Wed, Feb 23, 2011 - Page 7 News List

FEATURE: Company pushes to mine rare earths in Wyoming forest

RACE TO THE BOTTOM:As China reduces its exports of rare earth elements, a mining company has secured mining claims in the US Black Hills National Forest

AP, SUNDANCE, WYOMING

A Canadian company hoping to compete with China’s near-monopoly of rare earth elements — metals critical for everything from US military weaponry to wind turbines — wants to open a strip mine inside a national forest in northeast Wyoming.

Processing raw ore into rare earths is an intensive operation that has been associated with radioactive water spills. However, with China slashing exports of rare earths and Washington concerned the US military could face a shortage of materials for lasers, smart bombs, guided missiles, night-vision goggles and jet engines, Don Ranta is optimistic about his Black Hills National Forest mine proposal.

“Everything we’ve seen so far looks very, very bullish for it to be a commercial project,” said Ranta, CEO of Vancouver, British Columbia-based Rare Element Resources.

If approved and if it goes into production, the mine would be located about 25km from Devils Tower National Monument, the US’ first national monument.

For its particular combination of rare earths, Wyoming’s Bear Lodge Mountains rank close behind a mine at Mountain Pass in southeastern California as North America’s best verified source of the minerals, said John Kaiser, editor of the Kaiser Bottom Fish Web site, which tracks global metals markets and mining companies.

“In the long run, I think it will end up being even bigger than Mountain Pass,” Kaiser said.

Rare earths are 17 minerals used to make many products that didn’t exist all that long ago. Neodymium is used to make magnets in the electric motors of hybrid cars. Europium goes into compact fluorescent bulbs.

Rare earths with critical military applications include samarium, used for super-strong samarium--cobalt magnets that help steer guided missiles.

The General Accounting Office, Congress’ auditing arm, reported in April that the navy’s Aegis Spy-1 radar, expected to be used for 35 years, uses samarium-cobalt magnets that will need replacement during the system’s service life. Defense contractors use China--supplied neodymium magnets in motors used to build fuel-saving hybrid electric drives for US Navy destroyers, the office reported.

Rare earths aren’t scarce. However, few places exist with enough concentrations to mine profitably, and they are difficult to isolate in a purified form.

Cheap labor and low environmental standards enabled China to dominate the rare earths market starting in the 1990s, and the country currently supplies 97 percent of the world rare earths market.

However, even as demand soars for rare earths, China is cracking down on rare earths smuggling and cutting legal exports. Together, that will reduce the global rare earths market by 25 percent.

The result will likely be dramatically less rare earths on the global market, Kaiser said, until new sources can be mined.

Global rare earths prices have soared in recent months, in some cases up to six-fold. Last month, US President Barack Obama signed a defense spending authorization ordering US Secretary of Defense Robert Gates to ensure US access to rare earths.

Mountain Pass is the only US mine producing rare earths. Mining there ceased because of heavy Chinese competition in 2002 and only resumed in December amid the much-improved market outlook.

In 1998, Greenwood Village, Colorado-based Molycorp Minerals Inc, operator of the Mountain Pass mine, paid a US$410,000 fine after being accused of spilling 1,325m3 of wastewater from the facility.

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