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American Resources Policy Network
Promoting the development of American mineral resources.

A Short Note on Strategic Metals

By Daniel McGroarty | Posted: April 5, 2012 at 11:32 am

Thomas Jefferson once said that “the most valuable of all talents is
that of never using two words when one will do. ” With Jefferson as
our guide, we note here Congressman Mike Coffman’s response in full to
the Pentagon’s long-awaited report on Rare Earths in the defense
supply chain:

“China still controls the production of rare earth materials. Our long
term economic security absolutely depends on being able to establish a
domestic supply chain, but despite recent efforts, the U.S. has been
unable to. I think the Department of Defense would be wiser to begin
addressing this problem, instead of claiming everything is under
control.”

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    Lynas Corp was on path to produce the required rare earths in late 2012 and was in the position to thwart China’s dominance. In that context I find it very interesting that Lynas Corp’s rare earth refining plant (LAMP) in Malaysia is facing such an orchestrated campaign to stop it from beginning to produce the concentrated/refined rare earths in 2012 and the subsequent magnet manufacture in a factory next door to LYC’s LAMP in 2013.

    Malaysia has a large Chinese population who are responsible for most of  Malaysia large scale business. Do they have links back to China? Yes of course they do. Are they acting as China’s “cats paw”? Is a question to be answered.

    If they are successful in using community hysteria to manipulate the ill-educated local Malays to block Lynas then the USA has lost a very important near term source.

    Australia’s Alakane will be the next off the block and Alkane’s CEO Ian Chalmers has the 100 year mine life DZP project to mine (one of the world’s richest heavy rare earth deposits at Dubbo, NSW, Australia)  and will process on-shore Australia.

    Two Questions:
    What was Ian Curtis LYC’s CEO thinking when he placed his company’s forward pathway in the hands of the Malaysians?

    Are the Chinese Malays working for Malaysia or another entity?

    • Daniel McGroarty

      American Resources has no way to assess the internal dynamics of Malaysian culture and politics, but your larger point — on the impacts of delaying the Lynas project — hits at the heart of our concerns. Many policy-makers and business leaders in the industrialized world have been counting on new supply of Rare Earths Elements from Lynas in Australia and Molycorp in the U.S. (in Molycorp’s case, renewed supply from the modernized Mountain Pass Mine). While Molycorp’s resumption of mining is ramping up, Lynas’s delays will deprive markets of a significant supply near-term — when many analysts forecast supply shortages of specific REEs as early as 2014 and 2015.

      Your note reminds ARPN readers that diversifying resource supply — in this case for REE, but the point is generalized to all strategic metals and minerals — is far too important to limit our hopes to a single project or two. Public policy must buttress market efforts to develop a range of resources if we want to increase our independence and reduce our vulnerability to foreign disruptions.

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