The United States is preparing to take a stand against China’s prolonged dominance as the world's leading rare earth mineral distributor, as well as the leading manufacturer of high-powered magnets.
Powerful magnets are an essential component of several modern products such as electric car motors as well as wind turbines. China is currently mining 70% of rare earth minerals and is responsible for creating 70% of the world’s high-powered magnets. The United States is prepared to spend tens of millions of dollars in an attempt to become a contender in the global magnet market but appears years away from the infrastructure required to do so.
A lack of infrastructure is not the only problem that the United States faces, some are also concerned that the United States lacks the expertise and skillset required to create these magnets, as well as the belief that the United State will be unable to compete with China’s prices unless some sort of subsidy is offered by the government.
The scale in which rare minerals need to be mined is again another threat to the success of the project. It requires 100 tons of rare earth minerals to create just 6,000 Toyota Prius’. When Toyota manages to sell 2 million electric and hybrid vehicles in 2019 it appears that the U.S. will have a hard time supplying the magnets demanded.
The United States is expecting to produce roughly 2,200 tons of magnets each year, but considering the global demand is 408,500 the United States will have to expand the industry significantly to possibly compete with China. The United States also faces numerous environmental rules that will hinder the expansion of rare earth mining even more.
Source: Wall Street Journal