Energy Department: U.S. rare-earth access at risk, supply diversity needed

U.S. access to rare-earth metals and other “critical” materials used in low-carbon energy technologies is at risk of supply disruptions, according to an Energy Department report that calls for diversifying suppliers, domestic development and boosting recycling.

The recommendations are part of a broad new DOE study on the elements that are critical to manufacturing wind turbines, electric vehicles, solar cells and other technologies.

“The availability of a number of these materials is at risk due to their location, vulnerability to supply disruptions and lack of suitable substitutes,” states Energy Secretary Steven Chu in a forward to the document. The report — which also calls for development of substitutes — comes amid growing fears about reliance on China, the world’s dominant supplier.

The Associated Press, citing Chinese state media, reported Wednesday that China plans to raise export tariffs next year in a move to limit shipments out of the country.

The prospect of Chinese restrictions has received high-level attention in the Obama administration and also attracted interest on Capitol Hill (see our earlier posts here, here and here).

But Chinese officials have also sought to provide reassurances in recent weeks, which a senior DOE official emphasized Wednesday.

“China has said that it intends to be a reliable supplier and we welcome that,” said David Sandalow, DOE’s assistant secretary for policy and international affairs, at the report’s rollout Wednesday. He spoke at the Center for Strategic and International Studies, a Washington, D.C., think tank.

Nonetheless, the report shows that Obama administration officials are not comfortable with China accounting for nearly all global supplies.

The Energy Department is developing an “integrated” research agenda and vowing to “work closely with international partners, including Japan and Europe, to reduce vulnerability to supply disruptions and address critical material needs,” the report states.

“DOE will work with other stakeholders — including interagency colleagues, Congress and the public — to shape policy tools that strengthen the United States’ strategic capabilities,” the report adds.

There is currently no U.S. mining of fresh rare-earth ores, although the company Molycorp Minerals plans to re-open the Mountain Pass mine in California that shut down a decade ago.

Chu, in a statement Wednesday, called DOE’s strategy a key part of efforts to develop clean energy. “This strategy is an important step in planning for growing global demand for clean energy products that will help strengthen the U.S. economy and create jobs,” he said.