Rare Earth Elements | 60 Minutes Archive

- China controls approximately 90% of the global rare-earth industry. Its dominance extends across mining, refining and processing. The report describes this concentration as a strategic vulnerability because modern technology and defence systems depend heavily on these materials. China demonstrated its ability to disrupt international supply in 2010.

- The United States pioneered the modern rare-earth industry. Its origins were at the Mountain Pass mine in California's Mojave Desert, approximately an hour west of Las Vegas, where geologists identified rare-earth deposits.

- The discovery of europium helped launch the commercial rare-earth industry in the 1960s. Researchers discovered that europium enhanced the red colour in television screens, creating an important commercial application for materials previously considered geological oddities.

- Molycorp operated the Mountain Pass mine for approximately six decades. Its chairman, Constantine Karayannopoulos, described it as one of the world's largest rare-earth mines and showed reporters the extensive ore body running beneath the mining site.

- Rare earths comprise 15 elements with atomic numbers 57–71. They include lanthanum, cerium, neodymium, praseodymium, samarium and terbium. Despite their name, these elements are not particularly rare; small quantities occur widely, including in ordinary rocks and potentially in people's backyards.

- Commercially viable concentrations of rare earths are much harder to find. Most deposits contain very low concentrations, and only a limited number of locations have sufficient concentrations to justify mining. Karayannopoulos showed reporters material described as having approximately 25% grade, an unusually high concentration.

- Different rare-earth elements perform specialised technological functions. Europium enhances red colour in television displays; erbium amplifies light in fibre-optic cables; gadolinium has magnetic properties and is used in MRI machines and X-ray applications; neodymium is essential to small, powerful magnets.

- Rare earths are embedded in everyday household technology. Applications include smartphone vibration motors, refrigerators, touchscreen thermostats, energy-efficient lighting and air-conditioning systems. Even the cameras and lighting equipment used to film the report contained rare-earth materials.

- The automotive industry depends heavily on rare earths. They appear in catalytic converters, sensors and hybrid-car batteries. Hybrid vehicles require particularly large quantities because their electric motors depend on rare-earth magnets.

- A Toyota Prius contains approximately 25 pounds of rare-earth materials. This illustrates how substantial the material requirements can be even in an ordinary consumer vehicle.

- Extracting rare earths from rock is environmentally difficult. Mining and processing require toxic acids and substantial quantities of water, creating significant pollution risks that have historically discouraged or constrained production in environmentally regulated countries.

- California shut down Mountain Pass in 1998 following radioactive water contamination. Radioactive water seeped into the surrounding Mojave Desert from an underground pipeline. The mine remained dormant for approximately a decade, creating an opportunity for Chinese producers to expand their market dominance.

- China deliberately entered the rare-earth industry and overtook American production. Dan McGroarty, a former special assistant to President George H.W. Bush who advised the US government on critical materials, identified approximately 1986 as the point when American production was declining while Chinese production was increasing.

- China's competitive advantage came partly from lower labour costs and weaker environmental and worker-safety protections. McGroarty explained that China faced substantially fewer environmental constraints and safety requirements for miners. These differences translated directly into lower production costs and prices that American competitors struggled to match.

- Chinese pricing helped drive competing producers out of the market. When asked whether lower prices could push other countries' producers out of the industry, McGroarty confirmed that this was essentially what happened.

- Deng Xiaoping publicly signalled China's rare-earth ambitions in 1992. His statement was: "The Middle East has oil. China has rare earths." The remark indicated that Chinese leadership recognised the potential strategic importance of controlling these materials.

- Western countries failed to recognise the significance of Deng's warning. McGroarty acknowledged that the statement largely went unnoticed outside China. He contrasted American companies' concentration on developing smaller applications for laptops and mobile phones with China's focus on securing the metals and materials needed to manufacture those products.

- China invested billions of dollars to establish its rare-earth industry. McGroarty compared the investment to China's moon programme, describing it as a deliberate national undertaking that prioritised industrial development despite serious environmental consequences.

- Rare-earth production around Baotou caused severe environmental contamination. Footage obtained from a freelance cameraman showed an area where chemical toxins had heavily contaminated the air, land and water. The report said entire villages had been relocated because of the pollution.

- Rare-earth processing transforms mined materials into metals and specialised alloys. These materials are subsequently blended into products such as permanent magnets, which retain their magnetism after being magnetised.

- Rare-earth magnets are exceptionally powerful relative to their size. Ed Richardson, president of the US Magnetic Materials Association, explained that small quantities can produce magnets capable of lifting up to 1,000 times their own weight. He identified magnets as the most important application of rare-earth materials.

- Rare-earth magnets made modern electronic miniaturisation possible. Richardson dismantled a mobile phone to demonstrate three tiny magnets inside it. Their strength allows manufacturers to build smaller, more powerful speakers and other components without requiring large quantities of magnetic material.

- China acquired important American rare-earth magnet technology through the 1995 purchase of Magnaquench. Magnaquench, based in Indiana, was described as the largest American rare-earth magnet company. Its acquisition gave the Chinese access to American patents, manufacturing equipment and technical expertise.

- The Magnaquench acquisition also transferred practical manufacturing knowledge to China. Some American employees travelled to China to train Chinese workers in producing the magnets. China therefore acquired not just manufacturing facilities but also the expertise required to operate and expand the business.

- American officials acknowledged that the strategic importance of the technology was not properly understood when it was transferred. McGroarty said the technology moved to China before its importance was appreciated in the United States. He described the transfer as a serious mistake with consequences for American defence capabilities.

- US defence systems became heavily dependent on Chinese rare-earth supplies. When asked directly whether America depended on China for its weaponry, McGroarty answered affirmatively. He warned that the dependence extended across numerous modern military systems.

- The F-35 fighter jet contains nearly half a ton of rare-earth materials. The report used the aircraft, described as the most technologically advanced weapon system in history, to illustrate the scale of military dependence on these elements.

- Rare earths are also essential to precision-guided weapons. McGroarty identified Tomahawk cruise missiles, smart bombs, weapon guidance systems and lasers as applications. He said it would be difficult to identify modern defence systems being developed that did not contain some rare-earth component.

- China's dominance creates a national-security vulnerability for the United States. When asked whether the Chinese monopoly threatened American national security, McGroarty answered that it did if left unchecked.

- A territorial dispute between China and Japan exposed the potential for rare-earth supply restrictions to become geopolitical leverage in 2010. A Chinese fishing trawler rammed a Japanese Coast Guard vessel during a territorial dispute. Japan subsequently detained the fishing boat's captain.

- China retaliated by suspending rare-earth shipments to Japan. Approximately two weeks after the captain's detention, China stopped supplying the materials. The interruption lasted approximately 30–40 days, demonstrating that access to strategically important industrial materials could be affected by a political dispute.

- The Japanese incident became a wake-up call for American policymakers. Approximately 20 years after Deng Xiaoping's statement, rare earths finally became a significant issue on the US government's strategic agenda.

- President Barack Obama initiated a formal complaint against China at the World Trade Organization. His administration challenged China's creation of supply shortages for foreign buyers. The report stated that the WTO ruled against Beijing the previous August.

- The Obama administration declined to discuss America's rare-earth dependence publicly. The report sought interviews with officials from the Department of Energy, the Pentagon and the US Trade Representative's office, but none agreed to speak on camera.

- Private-sector companies were also unwilling to discuss their dependence on Chinese supplies. Reporters approached executives from companies using Chinese magnets and related products, but they declined interviews.

- Fear of losing access to Chinese materials was identified as a possible reason for corporate silence. When asked whether high-tech companies feared that criticising China might cause suppliers to stop selling them essential materials, McGroarty described grave concern within the industry but suggested companies were unwilling to discuss the issue publicly.

- The United States attempted to restore domestic production by reopening Mountain Pass. Molycorp was permitted to restart the California mine after developing new technology intended to protect the environment.

- Reopening Mountain Pass could not eliminate American dependence on foreign supplies. Even operating at full capacity, the mine would produce only a fraction of global rare-earth supply.

- The Pentagon began stockpiling rare-earth materials. This was one measure intended to protect American defence capabilities against potential supply disruptions.

- Industry began researching technologies that could replace rare earths. Developing alternative materials and technologies was another approach to reducing dependence on Chinese-controlled supplies.

- Government encouragement was insufficient to attract substantial new investment. When asked whether Molycorp received government assistance, the company's representative described the support as encouragement rather than meaningful financial assistance.

- The US government was not offering tax breaks or subsidies to encourage businesses to enter the rare-earth market. The report identified the absence of these financial incentives as a significant obstacle to rebuilding domestic production capacity.

- Rebuilding America's rare-earth industry would require a long-term commitment. McGroarty said it had taken approximately 20 years to lose America's dominant position and estimated that restoring some supply chains would take another 10–15 years, provided the country executed its plans successfully.

- Molycorp's financial position threatened the very domestic mine intended to reduce American dependence on China. Despite restarting operations approximately two years earlier, Mountain Pass had yet to become profitable.

- Mountain Pass was deeply in debt and facing questions about its survival. At the time of the report, Molycorp's own auditor had warned that the company might not be able to remain in business. The warning highlighted the difficulty of rebuilding an industry that had lost its competitive position, even after domestic production resumed.