US says China has rare-earth materials monopoly

Updated: 2010-04-16

http://www.chinamining.org/News/2010-04-16/1271399187d35553.html

The U.S. Government Accountability Office (GAO) warned about China's power over supplies of rare-earth materials on April 14, 2010.

According to the GAO, China controls 97 percent of the rare-earth materials vital to the military, mobile phone and clean-energy technology sectors ¨C a situation that could put the United States in a perilous strategic position if it is not remedied.

GAO also said the United States previously handled all stages of the rare-earth material supply chain, but now most rare-earth processing is performed in China, giving it a dominant position that could affect worldwide supply and prices. On top of that, rebuilding a U.S .rare-earth supply chain could take up to 15 years.

Rare-earth materials are used in many applications for their magnetic and other distinctive properties and include 17 elements with names such as lanthanum, lutetium, neodymium, yttrium and scandium.

Some U.S. government and rare-earth industry officials think China increased export taxes on all rare-earth materials to a range of 15 percent to 25 percent and in the future China will only export finished rare-earth material products with higher value, according to the GAO.

A company called Molycorp Minerals, owned by Chevron Corp (CVX), has a large deposit of rare-earth elements at its Mountain Pass Mine in California. But the mine lacks manufacturing assets to process the ore into finished components. Also, it doesn't have 'heavy' rare-earth elements necessary for many types of industrial and military hardware.

Other deposits exist in the United States and elsewhere, but it could take nearly 10 years just to get production online.