Rare earths aren't a celebrity security scandal like blabbermouth Edward Snowden, but these 17 minerals, which are essential for advanced energy technologies, new healthcare tools and cutting-edge strategic weapons systems, are dominated by the Chinese.
America was once the world leader in rare earth output. Now we're 95 percent dependent on China. That's a shadow scandal begging for some light.
Rep. Mike Coffman, R-Colo., recently wrote that the action video game, "Call of Duty: Black Ops II," has a plot focused on a "cold war" between the United States and China over access to rare earth materials. The game designers provided several player options for winning that video war — unlike President Obama.
Coffman thinks it's "unclear whether the Obama administration, which is neglecting proven mining and development strategies that could develop a domestic rare earth supply, is playing to win in the real world." Obama's Defense Department seems okay with our vulnerability.
Obama must be oblivious to Deng Xiopeng's cryptic 1992 prophecy, "There is oil in the Middle East; there is rare earth in China." With vast rare earth deposits and power rather than profit in mind, China began supplying the Free World's needs at dirt cheap cost that the free market could not match.
The goal was to bring the entire rare earth supply chain into China's control: mining, refining, processing into metal alloys, manufacturing finished products — and direct supply of bolt-on-ready components — then force energy, healthcare, and defense industries to move their advanced manufacturing to China, as Japan's Toyota has done.
Obama is so submissive to Big Green's anti-development demands that it is impossible under his regime to develop anything in the rare earth supply chain — no mines, no refineries, no metal alloying mills, no component factories. The Catch 22 is that even if he was bold about it, the economics of China's stranglehold would defeat us.
Since China temporarily yanked Japan's rare earth supplies over a 2010 boundary squabble, the supply question has become stark. Molycorp Inc. — the only domestic producer of rare earth oxides -- and its Canadian acquisition, Neo Material Technologies Inc., send MolyCorp's U.S. oxides through Neo to Chinese processing plants.
The Congressional Research Service recently noted that such rare earths are subject to Chinese export restrictions should U.S. industry need them back. Would they be allowed to return to the United States? We don't know.
The irony, rare earth mine owner and industry consultant Jim Kennedy told me, is that there are enough rare earths waiting to be mined -- and already piled up in American throwaway mine tailings — to supply the world. The tailings were dumped because the highest-value rare earth ores occur with small amounts of thorium, a minimally radioactive mineral too weak for use in a nuclear bomb. Thorium is not hard to remove, but the liability burden for removing and safely storing pure thorium has relegated the ore to mine tailings.
Stockpiling rare earths is silly: What would we do with them with no processing infrastructure? Much as I dislike public-private projects, I don't see another solution than a consortium. In the U.S., it would require federal sanction for private rare earth interests in the U.S. and possibly internationally to form a cooperative that shares the cost of setting up the full family of processing facilities to get the full value of our abundant U.S. deposits.
The details are fuzzy, but key members of the Armed Forces House and Senate Committees have been bouncing the idea around. U.S. Senator Roy Blunt, R-Mo., isn't ready to introduce a bill yet, but told me, "By encouraging the domestic production and refinement of rare earth minerals, we can reduce our dependency on other countries and encourage economic development here in the U.S."
RON ARNOLD, Washington Examiner Columnist is executive vice president of the Center for the Defense of Free Enterprise.