Rare-earth elements are supposed to be, by definition, geologically rare. The fact that China controls most of the world’s rare-earth deposits and processing is supposed to make them even rarer; but, as developed economies continue their quest to break loose from China for the supply of the critical materials at the heart of key high-tech components, research is showing that they are less scarce than thought.
“Rare earths are not that rare,” Marty Weems, the president for North America of American Rare Earths, tells fDi.
After losing the whole value chain to China in the past three decades, the White House has been assertive in its efforts to secure a reliable and sustainable supply of rare earths.
“Over-reliance on foreign sources and adversarial nations for critical minerals and materials posed national and economic security threats,” reads a statement by the White House published on February 22.
There is only one US rare-earth mine in operation currently — the Mountain Pass mine in California, run by Nevada-based MP Materials, which produced and sold approximately 15% of the rare-earth material in the global market in 2021, according to the company’s estimates.
China controls more than 71% of the world’s extraction and 87% of the world’s processing capacity of rare earths, according to figures from the International Energy Agency. As the world transitions to a clean energy economy, global demand for rare earths and other critical minerals, such as lithium, is set to increase by a factor of five to seven, according to White House estimates.
Mining exploration companies such as American Rare Earths are now on a quest to find viable rare-earth deposits across the US.
“There are deposits of rare earths all over the world,” Mr Weems says. “The issue is finding them close enough to infrastructure, in places where a company can have all the permitting to operate, find the workforce to do the work, transport the material, and do all this in an economically viable way.”
According to data from the US Geological Survey, China has the highest levels of rare-earth deposits, with estimated reserves with 44 megatonnes (Mt), followed by Vietnam (22Mt), Brazil and Russia (21Mt each), India (6.9Mt), Australia (4Mt) and the US (1.8Mt).
With theoretical alternatives available, the White House has already banned Chinese imports of minerals critical to the production of batteries, starting in 2025.
“In the near-term, there is no other alternative to China,” Mr Weems says. “About 85% to 90% of the rare-earth minerals go to China [for final processing]. There is a small facility in Estonia — that’s the only other really small player that is counter to Chinese dominance.
“There is more coming online in Malaysia and Australia, and more here in the US. Fast-forward to 2024–2025, and the answer begins to change. There are other players in the industry other than us that will bring new mining and processing capacity online.”
American Rare Earths is exploring three prospect deposits in Arizona, Wyoming and Nevada. The company is also considering developing processing capacity while its prospect deposits prove their viability.
“There is the possibility that we choose to get operational in the middle of the supply chain, before we control our supply to generate some revenues in the short-term. In that case, we would buy raw materials from somewhere else. But ultimately, we want to control our complete supply chain from the raw material in the ground, all the way to making metals.”
In the meantime, the Department of Defence (DoD) has awarded MP Materials and Australian Lynas Rare Earths $35m and $120m, respectively, to develop rare-earth processing capacity in the US.
According to cyber security firm Mandiant, Dragonbridge — an online influence campaign linked to Beijing — spread fake news about Australian Lynas Rare Earths and other rare-earth companies in an apparent effort to undermine their investment plans outside China.