The recent threats by the Chinese government to stop shipments of vital minerals to the United States has exposed the dangerous folly of years of American environmental policies against mining. Rare earth minerals are essential in the production of numerous 21st century technologies, from cell phones and solar panels to electric batteries and military weapons systems. The good news is that these rare earth minerals are abundant, especially in the United States. The two of us have warned for years that because of heavy reliance on China and to an extent on Russia, Beijing might seek to weaponize its market power in these strategic resources.
That is the card President Xi is threatening to play to gain leverage in the ongoing trade dispute. But China is not nearly as indispensable as it thinks it is, and if President Xi goes forward with this threat, it will likely backfire. The decision by China to limit rare earth mineral supplies a few years ago caused prices to rise. Japan and Australia responded by finding more cost effective and reliable substitutes, in turn depressing demand for Chinese metals. The Japanese announced last year that they found minerals off their coast that are so large, they described the supply as “semi infinite.”
The bad news is that the United States has mostly stopped producing these minerals. According to geoscientist Ned Mamula, data from the latest federal geological survey showed the United States has become 100 percent dependent on imports for at least 20 critical and strategic minerals, not including each of the rare earth minerals, even though we were number one in mining output across the world as recently as 1990.
This is an infuriating development because the United States has an abundance of these resources. The United Mining Association estimates that our country could lay claim to $6 trillion of mineral resources. Year after year, this treasure chest of vital minerals remains in the ground due to extreme environmental rules. The federal rules for opening a mine are so draconian that it can take up to a decade for the government to give a green light for this. That is double the time it takes in most other nations.
There has been some progress in reversing our withdrawal from these markets. President Trump has issued executive actions on mining, and some promising new excavation activities have started in the resource rich western states. The once prolific Mountain Pass mine in California, mothballed since 2002, will bring a processing plant online next year. Australian firm Lynas is investing in a rare earth separation facility in the United States with Blue Line Corporation, while Texas Mineral Resources wants to develop a mineral deposit and add a new processing facility.
But environmental activists remain committed to blocking new mining projects. Ironically, these restrictive rules merely shift mining to nations like China and countries in Africa, which have far worse environmental safeguards on air pollution and drinking water. We also wonder whether the extreme environmental groups that block American mining realize that many “green energy” technologies like solar panels, which they so ardently champion, rely on a stable supply of these rare earth minerals.
Other nations seem primed to take on Chinese dominance in rare earth minerals. Why not the United States? It will certainly take time to get the minerals out of the ground and build the infrastructure to bring them to market. But the recent threats by China should be a wakeup call that we must get going now. With the right federal policies, we can become the global resource superpower, in much of the same way that shale oil and natural gas have made the United States the dominant energy producer.
A smart American mining commitment will create thousands of new jobs and billions of dollars of economic output. It will also eliminate any future threat of China becoming the new controlling cartel of strategic minerals.
This piece originally appeared in The Hill on 6/4/19