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US Company Working to Expand REE Sources

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.

5 comments on “US Company Working to Expand REE Sources

  1. AnalyzeThis
    February 11, 2011

    This is interesting news and of course trying to develop alternative sources of REEs is an ideal option… but as we all know, even if great strides are made with an endeavor such as this, it's going to be many years before we see any results.

    In the short term, China is very strong here.

    I like the concept, but investing in a company like GTSO would be a tremendous gamble.

  2. jbond
    February 11, 2011

    Ultimately any alternative to a natural non renewable resource is going to be a great option. There is of course the time and cost involved with research and development. Assuming you can find a viable replacement, overall cost is going to be a factor. Could the manufacturing process price many companies out of the market?

    Going through Mongolia instead of China will hopefully help the current exporting situation. I know firsthand of some companies that are trying to use loopholes by compounding some of the materials in China and them shipping that material to the states. It is a loophole showing they are exporting something other than just a raw material.

     

  3. Eldredge
    February 13, 2011

    This seems lke an excellent opportunity. I.m sure the investment is high, but the reward could be tremendous. If I were a lagre user of REEs, I would definitely arrange to obtain materials from both sources as soon as possible to mitigate interruption of future supply.

  4. seel225
    February 13, 2011

    Thanks to barbara for the article, as most of the non technical people may not be  aware of the rare earth elements. As the high tech industry is concerned about the shortage of REEs, the supplying companies should work with other countries other than china , where REEs are available.

  5. Barbara Jorgensen
    February 14, 2011

    I'd definitely like to hear more from the companies on the risk/reward scenario. At the moment, REEs are used in minuscule amounts, but if green technology in the US ever takes off we really need to know the consumption forecasts of these materials; recycling re-use efforts; ramp-up time etc. Mining is also a dangerous and time-consuming effort, but the investing company sounds like they've already established themselves as an earth-friendly operation. It will be interesting to see how this develops.

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