A conflict is emerging on control of a bankrupt mine that is the only significant US source of the rare earth elements used in advanced electronics and some military applications, Bloomberg reports.
A group led by a former nursing home operator and Switzerland-based private equity fund will vie with a team of US hedge funds and a Chinese rare earths company in an auction set to decide the fate of the bankrupt Molycorp-owned mine on June 14.
At stake is whether the US can successfully mine its own resources of rare earths, which are increasingly being used in electric vehicle magnets as well as wind turbines — and end its reliance on Chinese supplies. Mike Pompeo, director of the CIA, said this month that the US dependence on foreign sources of rare earths was “a very real concern”. Last year the US imported $120m of rare earth metals, according to the US Geographical Survey, more than 70 per cent from China.
The winner of the auction is going to have to pass scrutiny by the Committee on Foreign Investment in the US, and take on an estimated $80m in environmental liabilities. Molycorp invested over $1.5bn into the mine, which is about 50 miles south of Las Vegas, but a collapse in prices of rare earths led the company to declare bankruptcy in 2015. The mine contains elements such as neodymium, praseodymium and dysprosium that go into magnets used in batteries and wind turbines.
Source: Bloomberg
