Molycorp Hoping to Re-Open Rare-Earth Mine in California
From the NYT, by Keith Bradsher; April 21, 2010
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.|
As part of reopening the mine, Molycorp plans to increase its capacity to mine and refine neodymium for rare-earth magnets, which are extremely lightweight and are used in many high-technology applications. It would also resume bulk production of lower-value rare-earth elements like cerium, used in industrial processes like polishing glass and water filtration.
But Molycorp, like other foundation stones of U.S. industrial pre-eminence that have cracked or eroded under the pressure of foreign competition, faces challenges that may prevent its bet from paying off.
Even riskier are efforts by nearly six dozen other companies in the United States, Canada, South Africa and elsewhere to open new rare-earth mines.
According to the Metal Pages database, cerium prices more than doubled to $4 a pound, or $8.80 a kilogram, in 2007 and have barely fallen since. Neodymium prices quintupled at the same time to $23 a pound and slumped before almost fully recovering over the past winter.|
“The pricing of the rare-earths doesn’t make sense — they’ve been way too low for way too long,” said John Benfield, the senior chemical engineer at the Mountain Pass mine. As he spoke, he watched pumps removing from the bottom of the open-pit mine a deep pond of accumulated rainwater and seepage, dyed violent green by mineral contamination.
Molycorp’s plan for an initial public offering on the New York Stock Exchange coincides with a flurry of interest in Washington on whether the United States should reduce its dependence on China for rare-earth elements.
A U.S. Government Accountability Office report, released last week, concluded that American military systems, including army tank navigation systems and navy radars, rely on rare-earth elements from China. The report made no recommendations on what policy makers should do, noting that the U.S. Defense Department planned to finish its own review by the end of September.
Representative Ike Skelton, the Missouri Democrat who is the chairman of the House Armed Services Committee, announced on the same day the report was released that the committee would hold a hearing soon on the U.S. military’s dependence on imported rare-earth elements.
And a bill introduced in March in the House by Representative Mike Coffman, Republican of Colorado, calls for the creation of a national security stockpile and for government loan guarantees for companies that want to mine and process rare-earth elements in the United States. Similar legislation is being drafted in the Senate.