One company sees a business opportunity in the United States’s reliance on China for rare earth elements, such as dysprosium, terbium, and yttrium, crucial for the proper functioning of night vision goggles and wind turbines, among scores of other kinds of important hardware.
There are 17 metals called rare earth elements, also referred to as REEs. China has dominated the rare earth market for years and accounts for about 80% of U.S. imports of rare earth metals and compounds. Demand for the metals is only growing as clean energy products such as wind turbines and electric cars, which use the metals, become more popular.
UCore aims to rip that hegemony away from China.
“It’s a pretty dangerous spot to be in,” UCore interim CEO Pat Ryan told the Washington Examiner. “It’s quite an imbalance, and it’s got to be corrected, or the technology will continue to evolve with control by China.”
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The company is aiming to build one of the first U.S. rare earth separation facilities and plans to do so in Ketchikan, Alaska. The facility will use cutting-edge technology to separate out the critical elements from feedstock shipped in from U.S.-allied countries. Once UCore is bringing in revenue, it plans to open its nearby Bokan-Dotson Ridge mine and use ore from there to form a completely domestic supply chain.
There is currently only one functioning U.S. rare earth element mine, Mountain Pass in California. That mine, which is operated by MP Materials Corp., produces light rare earths but still ships the raw product to China for separation, although it has plans to build a separation facility. UCore has taken the opposite tack of Mountain Pass and plans to first open up a separation facility and then integrate a mine.
Ryan, who called rare earths “the new oil,” highlighted the anticipated explosion of growth in the electric vehicle industry over the next decade. He said that if the U.S. doesn’t produce the critical minerals needed to drive the electrification of vehicles, jobs could be lost to China.
If the U.S. wants to be successful in building green infrastructure, it needs rare earths. IHS Markit projects global sales of the vehicles to top 12.2 million by 2025, indicating a nearly 52% annual compounded growth. The U.S. projects that wind energy will also grow over the next decade, and permanent magnets are a crucial component of many wind turbines.
REEs are also used in defense technology, and some in Washington, D.C., are fearful that China could use the metals as leverage over the U.S. in the future. Last month it was reported that the Chinese government has been interested in the effect cutting off rare earths to the U.S. could have its production of F-35 fighter jets. China is also reportedly conducting a review of how it can leverage rare earths during a trade war.
Sen. Marco Rubio has been a major proponent of combating China’s dominance over the world’s supply of rare earths and has introduced legislation that seeks to grow domestic independence.
“China’s near-monopoly of the rare-earth supply chain, including its control of the vast majority of the world’s rare-earth metallurgical manufacturing capacity, is a major threat to our national security and economic security,” the Florida Republican told the Washington Examiner.
“To truly secure our rare earth supply chains, the United States must ensure domestic metallurgical manufacturing capabilities,” he added in a statement.
Republican Sen. Ted Cruz of Texas also introduced legislation that seeks to end U.S. dependence on China. He recently wrote an opinion piece discussing the importance of the matter with Alaska Gov. Mike Dunleavy, which mentioned UCore’s planned separation facility.
“Sen. Cruz believes it is essential that we end China’s control over the supply chain for rare earth elements and critical minerals and bring it back to the United States,” a spokesperson for Cruz told the Washington Examiner. “Mines in Texas and Alaska and elsewhere will prove absolutely crucial to that effort.”
Following a bipartisan meeting with lawmakers last month, President Joe Biden ordered a 100-day review of domestic supply chains, which includes determining U.S. vulnerability in the rare earth industry.
Despite anxiety about China from some political figures, Nick Loris, an economist at the Heritage Foundation who focuses on energy and environmental policy, told the Washington Examiner that China is “really a paper tiger” when it comes to rare earths and that the threat is being overblown.
Loris pointed out that, in 2010, China was accused of withholding the metals to Japan over regional tensions. He said what that led to was market forces working and “a differentiation of supply in a relatively short amount of time.” Loris said that China’s production of rare earths went down more than 20% as markets diversified in response.
Loris did say that he thinks demand for REEs will grow in the coming years and that with that growth will likely come increased interest and production within the U.S., an opportunity that UCore is banking on.
Ryan told the Washington Examiner that UCore’s separation facility will first use U.S.-allied feedstock in order to start competitively generating heavy-rare earth and light-rare earth oxides and is looking into partnerships downstream that can help produce metals, alloys, and magnets.
UCore has touted the separation technology that it plans to use at the facility, something called rapid solvent extraction, or RapidSX. The technology is owned by Innovation Metals Corp., which was acquired by UCore last year and “significantly reduces” the time it takes to separate the rare earth elements and the separation facility’s footprint, according to the company.
Ryan said that the separation facility will start by producing 2,000 tons of throughput per year, with the ultimate goal of growing that number to 5,000 tons. The initial throughput of the facility could supply enough dysprosium for 1 million electric vehicles and, at peak, something like 3 million electric vehicles, the CEO said.
UCore and MP Materials (which already operates the Mountain Pass mine) aren’t the only companies eyeing U.S. mining and production of rare earth elements.
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Texas Mineral Resources Corp. and USA Rare Earth are working on a rare-earth project in Texas. They opened a pilot processing plant last year in Colorado and also intend to create an entirely domestic supply chain with feedstock from a mine in the Lonestar State. Additionally, Australia’s Lynas, the largest producer of rare earths outside of China, signed a deal with Blue Line Corp. to process rare earths in Texas.
