US rare-earth mine reopened as DOE plans for shortages

Right now, the majority of rare-earth metals are mined in China, but the country has been running up against limits to its ability to supply both itself and its trading partners. The Chinese government has made it clear that it considers its own industry the top priority, and has even hinted at using its supplies as a diplomatic weapon. All of that has rekindled interest in US domestic production. That interest has now been highlighted by the first reopening of a US mine, an event that came on the heels of a Department of Energy study that rates five rare-earth elements as likely to face supply disruptions within the next five years.

The reopening of a California mine may become a more common event. In the face of cheap supplies from China and environmental issues, the mine shut down in 2002. The economic equation changed as the supply dwindled and prices went up; it now apparently makes sense to update and reopen the mine.

Unfortunately, as the article notes, it will take a couple of years for it to reach its full capacity. And that, according to the DOE report, is precisely the problem. The economic signals that can help guide decisions about things like mining tend to change rapidly; adjusting the supply to match them can take years. And that's precisely the problem that the US faces when it comes to the elements identified in the report, which focuses on materials needed for wind and solar power, along with efficient vehicles and lighting.

Some of these, like lithium for batteries and the gallium used in photovoltaic panels, are unlikely to see a supply crunch. But five rare-earth metals and indium are all likely to see disruptions within the next five years, and these are used in materials like magnets and LEDs. Many of these are likely to remain in short supply through the medium (five- to 15-year) time window as well, although long-term supplies should be sufficient.

The report suggests that the DOE take several steps to help ensure a steady domestic supply of these materials. These include steps like encouraging the development of a domestic extraction industry and fostering a robust recycling program for the most critically limited elements. The report also recommends that the DOE fund research into developing substitutes for these elements. In the meantime, it recommends focusing on the global supply chain and working with the US' trading partners to help ensure that any short-term supply crunches aren't too disruptive.

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