China Rare Earth Strategy May Reopen California Mine

The Molycorp mine at Mountain Pass | Google Maps image

Reuters is reporting that China expects to become an importer of rare earth elements by 2014, a shift in a strategic global market that may have a big impact on California.

The seventeen rare earth elements are used in a number of high-tech renewable energy applications, including powerful magnets used in turbines, superconductors for high speed rail, as well as in more commonplace applications such as lanthanum-nickel hydride rechargeable batteries, hybrid cars, and smartphones. (Lanthanum-nickel hydride also shows promise as a hydrogen storage medium.)

Despite the name, rare earths are not particularly rare on the planet Earth. They are, however, dispersed throughout the earth's crust to the point where extracting them is largely infeasible. Only a few spots on the globe are known to possess deposits of rare earth elements concentrated enough to make mining them worth the effort and expense.

From the mid-1960s until about 1990, a single mine in California -- the Mountain Pass mine, now owned by Molycorp -- produced the majority of the world's rare earth supply. As China started developing its domestic rare earth reserves in the late 1980s, it began exporting a large amount of rare earth elements. Global prices on rare earth elements dropped to the point where the Mountain Pass mine was no longer economically viable, and mining there ceased in 2002.

Here's a good backgrounder on rare earths and their relevance to California, produced last year by KCET's "SoCal Connected":

As demand increases for rare earth elements for everything from lasers to LEDs, however, and China's high-tech industry burgeons, the supply of rare earths coming out of Chinese mines in Mongolia is increasingly spoken for. China's recent decision to cut down production at its mines for environmental reasons only makes its shift from exporting to importing rare earth elements all the more inevitable. There's also the matter of China's stated desire to move from exporting low-value raw materials to high value engineered goods.

Molycorp has been trying to reopen its Mountain Pass mine for a few years, and currently says it's on track to start ore processing there later this year. This news has some environmentalists nervous. Between 1984 and 1998, when the mine was operated by Unocal and Chevron, a leaky wastewater pipeline spilled as much as 600,000 gallons of radioactive liquid into the nearby Ivanpah Valley. When Mountain Pass does start up again, environmental activists will be watching the facility closely.