Coal ash could be the next source of elements the U.S. defense industry uses in everything from night vision goggles to gyroscopes for smart bombs.
The Senate Committee on Armed Services included a provision in its recent markup of the 2020 defense budget authorizing an increase in funding for the Pentagon to develop capabilities to produce rare earth elements from coal ash, the remnants of burned coal, as China threatens to restrict supplies.
“[Y]ou need to make sure you have either [a] stockpile or access to them,” acting Deputy Secretary of Defense David Norquist told the Washington Examiner. “And so that’s an area where, as you look across the system, and you look at your future production, [you] question: Do I have those? Do I have enough of them? Do I have access to them? Where are they produced? And I think that’s a proper place for the Congress to have focused on.”
A 2016 Department of Commerce survey found 66% of respondents, most of them Department of Defense vendors, imported rare earths. Rare earths like neodymium and dysprosium may not be household names, but they are found in everything from cellphones to F-35 fighter jets — and China is the world’s premier supplier, producing 70% of the world’s supply in 2018, according to the U.S. Geological Survey.
The country has threatened to throttle supplies of rare earths as it battles the Trump administration over trade policies.
“I think part of the reason we’re seeing them threaten it is that they don’t have a ton of other points of leverage the way the U.S. does,” said Zack Cooper, a research fellow specializing in U.S.-China competition at the American Enterprise Institute. “The U.S. has control of not just the financial system, in large part, but also almost everything that’s traded in the world is traded with dollars … So they’ve got to find the places where they have an asymmetric edge, and this is one of the few, so I am not surprised that they are threatening to use it.”
Contrary to their name, rare earths are fairly common. But they are scattered across the earth’s surface in trace amounts that are extraordinarily difficult to separate from surrounding ores. This makes rare earth production not only costly, but extremely dirty. Extracting them involves a variety of processes harmful to the environment. Because there is little profit to be made in rare earths, the last U.S. mine closed in 2015.
China, home to about one-third of the world’s rare earth reserves, has cornered the market by subsidizing production and accepting environmental costs. Last year, it produced 120,000 metric tons of rare earths, compared to the 15,000 tons produced in the U.S.
China has already shown it is willing to use its rare earths advantage as a weapon. Beijing cut off rare earth exports to Japan during a dispute in 2010, scaring markets.
“It sent a shock wave through Japan because this was going to affect their supply chain for a number of things like computers and cellphones,” said Dean Cheng, a senior research fellow specializing in Chinese military capabilities at the Heritage Foundation. “But it was also the first time that the Chinese have actually done something that people had worried about, but never seen, which is would they ever use their economic power for political purposes.”
That embargo was lifted in 2015, but the message to countries reliant on rare earths was clear: China might not be a reliable source. This, experts say, is likely why the Congress has taken up the issue. It’s also why they are focusing on coal ash, which contains traces of rare earths, as the solution.
The U.S. produces nearly 80 million tons of coal ash per year from which rare earths could be derived, according to Rochester Institute of Technology researchers.
“[Rare earth elements] from coal ash is technically feasible, but [it’s] not clear how much it will cost compared to other options,” Eric Williams, one of the researchers, told the Washington Examiner.
The government has already invested in some coal ash extraction methods, though none have proven to be commercially viable. But Williams and his fellow researchers believe a method using compressed carbon dioxide to extract rare earths, similar to how caffeine is removed from coffee beans, could be an affordable solution. They also argue it could be beneficial to the coal industry as the country moves away from coal power plants.
Even if China were to cut off rare earth exports, some experts believe the impact may be limited considering Beijing already showed its hand once before. Some countries like Brazil and Vietnam have taken an interest in exporting rare earths, presenting a potential alternative supply chain.
