In earlier posts, I outlined the background leading to the current Chinese monopoly in the Rare Earth Element (REE) market and why prevailing beliefs in the U.S. that private investment and opening of new domestic mines, low REE defense use, and individual metal, technology, or finished goods development cannot solve the problem. Very recent reports of Lockheed Martin facing China’s sanctions likely to restrict the supply chain for REEs crucial to advanced weapons production further illustrate the dependence emergency. In this article, I outline the steps necessary to develop a holistic private-government-academia R&D partnership plan to wrest control of the REE value chain.
What can be done?
The US needs to treat the REE resource holistically as a national economic and security issue. It must develop, based on national policy, a REE value chain, starting with raw material sources, sourcing, beneficiation, refining, distribution, fabrication, and recycling. Downstream users of these raw materials and alloys, and component manufacturers must be part of this value chain. This must be accomplished by a Government driven private-public partnership. The Senate Bill S. 2093 introduced on July 11, 2019, for the establishment of Thorium bearing rare earth refinery co-operative, is a good first step.
The important components of this value chain are described below.
- Materials exploration: Make REEs as byproduct material from other mining activities, such as, phosphates, iron ore. The REE mining investment cost is much smaller, only for downstream purification. The US Geological Survey has conductive extensive chemical analysis of 23 sedimentary phosphate deposits (phosphorites) in the United States with results demonstrating significantly enriched REEs in these ores. Phosphorite is the world’s principal source of phosphorus fertilizer. Thus, the REEs can be a byproduct of the fertilizer industry. The investment cost of product value added REEs will be significantly lower as the prime mining and initial recovery processes are already existing.
Co-operatives focused around REEs as a national security and economic policy should be set up to utilize the byproduct feedstock of the fertilizer industry. This concept should also be investigated for other mining areas, such as, iron ores and various mined materials.
- Exchanges: As an extension to the co-operative, electronic buy-sell exchanges should be set-up for commercial transactions among its members and non-members. These exchanges should be created using similar concepts as the Health Information Exchanges. One benefit of the exchange will be in creating capabilities for tracking supply and demand, while balancing against national needs and material allocation, if necessary, in times of crisis.
- Substitutions and substitutive technologies: A national initiative under the auspices of DARPA or NSF, or similar government or defense agencies should be chartered with intensively exploring possibilities for material and technology substitutions for REEs. While for most end products, no direct element for element replacement is available, systemic substitutes should be investigated. One idea is to consider the share of REE in applications and target high percentage applications. For example, Neodymium is used in about 69% of permanent magnets and Cerium is used in 90% of auto catalyst. What kind of substitutes may be feasible and how can substitutive technologies be used remove the REEs from the value chain where possible? These are questions better answered by a focused and sustained government and R&D activities through appropriate agencies and funding. Given the current state in the REE industry, it is highly unlikely that private industries will spearhead this type of research. However, once proven, they will likely join.
The US should actively encourage extensive development of REE programs, both research and teaching, at its Universities. Currently, only a few institutions offer dedicated REE teaching programs and R&D activity is also minimal. Joint support for innovation should be created in mining techniques and technology by collaborative government, academia, and industry partners to improve the industry and graduate, undergraduate, and community college education. University faculty and departments involved should be encouraged in cutting-edge research to enhance the quality of higher education and ensure the ability of the US to meet future human capital demand for mineral supply chain sector engineers and impending faculty retirements.
- Renewables and EV impact: It is often heard that REEs are indispensable for high-technology products and for renewables. However, the share of technology requiring REEs are not clearly documented. For example, how can asynchronous wind technology not containing REE using generators be extended? Or with the gradual commercialization of EVs, as catalytic converters will not be needed, the need for Cerium, as a catalyst, will drop. How will this be balanced against increased need for EV batteries? A co-operative or government agency driven continuous materials requirement analysis based on new technology, market trends, and substitutive capabilities can greatly assist in limiting the demand of the REEs.
- Strategic stockpile and inventory management: Similar to the national petroleum stockpile, US should develop a national REE stockpile program. This can work in co-operation with the co-operative and exchange framework. Again, it must be stressed that this is a national security and economic policy priority and there should be no place for ideology of partisanship.
- Sharing of critical competencies: An integral part of the co-operative framework should an explicit requirement of sharing knowledge and critical competencies among members. For example, an EV maker should co-operate with the battery supplier.
- Governance: The governance of the value chain should be composed of governance of the individual components and driven by an overall national governance structure.
As the above elements involve different stakeholders, a governance and management structures should be created by engaging the stakeholders aligned to a common objective of creating a national REE value chain. This will be a better alternative than Pentagon awards for opening of individual mines or similar single initiatives. What is needed is the entire might of this country – government, private sector, and universities – towards REE independence.