In earlier posts, I outlined the background leading to the current Chinese monopoly in the rare earth element (REE) market, and why prevailing beliefs in the U.S. that private investment and opening of new domestic mines; low REE defense use; and individual metal, technology, or finished-goods development cannot solve the problem. Further illustration of this dependence emergency can be seen in recent reports of Lockheed Martin facing Chinese sanctions, which are likely to restrict the supply of REEs crucial to advanced weapons production.
In this article, I outline the steps necessary to developing a research-and-development partnership among the private sector, government and academia, to wrest control of the REE supply chain from China.
The U.S. needs to treat the REE resource holistically, as a national economic and security issue. It must develop, based on national policy, an REE supply chain, starting with raw materials, sourcing, refining, distribution, fabrication, and recycling. Downstream users of these raw materials and alloys, including component manufacturers, must be part of the chain. And it must be accomplished by a government-led effort. Senate Bill S. 2093, introduced on July 11, 2019, for the establishment of a thorium-bearing rare earth refinery co-operative, is a good first step.
The important components of this supply chain are described below.
Materials exploration. Make REEs a byproduct material from other mining activities, such as phosphates and iron ore. The REE mining investment cost is much smaller, and only for downstream purification. The U.S. Geological Survey has conductive extensive chemical analysis of 23 sedimentary phosphate deposits (phosphorites) in the U.S., with results demonstrating significantly enriched REEs in these ores. Phosphorite is the world’s principal source of phosphorus fertilizer. Thus, REEs can be a byproduct of the fertilizer industry. The investment cost of product value-added REEs will be significantly lower, as the primary mining and initial recovery processes already exist.
Cooperatives focused around REEs as a national security and economic policy should be set up to utilize the byproduct feedstock of the fertilizer industry. This concept should also be investigated for other mining areas, such as iron ores.
Exchanges. As an extension of the cooperative, electronic buy-sell exchanges should be set up for commercial transactions among members and non-members. These exchanges should draw on existing concepts used by, for example, health information exchanges. One benefit of the exchange will be to create capabilities for tracking supply and demand, while balancing against national needs and material allocation in times of crisis.
Substitutions and substitutive technologies. A national initiative under the auspices of DARPA, the National Science Foundation, or similar government or defense agencies, should be chartered to intensively explore possibilities for material and technology substitutions for REEs. Where no direct element replacement is available, systemic substitutes should be investigated. One idea is to consider the share of REEs in applications, and target high-percentage uses. For example, neodymium is used in about 69% of permanent magnets, and cerium in 90% of auto catalysts. What kind of substitutes might be feasible, and how can substitutive technologies be used to remove REEs from the supply chain where possible? These are questions better answered by sustained government and R&D efforts, through appropriate agencies and funding. Given the current state of the REE industry, it’s highly unlikely that private industries will spearhead this type of research. Once its value is proven, however, they will likely join.
The U.S. should actively encourage extensive development of REE programs, both through research and teaching, at its universities. Currently, only a few institutions offer dedicated REE teaching programs, and related R&D activity is minimal. Joint support for innovation should be encouraged in mining techniques and technology by collaborative government, academia, and industry partnerships, with the goal of improving both industry and education at the graduate, undergraduate and community college levels. University faculty and departments should be encouraged to pursue cutting-edge research, to bolster the nation’s ability to meet future demand for mineral supply-chain sector engineers, and cope with faculty retirements.
Renewables and EV impact. It’s often said that REEs are indispensable for high-technology products and renewables. However, the actual share of technologies requiring REEs hasn’t been clearly documented. For example, how can asynchronous wind technology not containing REEs be extended? Or, with the growing popularity of electric vehicles, how will the declining need for cerium for catalytic converters be balanced against the increased need for EV batteries? An analysis of material requirements, based on new technology, market trends, and substitutive capabilities, can greatly assist in limiting the demand of REEs.
Strategic stockpile and inventory management. Similar to the national petroleum stockpile, the U.S. should develop a national REE stockpile program. This can work in cooperation with the exchange framework. Again, it must be stressed that this is a national security and economic policy priority, and there should be no place for ideology or partisanship.
Sharing of critical competencies. An integral part of the cooperative framework is an explicit requirement for sharing knowledge and critical competencies among members. For example, an EV maker should be able to cooperate with the battery supplier.
Governance. Governance of the supply chain, while spread among multiple components, should be driven by an overall national structure.
Because the above elements involve many stakeholders, a governance and management structure should be created to ensure the common objective among stakeholders of creating a national REE supply chain. This is a better alternative than relying on Pentagon awards for the opening of individual mines, or similar single initiatives. What’s needed is the entire might of this country — government, private sector, and universities — aligned toward achieving REE independence.
Shubho Chatterjee is a digital transformation, strategy, technology and operations executive.