Last Friday, President Trump invoked a rarely used section of the Defense Production Act to compel General Motors to start making badly needed ventilators. However, this was the second time in less than a year that the President utilized this little-known law in the national security interests of the United States. Last July, the president also employed this powerful law to ensure the U.S. had its own domestic supply of rare earth minerals. These minerals are not only critical for national defense, but also for the production of non-defense related items like electric vehicles (EVs). The U.S. needs its own reliable domestically available supply of these invaluable minerals.
Even before the onset of the coronavirus pandemic, U.S. officials concluded that, at best, our nation has a tenuous supply of rare earth minerals. That lack of supply has only been exacerbated as most of us reorganize our lives and practice social distancing to combat the coronavirus. The coronavirus pandemic is now crippling U.S. efforts to produce lithium and other rare earth minerals used to build EVs and other devices we use in our daily lives.
Are rare earth minerals really rare as the descriptor suggests? The answer isn’t as straightforward as you might think. Rare earth minerals are a group of 17 elements that appear in low concentrations in the ground. While these elements are more prevalent than their name might suggest, they are very expensive to extract. So the minerals themselves aren’t rare, the ability to extract them is. Several rare earth elements, such as neodymium and dysprosium, make up critical components of the motors used in electric vehicles.
Before the onset of our current pandemic, China supplied around 80% of rare earth minerals imported by the U.S. With the coronavirus disrupting global supply chains of every magnitude, we can only assume that the supply of rare earth minerals from China will also be affected. This logistical disruption will be bad news for the production of EVs.
Currently, there is only one open-pit mine for rare earth minerals in the U.S., located in Mountain Pass, California. While that mine is still operational, it relies on (you guessed it!) China for the final processing of minerals extracted from this site. Last year, as a result of the trade war with China, the Pentagon said it would fund new U.S. mines using the Defense Production Act. However, as the U.S. government turns its focus to the coronavirus, new rare earth mining projects are expected to face delays.
“Coronavirus could cause a year or two delay on projects,” said Seth Goldstein, a minerals analyst at Morningstar Minerals. “That helps China right now.”
Back in 2011, Energy Fairness wrote about the difficult position the U.S. was placing itself in by allowing China to control the market for rare earth minerals. Sadly, after eight years, it’s a lesson we still haven’t learned.
There will be many, many lessons learned from the 2020 coronavirus pandemic. One of them is that United States must have its own reliable domestic supply of rare earth minerals not only to meet national security needs, but to sustain the desire by policymakers and consumers to place more electric vehicles on the open road.