Clean Up the Critical Rare Earth Supply Chain

In 1969, the Cuyahoga River caught fire, and the United States then took serious steps to reduce and clean up pollution caused by industry. The benefits of these steps are obvious: American air and water are cleaner; the American population is physically healthier. Looking abroad, though, it is obvious that significant sources of pollution were not eliminated so much as redistributed to countries with less-stringent environmental protections. American consumers, up to and including the Department of Defense, should consider how they can better acquire certain materials, notably rare earths, from cleaner and more reliable sources.

For most of the latter half of the 20th century, the United States was the leading producer of rare earths, mostly from the Mountain Pass mine in California. By the late 1990s, however, the mine was struggling to remain profitable against Chinese competition. In 2002, the mine was finally shut down. It has been opened sporadically since, but it will never again be the leader in global rare earth production.

Meanwhile, China heavily invested in rare earth mining and production. Whether or not Deng Xiaoping actually said, “there is oil in the Middle East; there is rare earth in China,” it is obvious that Chinese industry, with significant assistance from the Chinese government, has quite deliberately become the world’s dominant supplier. By 2010, China was estimated to control 95% of the global rare earth supply, with 100% dominance at certain points in the supply chain.

While Chinese leaders have profited, the people and land surrounding the rare earth mines have suffered. The harsh acids and radioactive byproducts of legacy rare earth mining processes have ripped through the local countryside and population. “It feels like hell on Earth,” said Tim Maughan in 2015. In July, the Los Angeles Times reported that conditions in some areas were so bad, with “gaping pits of contaminated wastewater” in farms and villages, that local villagers were refusing to send their children to school.

Were this to happen in the United States, outrage would soon follow. Congress would demand investigations. Customers of any miner that operated in such a fashion would face public relations challenges and pressure to divest. And government investigators would soon be building cases. But because this environmental disaster is happening so far away, in a country that restricts the free flow of information even as it digs deeper and faster for critical materials, the U.S. government and public have been content to ignore the problem. Cheap Chinese rare earths keep the monetary costs for advanced electronic systems low, even if the nonmonetary costs require us to avert our eyes. It is one of the ironies of the rare earth supply chain that the materials needed for green energy, such as in wind turbines, are currently being acquired by destroying the Chinese countryside.

The U.S. government should show leadership and make a deliberate choice to encourage more responsible rare earth sourcing. There are technologies and mine sites in the United States and other environmentally responsible countries that are worth investigating and developing if they will reduce the damage associated with current methods of rare earth production. Consumers should be willing to pay a slight premium to incentivize this investment. The U.S. military, which spends relative pennies on rare earth materials per year, should certainly be interested in solutions that not only reduce environmental damage but also reduce Chinese leverage on U.S. national security.

In the last two decades, we have become uncomfortably aware of the ways that Western nations have exported the harms associated with raw materials production, in arenas ranging from diamonds to consumer electronics. We have also seen a renewed appetite for the United States and other countries to move towards more sustainable economies and environmental policies, such as the recent climate protests and the voyage of Greta Thunberg. A true green revolution will force us to address the externalities of foreign extractive industries in order to build an economy that sustains opportunity for life and growth for the maximum number of people. In 1969, the nation took action to clean up runaway industrial pollution; 50 years later, the call is no less urgent.
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Jeff Green is president of J.A. Green & Company. He founded and currently serves on the Strategic Materials Advisory Council, and previously served as staff director to the House Armed Services Subcommittee on Readiness. Ryan Caldwell is vice president at J.A. Green & Company.

This post was originally published on RealClearEnergy.org on December 19, 2019.