Rare-earth minerals are necessary for the production of many everyday products including an item most could not live with out: the smart phone.
These important minerals were the topic of discussion at the "Rare-Earths Geology Talk" in Madison County on Jan. 28.
Legend Minerals Geologist William Jud and ThREE Consulting President James Kennedy spoke on the importance of rare-earths and the implications they have on national security and the economy.
"About the year 1980, the United States was the world leader in producing rare-earths minerals, in rare-earths research and in manufacturing of products that use rare-earths," Jud said. "Magnets were an important product because magnets are closely associated with nearly everything electrical or electronic."
Jud said the United States currently produces 85 percent of the entire world's rare-earth needs, but nearly all of it is tossed into mine dumps due to laws and regulations created in the early 1980s.
"When you create laws and regulations that restrict thorium and uranium, very useful and valuable rare-earths also become restricted and even unavailable," Jud said. "Within a few years, companies that need rare-earths to manufacture their products were forced to shut down or find another source of rare-earths."
Jud said China has rare-earths in abundance as a byproduct of mining iron and they recognized the opportunity when they saw it.
"Chinese government leaders jumped on rare-earths mining, refining and manufacturing abandoned by the United States and now have essentially monopolistic control of the global rare-earths industry," Jud said. "Chinese companies make an extensive catalog of parts for U.S. weapons, communications, aircraft and other items. Of course, to make those items a company needs detailed materials list, manufacturing instructions, quality standards and other information on military weapons that would normally be classified secret information."
Kennedy said in order to produce products in China, it is Chinese law to turn over all intellectual property (IP) to the government, an example of the effect of doing this lies with the production of the Apple iPhone.
"Apple started basic manufacturing in 2004 but introduced the Apple iPhone in January 2007," Kennedy said. "By August of the same year Chinese corporations that were handed all of Apple's IP and manufacturing process technologies were producing a knock-off."
Kennedy said that today Apple is the number two producer of the iPhone coming, second to one of the Chinese companies which out produces Apple on a world-wide basis.
"China has used these materials to force corporations to build their factories in China," Kennedy said. "The (Chinese) government takes your IP and it hands it to a government-sponsored corporation it wants to be a world leader."
Kennedy said the United States is not the only victim of this. He has developed a materials handling flow-sheet which would allow American companies to resume the mining, refining and manufacturing of rare-earths products without need of repealing environmental and radioactivity laws and regulations.
"This solution is in the form of an executive order, requiring the signature of the president," Kennedy said. "The solution calls for the creation of a fully-integrated, multi-national rare-earth cooperative. The cooperative would invite multi-national end-users of rare-earth materials and various government agencies, or proxies, to directly vest."
Kennedy said the cooperative would be governed by the owners. All finished goods would be sold to cooperative owners at the cost of production.
"In exchange for guaranteed product at cost, the owners would be obligated to purchase finished product from the cooperative," Kennedy said. "The resource supply would come from rare-earths currently mined by many existing mining operations around the world who currently consider the thorium bearing rare-earths as a liability."
Kennedy said China has filed more rare-earth patents than the rest of the world combined every year since 2011.
"By early 2021, China will have accumulated more rare-earth patents than the rest of the world combined," Kennedy said. "At no time over the last 40 years was China's rare earth production, or its growing number of rare-earth patents, listed as an issue of serious concern by the Pentagon in any of its past manufacturing and industrial policy reports, reports to Congress on China threats or acquisition reports."
Kennedy said he has presented his data to the Pentagon and taken steps to get the information in front of the proper networks.
In a September 2018 report ordered by the White House, the Pentagon released a statement on the issuing saying, "China represents a significant and growing risk to the supply of materials deemed strategic and critical to U.S. national security."
"These resources can be part of a larger mining strategy in Madison County and Missouri if we fix the current regulatory and industrial defects of our economy," Kennedy said.