RARE EARTH ELEMENTS: U.S. STARTUPS SEEK TO CLAW BACK CHINA'S SHARE OF TECHNOLOGY MINERALS' MARKET.

• Author: Magnuson, Stew

MOUNTAIN PASS, Calif.--Atop an arid mountain about an hour's drive from Las Vegas, an excavator scooped up giant boulders mined from a nearby open pit and dumped them into a machine designed to reduce them to pebbles about the size of a marble.

Down in the pit, some 500 feet below, miners were preparing explosive charges that would blast basalt out of the mountain later that afternoon. Inside that rock were rare earth minerals, 1 7 different elements valued as building blocks for some of today's most ubiquitous technologies--everything from electric cars to smartphones.

Despite all the activity and the dozens of workers moving tons of material at the site, Michael Rosenthal, chief operating officer of MP Materials, said mining is only about 10 percent of what the company did there.

"The rest is chemistry," he said.

The Mountain Pass mine has existed for some 60 years and is the only one of its kind currently in operation. It's renowned for its high concentration of rare earth elements, sometimes called the "technology minerals."

The elements that occupy 17 spots on the periodic table are categorized as "strategic minerals" by the U.S. government and therefore considered vital for national defense. Along with smartphones, they are used in fiber-optic cables, medical devices and high-performance magnets, which are needed in a host of machines, including jet fighters, wind turbines--and most importantly on the commercial side--electric vehicle engines. (See "Rare Earth Elements 101" on page 28)

"From an economic security perspective and defense perspective, magnets are very, very important to national security," Rosenthal said.

The problem is that China has a near monopoly on the complex process of separating 16 of the 17 elements currently used in these technologies from the source material and refining them to a point where they can be made into useful metals and materials.

The Biden administration's 100-day review, "Building Resilient Supply Chains, Revitalizing American Manufacturing and Fostering Broad-Based Growth," released in June, devoted an entire section on strategic and critical materials and minerals, including its thoughts on rare earths.

"The United States imports substantially greater quantities of rare earth elements in value-added products.... Implicit in this trade phenomenon is the gradual decline in value-creation, innovation, research and human capital development," it stated. That imbalance with China will only increase with the expected growth of green energy technology such as electric vehicles and wind turbines, the review added.

"Rare earths" are a misnomer and are not that rare. China does have an abundance of them, but they are also found in concentrations high enough to mine in several U.S. states and other nations throughout the world. They are further divided into two categories, light and heavy, with the heavier ones considered more difficult to refine and thus, more valuable.

MP Materials--along with three other companies interviewed--are seeking to exploit the abundance of rare earths found in the United States and to end China's monopoly on their refinement and return some of the market share back to the United States.

Separating the elements from the...