COLUMN-Critical minerals and mining reform in the U.S.: Kemp – by John Kemp (Reuters U.S. – January 31, 2014)

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Jan 31 (Reuters) – Critical minerals like rare earths, lithium and tellurium are becoming ever more essential to the modern economy, yet production in the United States remains limited, leaving the country relying on imports from just a handful of countries led by China.

For many of these materials, there are few substitutes, raising obvious concerns about supply security. It wasn’t always this way. The United States was once the world’s leading producer of rare earth elements (REEs). However, mining at its Mountain Pass facility was largely suspended between 1998 and 2010 owing to environmental concerns.

China came to dominate production in the 2000s. Beijing’s decision to impose export restrictions on REEs, tungsten and molybdenum in 2011 and 2012 to reserve more of them for domestic manufacturers underscored the supply chain’s vulnerability and drew protests from the United States, the EU, Canada and Japan, as well as a complaint to the WTO.

Since then, Mountain Pass has reopened, following the construction of a new $1.55 billion processing facility by its owners Molycorp. New sources of supply are also becoming available from Mount Weld in Australia. The market is rapidly moving from tight supply into surplus.

But many policymakers, as well as rare earth producers and high-technology firms, remain concerned about import dependence, and want to do more to encourage the production of rare earths and other scarce but important materials within the United States.

PERMITS OR FUNDING

Congress is currently considering two pieces of legislation that take contrasting approaches to the problem.

“The National Strategic and Critical Minerals Production Act” (HR 761), approved by the House of Representatives largely along party lines, aims to boost supply by streamlining the process for obtaining mining permits.

It contains no new funding for minerals-related research and production, but is opposed by the Obama administration and environmental groups because it might weaken environmental regulations.

By contrast, the “The Critical Minerals Policy Act” (S 1600) being considered by the Senate Committee on Energy and Natural Resources, has bipartisan support from 19 senators (10 Democrats and 9 Republicans) including the chairman and highest-ranking Republican on the committee.

S 1600 would authorise spending up to $60 million for new studies of domestic mineral resources and research into recycling and substitutes. It funds a review of the permitting process but does not mandate any changes.

The administration has not yet expressed a formal view on S 1600. But at a hearing on Tuesday, the bill won strong support from producers like Molycorp, as well as trade organisations representing users like the Semiconductor Association and automakers, and the leading academic researchers working in the field.

LEGISLATIVE AIMS

Whether either of these bills would be a good piece of legislation depends on what the fundamental problem is that has been holding back production of rare earths and other critical minerals.

For the rest of this article, click here: http://www.reuters.com/article/2014/01/31/usa-mining-rare-earths-idUSL5N0L52QP20140131

 

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