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China's corner on world's rare-earth supply prompts action by US lawmakers

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Alarmed by the near total dependence of the US upon China for supplies of rare-earth minerals, the House Committee on Science and Technology approved legislation that would extend federal loan guarantees to help finance the development of technologies needed by prospective domestic producers of the 17 elements, which are essential for a wide array of military and civilian applications.

The bill, H.R. 6160, would authorize the Department of Energy to guarantee loans to US companies that want to mine rare earths but lack the technologies that are needed both to separate the desired elements from the chemically similar ores and to reduce the separated oxides to metals. Members of the House panel were especially concerned by news reports that China, which accounts for up to 97% of the world's supply of rare earths, had embargoed shipments of those elements to Japan in order to pressure that nation into releasing a Chinese fishing boat captain. While Chinese officials denied that report, the government-controlled China Daily has confirmed that exports of rare earths are being cut by 40% this year, compared with 2009 levels.

"We're dealing with a monopoly," committee chairman Bart Gordon (D-TN) said of China's market dominance during markup of the bill on 23 September. "I believe it would be foolish to stake our national defense and economic security on China's goodwill or a hope that it will choose to compete in a fair and open global marketplace for rare earths."

The Department of Defense is nearing the release of a congressionally mandated report on the national security impacts of US dependence. And the Senate Committee on Energy and Natural Resources has scheduled a hearing for 30 September at which it will take up a separate bill (S. 3521) that also would urge DOE to provide loan guarantees for domestic production of rare-earth minerals.

Molycorp, the owner of a rare-earths mine located at Mountain Pass, California, is planning to resume mining operations that were suspended in 2002, in the face of low-cost Chinese imports. Molycorp CEO Mark Smith told lawmakers in March that DOE had rejected the company's application for a loan guarantee because, Smith said, DOE didn't believe that mining operations qualified under the program (see Physics Today, May 2010, page 22).

With Congress set to adjourn in early October, the prospects for passage of any rare-earths legislation this year are uncertain at best. Still, Rep. Brian Baird (D-WA) was gratified by the House committee's approval of the bill by voice vote. "I just want to celebrate passage of this bill," Baird quipped as the gavel fell, recalling the hit single of the early 1970s rock band Rare Earth.

David Kramer

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