US manufacturers urge Congress to act soon on rare earths production

12 July 2012 19:22  [Source: ICIS news]

WASHINGTON (ICIS)--US manufacturers on Thursday urged quick action by Congress to revive domestic production of rare earth elements (REEs), warning that critical shortages and rising prices for those raw materials threaten industry and jobs.

In letters to all members of Congress, the National Association of Manufacturers (NAM) urged prompt approval for HR-4402, the “National Strategic and Critical Minerals Production Act”, which would give rare earth elements a priority designation under federal law for accelerated permitting by federal, state and local governments.

“Manufacturers are facing a shrinking supply and record demand for essential rare earth minerals,” said Aric Newhouse, NAM senior vice president for government relations.

“We have these resources in the US, but the approval process domestically is overly burdensome and prohibitive, often requiring obtaining permits at the local, state and federal level, which can take up to six years or longer,” he said.

“This burdensome bureaucratic process is a big reason China controls more than 90% percent of the world’s supply,” he noted.

He said that HR-4402 would cut red tape, which has slowed domestic production to a halt, and allow renewed mining of the critical materials sooner.

The 17 chemical and mineral substances known as rare earths are crucial to refining, petrochemicals production and other industries, such as manufacture of weapons and space systems, lasers and fibre optic communications, to name but a few applications.

Despite the name, rare earth elements are not actually rare – most of them are found in almost any soil around the world – but extremely rare are those areas in which these substances can be found in concentrations that make mining them commercially feasible. China supplies about 90-95% of rare earth elements worldwide.

At present, there are only two places in the world other than China where rare earths can be found in such economically viable concentrations: one is in a remote part of Australia, and the other is in Mountain Pass, California.

The US used to produce all the rare earths it needed up until 2002 or thereabouts when the Mountain Pass rare earths mine was shut down, in part because high federal and state corporate taxes and tough California environmental laws made the mine uncompetitive with much cheaper rare earths mining and production in China.

Newhouse warned that failure to secure access to rare earth minerals at a reasonable cost will place more US manufacturing jobs in jeopardy.

Rare earth elements and other critical minerals are critical to wide range of manufactured products, including renewable energy products, magnets, chemicals, refrigeration systems, catalysts for petroleum refining, defence applications, consumer electronics, hybrid car batteries and many more.

HR-4402 would require that a single lead agency with regulatory over rare earths mining and production help coordinate permitting approval with other federal, state or local government agencies, and it would reduce what NAM termed frivolous lawsuits.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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