• June 11, 2019

    A Cleaner, Stronger Energy Future Requires Domestic Rare Earth Mineral Mining Program

    Stephen Eule

There’s no doubt that greener energy technologies require minerals like copper, nickel, cobalt, and other rare earth elements. These are the raw materials needed to build everything from cell phones to airplanes, computers, solar panels and self-driving cars. As the United States increases its use of renewable power, we will need rare earth minerals to manufacturer solar panels, battery, and other technologies. But according to a recent report from the U.S. Department of Commerce (DOC), the United States is import-reliant (importing more than 50 percent of annual consumption) for 31 of 35 of these critical minerals.

The report found that this makes the U.S. economy vulnerable to supply shocks in the future:

Lack of domestic processing and manufacturing capabilities for critical materials makes the United States vulnerable to potential geo-economic and geo-political actions from foreign governments that may lead to price and demand volatility for specific minerals, as well as potential supply disruptions causing mineral shortfalls.

DOC recommends addressing vulnerabilities in the critical minerals supply chain by increasing domestic exploration and production, encouraging recycling, and developing new technologies that are less reliant on these materials.

Addressing vulnerabilities in the critical minerals supply chain through an increase in domestic exploration, production, recycling, reprocessing, industry incentives, and research and development (R&D) investments would help reduce our Nation’s reliance on imports, preserve our leadership in technological innovation, support job creation, and improve our national security and balance of trade.

China currently controls the lion’s share of the world’s critical minerals. As a result, DOC believes that continuing to work with our trading partners—such as Canada and Mexico, where many needed minerals are found—can help improve the security of U.S. supply, underscoring yet again the benefits of free and open trade.

U.S. access to critical mineral resources abroad and the viability of industries producing these minerals in the United States can be negatively impacted by trade and investment restrictions, and by foreign conduct that distorts markets through various forms of unlawful or otherwise unfair competition.

Some of the concerns underlying DOC’s report are already impacting supplies. In May, Tesla’s global supply manager told an industry conference that the company expected a global shortage of key minerals needed to make electric vehicle batteries. Nor is the worry limited to car-makers. Smart-home systems, like Amazon’s Alexa, Google’s Echo, and the Nest thermostat, are projected to require 1.5 million tons of copper by 2030. The Wyoming Mining Association has a good overview of other everyday uses of these rare earths. 

Despite the growing demand for these minerals, the United States has done comparatively little to develop known mineral resources or to assess what other resources might be found. According to U.S. Geological Survey data, less than 18 percent of the U.S. land mass has been geologically mapped at the necessary scale. Even less of the country has been mapped using the aeromagnetic technology at a sufficient resolution to perform robust mineral resource assessments.

The lack of geophysical, geological, topographical, and bathymetrical mapping at the scale required for mineral resource assessments and private sector exploration is a critical information gap that must be closed to facilitate domestic development.

Domestic mining and trade agreements with friendly countries are ways to avoid shortages of critical minerals. At the same time, the report acknowledges that “mineral criticality is not static, but changes over time,” and it advises that any list of critical materials be periodically assessed and revised, something that will require “coordinated efforts across the Federal Government.”

Ironically, opposition to developing America’s rare earth resources is coming from the same groups that want to ban fossil fuels. In the United States, rare earth minerals are only produced (but shipped to China for refining because we don’t have the capability to refine these elements domestically) from a single mine in California, while efforts to expand production in places like northern Minnesota have been met with stiff resistance from environmentalists. The same groups that are pushing for a transition away from fossil fuels are also fighting against the domestic mining of these critical elements that are required to manufacture renewable energy technologies.

A Global Energy Institute survey this spring found that more than 7 out of 10 Americans support an energy agenda that both uses more American energy and continues environmental progress. Reaching this goal means finding ways to develop domestic deposits of rare earth minerals, while also pursuing good trade policy.

Given the increasing rare earths and other key energy-related materials, the Global Energy Institute will in its next Index of U.S. Energy Security Risk include a special feature examining for the first time the risks associated with their global production and their import into the United States, just as we have done for other critical fuels, like oil, natural gas, and coal. So stay tuned!