Are we compromising national security with roadblocks to new mining?

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By Christopher Hopkins
Senior Vice President, Aggregates and Mining, The Saint Consulting Group

Numerous arguments are made for and against mining. Public debate typically focuses on mining’s impacts on the environment, the economy, the landscape, home values and impacts on communities. Virtually ignored, however, is how the decline in mining in the United States affects national security.

When forced to consider mining’s contributions to national security, most people will identify the usual suspects — oil, natural gas, uranium and coal.  All are vitally important.

But it’s time for Americans to consider a different type of mining, what is often referred to as “rare earth” mineral mining. These are some of the world’s most obscure but valuable minerals, 15 elements used in a variety of ways to produce products that are vital to national defense, our economic future, our technological future, and even our environmental future.

The so-called rare earth minerals include such elements as lanthanum, neodymium, praseodymium, terbium, dysprosium and erbium. These minerals and the other nine are key in the production of essential products used every day. They are key ingredients in everything from the sonar radar used on Navy warships and submarines to the hydride batteries used to run the latest hybrid automobiles.

For example, the magnets required to operate a single wind turbine are composed of two tons of rare earth materials. According to a recent Reuters article, the Toyota Prius is fast becoming the largest user of rare earth minerals in the world. A Prius uses 2.2 pounds of neodymium for lightweight magnets that help power the electric motor, and 22 pounds of lanthanum in the battery. As Toyota seeks to increase productivity and fuel economy, these amounts will double.

China holds 53 percent of the world supply and currently produces 95 percent of the rare earths mined. But in each of the last three years, China has reduced the amount of rare earths that can be exported. Western governments and multinational corporations alike are alarmed by the possibility that China will further restrict exports. The Telegraph of London reported in August that China was considering a total ban on export of several of the rare earth minerals.

Just one active rare earth mineral mine is operating outside China (it’s in Australia). A second mine is scheduled to begin mining in Mountain Pass, California, in 2011. Mountain Pass had been an active mine until the early 1990s when China flooded the mineral market, driving down the price to the point where it was no longer profitable to produce.

Even if China wanted to, it cannot in the near future produce the amount of material that will be required across the globe. In 1999, world demand for these materials was around 40,000 metric tons per year; in 2009, that demand grew to 125,000 metric tons. It is estimated that by the year 2014, demand will be 200,000 metric tons.

China’s virtual monopoly of the rare earth mineral sector allows it to manipulate the pricing structure of these minerals, increasing the revenue flowing into China from around the world and its ability to dominate the world economy.

This is recognized as a real threat to our economy and our ability to transition into the “green economy” that is being touted as the world’s next great economic boom. Jim Sims, president of the Western Business Roundtable, predicted that if China stops its exports, wind turbine production would cease entirely within 60 days.

The 47% of the world supply not located in China is primarily located in the United States and Australia. Any new restrictions on mining these minerals in the United States could threaten our future. Neodymium, the key element needed for wind turbines, is located in the Lemhl Pass in Idaho, but the site borders the Lemhl River, one of the largest producing salmon tributaries on the Salmon River. Any attempt to mine this area would undoubtedly meet strong opposition from environmentalists.

There needs to be an understanding and a balance between the environmental community and doing what is needed to ensure our national security, both militarily and economically. The key to the future may lie in the ability of these minerals to be mined in large quantities in the United States, with environmental community coming aboard in these efforts. With these materials being an essential ingredient in the coming green economy, it’s clear there is strong reason for cooperation and agreement on what is rapidly becoming an essential need for our future.

Chris Hopkins is senior vice president for aggregates and mining, The Saint Consulting Group, emailhopkins@tscg.biz and phone  615-656-3794

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