, responsibly, and cost-effectively. I'm not sure what the political environment is like within Mongolia — stability would go a long way toward balancing a tenuous trade situation.