China’s dominance in the mining of highly coveted rare earth minerals is coming under challenge worldwide, and by far the most significant challenger is the United States.

After being shuttered for more than a decade, Colorado-based Molycorp has reopened its rare earth mine in Mountain Pass, Calf., with production expected to skyrocket in the next few years. Rare earth minerals are exactly what the name implies, rare. The group comprises 14 minerals which are both hard to find and seldom found in large concentrations. But they have a wide variety of industrial applications and can be found in smartphones, night-vision goggles, automobiles, and a host of high-tech military applications.

With names like dysprosium, neodymium, and Europium, rare earths are not a household name like their better-known and more abundant cousins such as gold, silver, platinum, or copper. But their ability to do things that other minerals cannot do has made them among the most sought-after natural resources in the world. And no country has been more aggressive in its pursuit of rare earths than China. By 2010, China supplied 97 percent of the world’s rare earths. The Chinese mine the rare earths they have in their own territory and they seek them out elsewhere, notably in mineral-rich Africa.

Two years ago, China decided to limit its exports of rare earths, a move that set off alarm bells around the globe. Concerned that China would use its near monopoly on the mining and refining of rare earths to limit other countries access to the minerals, other countries, led by the United States and Australia, decided to enter the fray. At Molycorp’s reopened mine in California, employment has grown from 55 to 420 in recent years, and the company expects to produce as much as 40,000 metric tons a year by 2013. That would account for about 30 percent of global supply.

And on the U.S. East Coast, North Carolina is getting into the act. The Washington Post (Oct. 27) reports that Japan’s Hitachi Metals is planning to produce high-tech magnets in the town of China Grove.. The Hitachi plant, which will employ 70 people, will produce rare earth magnets that are lighter and more powerful than traditional iron-based magnets. Hitachi expects to sell the magnets to makers of hybrid and electric cars.

Molycorp closed its California mine over a decade ago because it was unable to compete with low-cost China. But with China limiting its exports, and experiencing higher labor costs, Molycorp saw its chance to re-enter the arena.

What enabled the company to start up so fast was the fact that Molycorp owns the land where the mine is located. It didn’t have to go through the multi-layered permitting process that companies face when trying to extract resources from federal land. Similarly, most of the oil and natural gas found in energy-rich shale formations around the country are beneath privately-owned land. Landowners and developers deal with state environmental agencies rather than with the federal government. Mineral rights, a uniquely American legal institution, have been behind the shale boom that has made the U.S. the world’s fastest-growing producer of oil and natural gas. Mineral rights could also help propel the U.S. mining industry to global leadership in rare earths.


  • Bonner Cohen, Ph. D.

    Bonner R. Cohen, Ph. D., is a senior policy analyst with CFACT, where he focuses on natural resources, energy, property rights, and geopolitical developments. Articles by Dr. Cohen have appeared in The Wall Street Journal, Forbes, Investor’s Busines Daily, The New York Post, The Washington Examiner, The Washington Times, The Hill, The Epoch Times, The Philadelphia Inquirer, The Atlanta Journal-Constitution, The Miami Herald, and dozens of other newspapers around the country. He has been interviewed on Fox News, Fox Business Network, CNN, NBC News, NPR, BBC, BBC Worldwide Television, N24 (German-language news network), and scores of radio stations in the U.S. and Canada. He has testified before the U.S. Senate Energy and Natural Resources Committee, the U.S. Senate Environment and Public Works Committee, the U.S. House Judiciary Committee, and the U.S. House Natural Resources Committee. Dr. Cohen has addressed conferences in the United States, United Kingdom, Germany, and Bangladesh. He has a B.A. from the University of Georgia and a Ph. D. – summa cum laude – from the University of Munich.