Howard Swint: Alternatives and solutions for rare earth elements

The rapidly changing geopolitical landscape surrounding rare earth elements has resulted in a number of public and private sector initiatives that seek to lessen the stranglehold China has on the marketplace.

With an estimated 70 percent of total world production and 85 percent of processing capacity, China has all but cornered the global supply chain for the strategic minerals and has further demonstrated their willingness to use them for political gain.

The most recent threat has come on the heels of the ongoing trade war with the Trump administration, while the most incisive market interference occurred in 2010 when Beijing embargoed exports to Japan over an ongoing dispute centered on territorial islands.

That action roiled markets, especially for those enterprises dependent upon these so-called “vitamins of industry” and sent shockwaves through corporate boardrooms.

So, too, with the U.S. Department of Defense and their contractors, as virtually every modern communications, guidance and weapon system necessarily requires their use.

Chief among the private sector counterplays to China’s domination of these minerals is Greenland’s Kvanefjeld Plateau project that the U.S. Geological Survey estimates holds over a billion tons of reserves, including promethium, the rarest element that forms from the degradation of uranium.

However, China tactically holds a majority shareholder stake in its ownership consortium, which is in keeping with their strategic plan to control the vertically integrated global rare earth supply chain.

Another is the $4 billion joint Australian-United States venture in western Australia, where an estimated 10 percent of global rare earth elements are situated, while still another Chilean mine reportedly has a high concentration of the series used in high-capacity magnets.

While there is to some degree competition to Chinese supply, the production calculus of rare earth elements is more a matter of economics, with huge environmental costs the leading coefficient and driver for profitability.

That’s because massive amounts of waste overburden with toxic tailings are generated from both hard rock- and clay-based mining, which necessitates industrial-scale mitigation efforts in countries that have strict environmental laws.

But in countries where lax or unenforced environmental laws are the norm, competitive advantages are accrued and skew the market against both existing mining firms as well as new entrants.

The best example is Molycorp, the last U.S.-based rare earth mining company that was bankrupted in 2015 due largely to environmental reclamation costs at its Mountain Pass, California, mine.

At the end of its run with liabilities of over $1 billion, cheap supply from Chinese sources coupled with commodity price manipulation undermined their position in the international marketplace, despite standing contracts with defense industries and the U.S. strategic mineral reserve.

From that point forward, U.S. national security positions from both public and private sector perspectives were effectively compromised, given rare earth elements’ ubiquity across virtually every high-tech platform.

Today, an urgent effort is underway to find alternative metallurgical compounds that can serve as functional substitutes such as paramagnets produced from iron germanium and cerium cobalt that significantly extends the use of cerium, the most abundant rare earth element.

Production from the recycling of spent material is also beginning but the most promising alternative source to primary mining could come from culling rare earth elements from the nation’s abundant coal-based waste stream including fly ash impoundments and their effluent.

U.S. Senate Bill 1052 — Rare Earth Elements Advance Coal Technology Act — introduced by Sen. Joe Manchin, could prove the key, as it provides funding for pilot-scale, advanced-separation techniques for a wide variety of waste material, including acid mine drainage.

Ironic that hazardous wastes could turn out to be the essential feedstock for the nation’s high-technology future and, through S.B.1052, generated through an industrial-scale environmental remediation effort.

Howard Swint is a commercial property broker who can be reached through Howard.swint@colliers.com

Funerals for Saturday, December 14, 2019

Akers, Trela - 1 p.m., Tyree Funeral Home, Mount Hope.

Cochran, Jacob - 3 p.m., Gatens-Harding Funeral Home, Poca.

Cosby-Matthews, Hattie - Noon, First Baptist Church of Charleston, Charleston.

DeMarino, Jane - 1 p.m., John H. Taylor Funeral Home, Spencer.

Gunther, Jewell - 1 p.m., Calvary Baptist Church, Chapmanville.

Hall, Betty - 1 p.m., St. Andrew United Methodist Church, St. Albans.

Holbrook, Linda - 1 p.m., St. Andrew Presbyterian Church, Pinch.

Johnson Jr., Delbert - 11 a.m., Allen Funeral Home, Hurricane.

King, Edna - Noon, St. Christopher Episcopal Church, Charleston.

Kiser, Kenneth - 6 p.m., Cunningham-Parker-Johnson Funeral Home, Charleston.

Lawrence, Mamie - 2 p.m., O’Dell Funeral Home, Montgomery.

McCutcheon, Alice - 1 p.m., Old Greenbrier Baptist Church, Alderson.

Mills, Melinda - 5 p.m., New Baptist Church, Huntington.

Rannenberg III, Thomas - 2 p.m., Keller Funeral Home, Dunbar.

Ray, Sandra - 1 p.m., Crooked Creek Church of Christ.

Roach, James - 1 p.m., First Baptist Church, Ravenswood.

Tyler, Gloria - Noon, Grace Bible Church, Charleston.

Ulbrich, Sandra - 11 a.m., Handley Funeral Home, Danville.

Williams, Laura - 2 p.m., Stockert-Paletti Funeral Home, Flatwoods.

Wood, Ruby - 11 a.m., Good Shepherd Mortuary, South Charleston.