U.S. set to return to rare earth industry
TEXT OF STORY
STEVE CHIOTAKIS: Looks like the U.S. may be ready to jump back into an industry it ceded to the Chinese a decade ago. This morning, the Department of Energy will be sharing its strategy on getting us back up to speed on critical “rare earth” metals. This week, a company called Molycorp got final approval to re-open such a mine in California’s Mojave desert.
Marketplace’s Sarah Gardner from the Sustainability Desk got a first-hand look.
Sarah Gardner: A year ago, I’d never heard of “rare earth” metals. This week, I found myself on a bus to Mountain Pass, Calif., taking Rare Earth 101 from Molycorp spokesman Jim Sims.
Jim Sims: Didymium, as you’ll learn today, is a combination of neodymium and praseodymium…
Forget the tongue-twisters. What’s important is we depend on these metals: they’re in cell phones, hybrid cars, laptops, even jet fighters. China’s been the dominant producer for years now but it’s cutting back exports. So Molycorp is preparing to re-open the only rare earth mine in the U.S. It’s just off Interstate 15, an hour southwest of Vegas.
Rocky Smith: We’re about 400 feet from the edge to the bottom.
General manager Rocky Smith gives the guided tour of this open pit mine. It’s an impressively big hole in the ground. More impressive than the rust-worn buildings here that date back to the ’60s. That’s when this mine supplied the world with “europium,” the stuff that gave us vibrant reds on our color TV screens.
But the mine closed in 2002, plagued by environmental problems and Chinese competition. When it re-opens, Molycorp’s promising cleaner operations and at least 20,000 tons of rare earths each year. CEO Mark Smith says that’s more than enough to meet current U.S. demand. And there’s room to grow.
Mark Smith: We’ve only disturbed 55 acres after 58 years. And we own 2,222 acres. So we will be here for many, many hundreds of years.
A bit of CEO hype, perhaps, but Smith has reason to be giddy. Molycorp’s stock price has more than doubled since July. But Agora Financial’s Byron King says Molycorp has yet to prove itself.
Byron King: This is a lot more like running Dow Chemical Company than it is like running, say, Barrick Gold.
King says rare earth mining and processing is complex chemistry and the U.S. hasn’t done it for years. Starting over again will no doubt test Molycorp’s mettle.
In Mountain Pass, Calif., I’m Sarah Gardner for Marketplace.
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