I discussed in Part 1 of this white paper, how the US lost the Rare Earth Element (REE) mining leadership and ceded sourcing to China. China has now built a formidable, vertically integrated, REE strategic sourcing capability and Covid-19 has exposed the extent of US dependence on China for most materials and supplies. In this article, I propose a national security and economic strategic framework for reshoring REE back to the US.
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, 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 (0% 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 are better answered by a focused and sustained government activities through appropriate agencies and funding.
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 governance structure at a national planning stage.