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Mine in Mojave Desert May Hold Key to Beating China in the Race for Raw Materials

Rare Earth Elements

Rare-earth oxides -- a group of rare elements used in everything from cell phones to U.S. missile systems.USDA/Peggy Greb

In the middle of California's Mojave Desert about an hour outside of the Las Vegas strip, business is booming -- literally -- as detonations reveal the lifeblood of America's technical security. 

Molycorp has begun mining again at its Mountain Pass facility after about a decade of inactivity, extracting valuable and concentrated ore that holds 15 rare earth elements, used in everything from cell phones to U.S. missile systems.

In recent years, the Chinese have flooded, and thus cornered, about 97 percent of the world market of rare earth metals, and now thanks to high-tech demand and new Chinese restrictions on exports, the price of some of these rare earth elements has skyrocketed as much as 500 percent in the last year alone.

“The supply of rare earths predominantly comes from China, and China needs most of the rare earths they produce for their own consumption," Molycorp mine manager Rocky Smith said. "So all of the people of the United States and Europe and Japan, they’re going to have to find another source of these valuable rare earths, and that’s one of the main reasons this operation is so important.”

Molycorp has also developed a better way to extract and then process the elements, doing it in a more affordable and environmentally friendly way. CEO Mark Smith says that the new techniques in mining are allowing them to not only better serve the environment, but at the same time get more minerals than ever before out of the rock. Water, for example, that used to go into storage ponds is now being re-used, and the dirt left over reclaimed. 

“We can now produce the same amount of product for our customers using less than half the ore we did 10 years ago, and that’s a phenomenal improvement in a very short period of time,” Smith said.

Rare earth elements got their name back in the late 1800s because it was thought they were tough to find, but that isn't necessarily the case. In fact these elements, with names like cerium and dysprosium, are found everywhere, just not in high concentrations.

In layman's terms, they are mostly found scattered, like throwing a handful of sand on a driveway. Here at the Mountain Pass facility, it would be more like rocks thrown across the driveway, which means it makes sense to mine at this location, one of only three such concentrations in the world.

Right now, Molycorp is turning out about 3,000 metric tons of the stuff a year, but the compnay is going to up that to 5,000 metric tons annually by the end of 2011. The goal is to crank out 40,000 metric tons yearly by the end of 2013. At that point, they estimate they'll have swiped about 30 percent of the Chinese market share.

"Every ounce of rare earth that is used in anything in the Department of Defense, mission guidance systems, the night vision goggles, just as an example, every computer they use, that's all made with 100 percent Chinese rare earth material today," Smith said.

Rare earths are a set of seventeen chemical elements that are grouped together in the periodic table because of their great chemical similarity. Specifically, the fifteen lanthanides are essential to making hundreds of high-tech products, from wind turbines to jet engines, laptop computers to hybrid cars, and now the Chinese are choking off supply.

"In 1982, the premier of China said publicly that the Middle East may have oil but China has rare earths, and that shows you back in 1982 that the Chinese really understood the basic foundational economic value of rare earths to their country,” Smith said. 

It's clear that while this California mine exists thanks to geological luck, what Molycorp is doing here not only affects its bottom line, but also our national economic and military security.

Adam Housley joined Fox News Channel (FNC) in 2001 and currently serves as a Los Angeles-based senior correspondent.