China's Cornering of Rare Earth Minerals Seen As Harbinger

Article Date: Tuesday, October 23 2012

By Rebecca Day

The National Mining Association put a faster permitting process for rare earth minerals mining at the top of its mission-critical list, NMA spokeswoman Carol Raulston told us. That day was the first annual Manufacturing Day, co-sponsored by NMA. On the mineral side, were the beginning of the supply chain for so many products manufactured in the U.S., the spokeswoman said, but because of an inefficient permitting system in this country it takes three to four times longer to get a permit here than it does in Canada or Australia or other countries around the world. The urgency to cut the time it takes to bring a mine online stems largely from Chinas restrictions on exports of rare earths, a harbinger of what could follow, Raulston said, expressing NMAs concern that India and Brazil and other countries will follow suit. She cited Chinas cornering of the market on rare earths such as neodymium, used in the manufacturing of magnets for smartphones, loudspeakers and wind turbines, which caused prices for those magnets to skyrocket last year. Youve seen tremendous fluctuation in various rare earths because of Chinas back-and-forth trade practices, she said. As electronic devices become more sophisticated, theres more need for these kinds of exotic materials, Raulston said. Early cellphones used 12 different minerals in manufacturing, compared with smartphones today that use more than 40, she said, and TVs require 35 different minerals. The concerns also extend to base minerals such as copper, she said. Even if copper demand only grows at 2 percent annually, which she said was a conservative estimate, it will be hard for production to keep up with that demand. It takes seven to 10 years for a new mine to pass the permitting process in the U.S., Raulston said. In Canada and Australia, the process takes two to three years, and in Chile, a large copper producer, it takes 18 months, she said. As a result, the U.S. is only meeting half of its domestic manufacturing needs for metals and minerals, Raulston said. Chinas huge internal demand for metals and minerals to build out its own infrastructure, along with restrictions on rare earth exports, has led the global marketplace for raw materials to become much more competitive, she said. The NMA strongly supports the National Strategic and Critical Minerals Product Act (HR4402), passed by the U.S. House this past summer, which would expedite the time it takes to get a mining approved by putting timelines on various stages in the permitting process. Companies have to do a lot of modeling to get permits to mine, the spokeswoman said. If youve done modeling for the federal or state government, the other

level of government should accept that data so you dont have to re-do things." The proposed legislation is a way to speed up the process and doesnt make changes to environmental requirements or the public comment process, she said. That legislation faces opposition from environmental groups, including the National Resources Defense Council. NRDC issued a statement following the bills passage in the House, saying it gives away valuable public lands to an industry that already enjoys royalty-free mining, gives mining companies free access to public lands and puts their rights above those of all other users. On how increased mining would affect manufacturing in the U.S., Raulston noted that access to minerals is a concern to a lot of U.S. manufacturers across several industries including CE, aerospace and medical equipment. General Electric has brought a lot of its appliance manufacturing back to the U.S. after toying with other places, she said, saying labor costs have also played a role. A lot of manufacturing moved offshore years ago because of reduced labor costs, but the differential is shrinking, she said. Manufacturing in the U.S. is not as costly on a comparative basis as it used to be." -- Rebecca Day Reproduced by permission of Warren Communications News, Inc., 800-771-9202, www.warren-news.com