Fears of a shortage of rare-earth minerals used in high-tech applications has bolstered an effort to reopen production at the Mountain Pass Mine in the Mojave Desert.
Fear of a shortage of rare-earth metals used in high-tech military and industrial products has spawned global efforts to reopen abandoned mines, including the formidable Mountain Pass Mine in California's Mojave Desert.First up, Politico's take on Goldman et al:
Discovered in the 1940s by uranium prospectors, Mountain Pass contains an array of rare earths, including cerium and lanthanum, in concentrations almost double those found at the world's biggest rare-earth mine, China's Bayan Obo.
"You're looking at the greatest rare-earth deposit in the world," says operations manager John Benfield as he ushers a visitor around the 2,200-acre site 60 miles southwest of Las Vegas.
Benfield's employer, Molycorp Minerals in Colorado, has just begun a two-year effort to restore Mountain Pass to its former role as a leading global producer. Those plans were given a boost recently amid fears that China was poised to ban exports of some of the scarcer rare-earth metals and to sharply limit shipments of others....MUCH MORE
Critics blast $3M mining handout
Goldman's Mining Subsidiary Using China Fears To Get Taxpayer Money (GS)" had a couple good links. From the Financial Times' DragonBeat blog:
A mining company owned by Goldman Sachs and two private equity funds is in line to get a $3 million earmark for work at a rare earth elements mine in Mountain Pass, Calif. — raising questions as to why Congress would take on some of the risk for a bailed-out investment giant that’s already making a profit.
Molycorp Minerals’s open-pit mine is one of the world’s richest sources of elements that are used in the production of powerful magnets for precision-guided missiles and smart bombs, handheld communication devices, wind turbines and hybrid cars.
Rep. Jerry Lewis (R-Calif.) inserted the earmark for the mine into the House Defense appropriations bill, and backers say it’s a legitimate national security concern. The military needs rare earth elements, and China — which is rich in them — has threatened to cut off exports.
But some government watchdogs question whether taxpayers should be asked to prop up a project that is already funded by wealthy investors who expect to make a profit.
“It’s probably good business, and we probably don’t need to subsidize it,” said Ryan Alexander, president of the nonpartisan Taxpayers for Common Sense.
Moreover, Alexander said, if getting the elements from the mine is really a national security issue, then the funding request would have come through the Department of Defense — and not through a lawmaker’s earmark.
“If this is critical to national security, and the private equity firms that own Molycorp can’t find another $3 million to meet the needs of the Mountain Pass mine, there still is no excuse for this being an earmark,” Alexander said. “DOD can request programmatic funding so those funds are weighed against other security priorities rather than being singled out by one member of the House Appropriations Committee.”>>>MORE
No ban on exports of rare-earth metals
China’s rare earth miners, if you believe a flurry of recent newspaper articles, have the world’s producers of high-tech equipment by the short and curlies.
A draft plan by China’s Ministry of Industry and Information Technology (MIIT) to ban exports of certain rare-earth metals has fuelled fears of an impending global shortage of high-tech products reliant on these metals.
Although MIIT now assures that no such ban will be enforced, high-tech producers remain nervous. Rare-earth metals are used to make vital components in wind turbines, electric cars and a host of electronics appliances.
Our advice: don’t panic.
The hullaballoo over China’s rare earths policy goes like this. China mines 95 per cent of the world’s rare earth ores and controls the global market for processed rare earth metals....MORE
That is contrary to the pitch Goldman has been making, via DefenseNews:Battling a Mineral Monopoly
As U.S. Defense Department officials complete a comprehensive review of the components used to build most U.S. weapon systems, analysts and industry officials say the Pentagon will discover it is almost entirely dependent on China, its chief economic and military rival, for some key minerals....
...Company officials are exploring a number of options to raise the capital needed to hit the 2012 objective, including private-sector and government sources.
Smith said he has met with officials in Washington about a number of federal funding options, including some Energy Department loan programs. And he hopes to receive funding support from private-sector firms.
In the end, Smith said he expects to raise the needed funds from a mix of public and private sources.
The company's 30-year mining plan envisions potentially doubling the annual 20,000-ton production rate, he said.A 'Sea Change' at DoD
Company officials also have met with Pentagon officials, aiming to educate them about the rare earths market and China's dominance.
Smith said he does not seek military funding in these meetings. Rather, his message is that government officials should take steps to lock in sources of rare earths from outside Chinese control.
For years, the issue has not received high-level attention in the Defense Department because "these components are so far down the supply chain," Smith added.
But that is changing, sour-ces say.
"This is going to be an issue that's going to get a lot of scrutiny" from the Obama administration's Pentagon team, one DoD official said last month.
Pentagon officials have launched a comprehensive study to assess the origin of all raw materials and other components that go into American weapon systems, according to sources.
Lifton said he has seen a "sea change" in how Pentagon officials view rare earths in the last year.
Before, defense officials "felt like, 'We only need a small amount, and we can always get a little bit,'" Lifton said. But in recent months, he said, Pentagon brass came to understand that "it doesn't matter what the price is if China refuses to give us any."The price of most rare earth materials has traditionally hovered around $4 or $5 per pound, but Chinese officials hiked prices to about $17 per pound last summer....