Critical Minerals: Rare Earths and the U.S. Economy

Rare earths are 17 elements in the Earth’s crust used in a variety of applications, from hybrid cars and x-ray units to cell phones and wind turbines. Unfortunately, the United States is largely dependent on China for these critical minerals,posing a serious threat to the American economy.

Despite their name, rare earths (REs) are relatively abundant.  However, they are generally not concentrated together, making extraction expensive and often uneconomical.  While the United States has 13 percent of the world’s rare earth reserves, China dominates the industry with an estimated 50 percent of global RE reserves and 95 percent of all RE production. Currently, the United States has only one fully operating mine — the Mountain Pass mine in California — but it largely lacks the capacity to process the raw materials into finished components.

Not only are REs widely used, they have few substitutes:

• Europium is used as a red phosphor in color cathode ray tubes and liquid crystal displays. It costs $2,000 per kilogram and there is no substitute.
• Erbium is used in fiber-optic telecommunication cables as laser amplifiers. It costs an average of $1,000 per kilogram and there is no substitute.

Supply cuts could be devastating to certain sectors, especially the defense industry:

• Advanced jet aircraft engines depend upon yttrium thermal coatings to shield metal components from extreme heat.
• Rare earth permanent magnets that utilize neodymium move the fins of precision-guided munitions.
• Military radar and detection systems us neodymium, yttrium, lanthanum, lutetium and europium to amplify sounds and improve signal resolution.

Lawmakers have drafted legislation to improve the regulatory process relating to mining in order to jumpstart investment and encourage the development of an American rare earths supply chain.

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