The second installment in our two-part rare earth minerals series. Read the first part.
While the topic of rare earth metals may seem obscure, for the high-tech industry it’s as important as the air we breathe.
“Rare earths are in many ways the oxygen of our high-tech society," said Jim Sims, a spokesman for the company Molycorp, which operates a rare earth mine in the Mojave Desert. It's the only one up and running in the U.S.
“Everything, from iPads to small laptops to high-efficiency wind turbines to many military and national security applications, require them," said Sims. "The list is long and extensive."
While most of us are unaware of rare earths, the subject will soon bubble up into the popular consciousness. This fall, Activision releases the latest version of "Call of Duty," its blockbuster video game. The storyline posits a hypothetical future in which China’s control over rare earth metals sparks war in Africa.
While war over rare earths doesn't appear to be in the cards, there is a very real struggle building. China has the largest known deposits of rare earths and it controls 95 percent of the world market.
Beijing has not been shy about exploiting its position. Japan felt the squeeze a year and a half ago when China tightened supply after a separate political dispute. That left Tokyo hunting for other sources of rare earths.
China’s market manipulation in the past also affected Molycorp’s mine in the Mojave. Ten years ago, the Chinese flooded the market “and quite frankly were able to run the California facility out of business," Molycorp’s Jim Sims said.
He added that the swings have been volatile.
“The increasing export restrictions China has put in place for its rare earth elements have caused prices to dramatically skyrocket and then drop back down. It’s made the market unpredictable. And for rare earth consumers it’s made it a little scary,” he said.
Sims said China is limiting exports because many of the gadgets that rare earth metals go in are made in China.
"They frankly want to keep those rare earths to themselves so they can use them for manufacturing in China," he said.
The U.S., Japan and the European Union have turned to the World Trade Organization on this issue. They lodged a complaint in March, accusing China of trying to lower costs for its manufacturers by restricting rare earth exports. A top Chinese official denied that Beijing is engaged in protectionism.
George Rossman is a geologist at Caltech. According to him, the tensions are likely to escalate.
“So the need for rare earths, the conflict between countries, the economic aspects are all going to get more interesting as we move forward in time," he said.
Meanwhile, Molycorp is vying to become a bigger player in the rare earth game. It resurrected its Mountain Pass mine in the Mojave last fall, and spokesman Sims said it’s spending nearly $1 billion on what he says will be a more efficient, environmentally safe way to extract the elements.
“We also expect to be the world’s lowest-cost producer of rare earths there at Mountain Pass," he said. "That’s because the technology we’re building into this new facility not only shrinks our environmental footprint, but it also lowers our costs — so much so, we fully expect to produce rare earths at a cost significantly less than it costs even the Chinese."
The company declined a request for a tour, citing safety concerns during construction. The promise to be environmentally safe is significant; nearly 15 years ago, Molycorp was forced to pay about $1.5 million in fines and settlements after leaky pipes sending radioactive water into a Mojave dry lake bed forced the company to suspend its operations.
In the meantime, China continues its push to acquire the raw materials of the high-tech age. And that has led to ever greater Chinese involvement in mining operations around the world.
One area where China is heavily involved is East Africa. KPCC's Shirley Jahad is traveling there as a recipient of a fellowship from the International Center for Journalists, the Ford Foundation and the Brooks and Joan Fortune Family Foundation.