Rare Earth Minerals Role In U.S. Energy Security

The Daily Energy Report interviews Keith Delaney, Executive Director of the Rare Earth Industry and Technology Association. We discuss which rare earth materials are important to next generation energy technologies and what the US needs to do to secure supply of these natural resources.

Full Transcript:

Keith Delaney: REITA is a consortium of global stakeholders in rare earth technologies.  So these entities that are members of REITA which span the range of companies from mining companies who extract the rare earths from the ground to original equipment manufacturers, like General Electric is one of our OEMs that’s a member of REITA. And we have several mining companies that are represented. The idea is to fill in the scale of the stakeholders between the mining companies and the OEMs. These are the supply chains for the rare earth technologies. Representing this consortium of stakeholders in rare earth technologies, REITA’s aim is to assist the entities in the creation of commercially sustainable, meaning globally competitive and diverse supply chains to compete with China.

Q: How do you represent your membership when you work with the Department of Defense?

Keith Delaney: As we’ll see at the conference today, the awareness within the Department of Defense and the concern about the reliance on China for our supplies of rare earth materials for defense systems is very acute. And as such, one of the important things we have to achieve as a set of stakeholders and as a nation, is to close the technology gap between China and the rest of the world when it comes to rare earth technology. Research and development is going to be key. The Department of Defense is a means to funnel federal research funding to interested parties. Because REITA’s members consist of many interested parties in closing that technology gap, REITA is structured in a way we can act and be the entity contracting with the U.S. government on behalf of the members which may or may not come into play. There are other ways to funnel R&D funding to interesting parties, and this is just one way that would be easy for the United States government because they would be dealing with only one entity, REITA. And the other being it’s beneficial to the members because REITA could act on their behalf.

Q: Which Rare Earth Elements are most common in the development of next generation energy technologies?

Keith Delaney: Well, the Rare Earth Elements are not all used in clean energy, green energy applications. But the ones we hear most often are neodymium, dysprosium, terbium, yytrium. Where neodymium and dysprosium come into play is in the use of making permanent magnets for electric motors that will drive hybrid vehicles, electric vehicles. They will also aid in the taking power loads off the internal combustion engine drives because they can assist powers to the vehicle that takes a load off the vehicle and gives the internal combustion engine more miles per gallon. It’s important in hybrids. It’s important in even current generation vehicles. It’s critical in wind power. The larger generators that are more efficient because they’re made with gearless components are made possible because of neodymium, iron-borum magnets. This can bring great value to the renewable energy initiatives in the country. When it comes to terbium and yytrium, those rare earth materials are used in advanced lighting. Compact florescent lamps, LEDs, et cetera, which bring seventy to eighty percent savings to the consumer by using those kind of bulbs.

Q: What steps does the United States need to take to secure the needed supply of Rare Earth Elements for the development of next generation energy technologies?

Keith Delaney: Right now, virtually, a hundred percent of the rare earth materials are coming from China. There are deposits of rare earth around the world. One is being developed and commercialized in Australia right now. The other is here in the United States and that’s Molycorp Minerals in California. Molycorp will be online producing at a full-scale rate in 2012. There are other deposits of rare earth materials in the U.S.; Utah, Missouri, Nebraska, Wyoming. One of our members’ companies has a deposit in Wyoming. But these deposits while some look promising and others get to be evaluated, it’s going to take probably five to eight years for these other properties to come online. It’s just a normal progression because these are large investments and need to be vetted very carefully before they’re commercialized. To lower our dependence on China, we need to create our own supply chains that are diverse from China. Hopefully with global participation involved because this is a global issue. The European Union is in the same boat as the U.S., as is Japan and Korea. It’s going to take concerted action by stakeholders, particularly commercial companies to ramp up and get into production and produce the supply chains necessary to reduce our dependence on China.

The way REITA sees it, the two ways the government can be of most help is in multi-year funding programs for research and development for these rare earth technologies. The second is, because the credit situation around the world is very tight right now, the credit terms being dictated to companies looking to create these supply chains that are so necessary are quite onerous. Extremely high rates and short payback periods, et cetera which is understandable because these investments are going to take awhile to pay themselves back because the whole thing had to be created. But reasonable terms, loan guarantees, those are the kind of things that would really grease the skids to get the commercial sector moving in the right direction.

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