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US & EU Waking Up to Critical Shortfall in Strategic Metals
On March 17, Rep. Mike Coffman introduced the Rare Earths Supply-Chain Technology and Resources Transformation Act of 2010 (RESTART Act) that aims to reestablish a domestic rare earth supply chain in the US. Rare earth materials are being increasingly used for technological innovation in industry, weapons systems, and in renewable energy generation. The US, however, is completely dependent on imports and any disruption in the supply chain could rock the national security and employment boat.
Coffman pointed out that China currently produces over 97% of the global rare earth materials. With no mining taking place in North America and the worldwide demand for rare earths growing exponentially, Coffman alerted the House to the looming crisis that could be warded off if the US acted immediately. He said that the nation had the resources but lacked the ability to extract and process them.
The RESTART Act aims to change the situation by supporting the growth of a domestic supply chain over the next five years through various activities. The Act seeks to classify rare earth elements as critical or strategic to national security.
The United States Magnet Materials Association (USMMA), an association of the major magnet producers and suppliers, has been closely following the proceedings and in a March press release, USMMA stated, “USMMA believes that urgent and collective action is needed by the federal government in order to head off the impending rare earth crisis. It is estimated that Chinese domestic consumption of rare earth materials will outpace Chinese domestic supply as early as 2012. With a three to five year timeline to reestablish a domestic rare earth supply chain, the United States is already in a ’silent crisis’. It is unclear whether rare earth material will be available outside China in the coming years.”
On June 22, US Senator Lisa Murkowski introduced legislation to promote the same concept and help the US regain its leading position in the rare earth production sector. She said, ” We have slowly but surely surrendered the front end of the clean energy supply chain. Unless action is taken, we will trade our current dependence on foreign oil for an equally unsettling dependence on foreign minerals.”
Industry lobbyist Jeff Green said, “This is a tremendous step in the legislative process and immeasurably increases the bill’s chances of being enacted. With the bill’s introduction in both the House and Senate, the USMMA’s vision for a competitive domestic rare earth supply chain is one step closer to reality.”
A European Commission task force recently released a report in Madrid, which claims that several developing nations exclude others from accessing their resources through a variety of investment, tax and trade regulations.
The task force listed 14 ‘critical’ materials that could soon be in short supply unless the trade and policy measure of the European Union were modified to ensure steady imports and promoted their domestic exploration and recycling. The report states that EU economies would be hurt if the materials were inaccessible either due to shortage or export embargo, given that they are produced in a handful of nations only. The list includes antimony, beryllium, cobalt, platinum group metals, and rare earths.
Although lithium is not included, EC spokesman Fabio Pirotta believes that may soon change if the use of lithium in electric vehicles increases dramatically. The increased use of the materials in new and emerging technologies lends to the idea that demand for them could triple by 2030. Brazil, China, Congo and Russia are the largest producers of these materials.
Antonio Tajani, Vice President of the EC, said, “We need fair play on external markets, a good framework to foster sustainable raw materials supply from EU sources as well as improved resource efficiency and more use of recycling.”
Although stockpiling has not been recommended as a policy action, Pirotta said, “Nothing included in the report but that does not mean it won’t be a tool.”
Source: Critical Strategic Metals
