HSNW conversation with Mike ParnellChinese rare earth embargo would be “disastrous,” says mining executive

Homeland Security NewsWire: Rare earth metals recently made international headlines when China, which controls 97 percent of the world’s supply, cut off shipments to Japan last year. If China were to entirely cut off exports to the United States, what would be the effect on businesses and the defense industry?

Mike Parnell: If China cut off supplies today – meaning REE [rare earth element] exports, as I would assume China would continue to feed its own industries with rare earths – the result would be disastrous, and would ripple through the United States and other industrialized economies.  We simply do not have sufficient REE supply right now to meet demand in the event of a Chinese cut-off. Last year, when China turned off the REE tap on Japan – over a dispute about the rights to some islands in the East China Sea – we got a glimpse of what that could mean to the United States and other countries. It’s a signal to move rapidly to bring new REE mines into production – and U.S. Rare Earths is doing all we can to be a reliable source for the full range of rare earths.

HSNW: Lawmakers have introduced legislation that would re-start the U.S. rare earth mining industry. How critical is it to pass this legislation to jumpstart the domestic mining industry? That is to say, if these bills did not pass would it be a significant hindrance to mining companies?

MP: U.S. Rare Earths, like other junior mining companies, is working forward under the rules in place today.  That said, Congressional action could help streamline the permitting process – especially given the strategic importance of the rare earths. Congress could also act to establish a rare earths stockpile or strategic inventory, which would signal that the United States understands the need for a strong domestic rare earths mining sector.

HSNW: With nations around the world seeking alternatives to China’s rare earth metal stockpiles, will China continue to dominate the market or do you expect other countries to emerge as reasonably priced alternatives?

MP: China’s dominance is a strong market signal — an incentive to companies and countries outside of China to push forward to provide new supply. If China restricts REE exports or simply uses all of its REEs to feed its growing economy, it’s all the same:  the United States and other industrialized nations will need new supplies.  U.S. Rare Earths is pushing hard to bring that new supply into the market. 

HSNW: Mining for rare earth metals has proven to be an environmentally devastating process. What technological advancements or efforts have mining companies taken in recent years to reduce the ecological impact of mining for these materials?

MP: I think our consciousness here has been shaped by China’s experience:  mining carried out with little or no regard for its impact on people or the environment. Even China, for that matter, says it’s going to demand safer environmental measures for REE mining going forward. I am completely confident that mining in the United States, with our strict standards, can be done in a way that protects our environment and provides us with the rare earths we need for so many functions from green energy to high-tech to national defense. 

HSNW: Are there any viable alternatives to rare earth metals currently under development?

MP: Engineers and designers are always looking for substitute materials, and there’s no question rising REE prices have accelerated this process. If you want to limit rare earths in your cell phone, you can always go back to that phone we all had in the mid 90’s, as big as a brick and almost as heavy as one.  So there are reasons tech-sensitive applications use rare earths.

And when it comes to certain specialized applications in the defense sector, or certain commercial high-tech applications, you simply can’t substitute away from REEs without sacrificing performance and functionality. So theoretically, yes, it’s possible to find ways to do more with less REE; but in practice, that’s often easier said than done.