China's near-monopoly on the rare earth minerals that are essential to so many high-tech products is about to be broken, if Molycorp Minerals LLC has its way. The Denver.-based concern is preparing to reopen a huge rare-earth mine at Mountain Pass, Calif., in the Upper Mojave Desert.

All it needs is $515m, according to chief executive officer Mark A. Smith.

The mining operation was shut down in the late 1990s, when a wastewater pipeline exploded during a cleaning. Since that time, says Smith, the facility has been processing existing inventory at the rate of about 3,000 tons a year, but hasn't been extracting new materials.

That explosion was felt in the boardrooms of countless makers of high-technology products, including cell phones, cars, computers, military hardware and wind turbines. The reason is simple: Mountain Pass is the only working source of so-called rare earth minerals in the western hemisphere. The alternative is China, which currently accounts for well over 90 percent of global production. And in recent years, China has been getting stingier about parting with that supply.

Molycorp purchased the Mountain Pass mine from Chevron Corp. in 2008. It has been laboring to resume full production since that time. Work has included the construction of on-site evaporation ponds, so that radioactive wastewater no longer has to travel 11 miles down the mountain to reach a dry lake bed.

Elimination of the lengthy pipeline will minimize the possibility of another mishap. In fact, says Smith, the whole operation has been redesigned to result in almost no wastewater discharge.

Environmental concerns can tie up a project like Mountain Pass for years, but Smith insists that the regulatory path is clear. "We have a 30-year mine plan approved, as well as an environmental impact report, and public hearings are done and behind us." Currently the company is taking another look at potential impacts, based on recent changes to the project. That review should be wrapped up within about two months, Smith says, "and we expect to have all permits by the end of this year."

The big challenge for Molycorp now is money. The company is in the midst of a capital-raising program to fund the restart. It has filed papers with the Securities and Exchange Commission for an initial public offering. It's also tapping the U.S. Department of Energy's loan guarantee program for clean, innovative energy technology, based on the argument that rare earth minerals are essential to the building of hybrid vehicles. Smith is confident that Molycorp will have the $515m lined up by the end of this year, for a January 1 start date. Construction should be completed in 2012, with production reaching an annual rate of 20,000 tons by the second half of that year.

All 15 of the rare earth minerals that have been identified (the actual number is subject to some dispute) are present at Mountain Pass. Nine of them are present in sufficient concentrations to be produced at the California site by 2012. "The ore grade at Mountain Pass is [of] absolute world-class status," says Smith.

Most "rare" earth minerals aren't actually that rare; the challenge lies in the cost of extraction and processing. So viable alternative sources are far and few between. New mines in Australia and Canada won't be up and running for some time. The typical time span from exploratory work to full production of rare earth ore is seven to 15 years.

That leaves China as the dominant provider of rare earth minerals - but not for long. Nevertheless, says Smith, Mountain Pass can't supply the world's needs all by itself. Molycorp has been working to raise public awareness of the importance of these materials to global high-tech supply chains. When I spoke to him, Smith was about to board a plane for Washington, D.C., to plead his case before lawmakers. (A proposed bill, H.R. 4866, would promote the development of domestic sources.) "We need to educate more and more people about how serious this issue is," he says.

In the short term, though, get ready for something that's really rare: a situation where China isn't dictating the terms of trade to the U.S.

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