U.S.-China Trade war rekindles interest in mining rare earth minerals for smartphones, other electronics

U.S.-China Trade war rekindles interest in mining rare earth minerals for smartphones, other electronics

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There was a time when rare earth minerals, the stuff on which smartphones, wind turbines and hybrid cars rely, drew prospectors to Montana and Wyoming.

To counter an emerging supply threat from China, mining companies made plans to shovel up technology’s raw ingredients by the dragline bucket load from places like Lemhi Pass and Bear Lodge, Wyoming

Bear Lodge rare earth minerals site

Devils Tower is pictured rising above nearby farmland on Saturday, June 6, 2015, in Crook County. The Bear Lodge rare earth minerals site is nearby.

In 2010, China, which produces nearly all of the rare earth minerals used in advanced electronics, was threatening to limit rare earth exports. Japan had been making noise about China’s claim to islands in the South China Sea. China responded by curtailing rare earth exports.

It was a crisis for the next five years. Of the 17 minerals in the rare-earth category, nine are used in smartphones. But China’s threats died down and the mines were never built. So long as China produced rare earth minerals cheaply, U.S. mines could not compete.

This week, the threat resurfaced as China again threatened to cut off rare earth exports in retaliation to the U.S. tariffs. The Trump administration responded Tuesday by calling for new, favorable mining rules promoting the domestic extraction of 35 critical minerals, including rare earths.

“As with our energy security, the Trump Administration is dedicated to ensuring that we are never held hostage to foreign powers for the natural resources critical to our national security and economic growth,” said Interior Secretary David Bernhardt. “The department will work expeditiously to implement the president's strategy from streamlining the permitting process to locating domestic supplies of minerals.”

It will take more than permitting and locating to resurrect U.S. development of rare earth minerals. Courtney Young, a professor at Montana Tech’s Metallurgical & Materials Engineering Department, said China’s share of the rare earth minerals market is so big that tariffs can’t curb it. And the price of rare earths is too low to support newly developed U.S. rare earth mines.

Mountain Pass Mine is the only U.S. mine producing rare earths, and it has struggled in a market where whenever China loosens its grip, export prices fall so low rivals go out of business. A California operation, Mountain Pass went bankrupt in 2015 — the same year would-be mines in Montana and Wyoming faltered.

What’s likely needed, Young said, are subsidies for domestic producers. He's been adamant about the need for U.S. production of rare earth minerals, not only for consumer technology but also for U.S. defense.

There are 920 pounds of rare earth minerals in every U.S. F-35 Joint Strike Fighter jet, reports the U.S. Congressional Research Service.

“It’s pretty hard to put a tariff on something like that. All it’s going to do is increase the prices we pay for things if we don’t have domestic supply, and we don’t,” Young said. “It’s going to take some time to get up and running.”

The rare earth mines proposed for Montana and Wyoming earlier this decade looked promising but didn’t fare well. In 2013, an Arkansas company drilling for rare earth minerals along the Montana-Idaho line was progressing. It had drilled 18 test holes spread across 25,000 acres of the Lemhi Pass area, mostly in the Last Chance Mine footprint of Montana and the Idaho North Fork area.

Kevin Cassidy, U.S. Rare Earths CEO, told Lee Montana Newspapers in 2013 that the company would need a concentration and partial separation plant by 2015 the way things were going. Federal natural resource revenue data show the company had paid more than $175,000 in fees and permits for the project.

By 2016, U.S. Rare Earths had filed for bankruptcy. Attempts to reach Cassidy last week were unsuccessful. The company’s digital presence had been reduced to a Facebook account, which hadn’t seen activity since September 2015.

Wyoming’s Bear Lodge rare earth mine project was mothballed in 2016 because of low prices and a lack of investment. At the time developer Rare Element Resources pulled the plug on the $290 million project. The U.S. Forest Service had just completed an environmental review of the northeast Wyoming mine. The Forest Service recommended the project for development. The project was five years in the making. Calls and emails placed last week to Rare Element Resources were not returned.

There were more than rare earth minerals included in the list of critical materials issued by the Trump administration. Among the 35 was uranium, which drew the attention of Whitefish-based Western Values Project.

WVP had been objecting the inclusion of uranium since the critical mineral list appeared in draft form in 2017. Owners of uranium mines in Utah and Arizona have been pushing for federal support. By directive, the critical minerals list was not supposed to include minerals used as a fuel source, said Jayson O’Neill, Western Values Project deputy director.

Berhhardt, as an attorney in private practice, had represented mining company Ur-Energy for five years ending in 2012, O’Neill said. That relationship, as well as the shrinking of Bears Ears National Monument in Utah, concerned WVP because there are uranium mines in the area.

Ur-Energy also owns the Lost Creek Mine in south-central Wyoming. In March, the Bureau of Land Management approved an expansion of the mine. BLM was also reviewing plans for a new mine in nearby Shirley Basin, according to the Associated Press. Wyoming is the nation’s largest uranium producer.

Ur-Energy representatives told AP in March that they expected the Trump administration would follow through on a plan for tariffs or quotas on imported uranium. The move would make some struggling uranium mines profitable.


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