Challenging China in Rare Earth Mining
The New York Times reports from California’s Molycorp Minerals rare earth mine, which is preparing to reopen as a challenge to China’s monopoly of the industry:
The chasm, in Mountain Pass, California — 400 feet, or 120 meters, deep — used to be the world’s main mine for rare-earth elements, minerals crucial to military hardware and the latest wind turbines and hybrid gasoline-electric cars. Molycorp Minerals, which owns the mine, announced Monday that it had registered with the U.S. Securities and Exchange Commission for an initial public offering to help raise the nearly $500 million needed to reopen and expand the mine.
Molycorp is making a big bet that its mine, now a rusting relic, can be made competitive again. Global demand is surging for the minerals. And customers, particularly the U.S. military, are seeking alternatives to China, which now mines 97 percent of the world’s rare-earth elements.
…Worldwide sales of freshly mined rare-earth oxides, although growing more than 10 percent a year, are still worth only about $1.4 billion a year, limiting the potential sales from new mines. Molycorp and the other companies face a challenge in matching China’s low costs, a result of low wages and China’s willingness to tolerate heavy environmental damage from such mines, which have turned nearby areas into moonscapes.
Very low prices for rare-earth elements from China contributed to cutbacks at the Mountain Pass mine before it closed in 2002. They also discouraged most entrants to the industry until the past two years, when prices began to climb because of strong demand.
Read more about the mining of rare metals in China via CDT.