NCPA - National Center for Policy Analysis

Rare Earths Mining Potential in the United States

April 3, 2013

Though the United States ranks among the world's largest mineral users and producers, it relies on foreign sources for rare earth metals, which are used in products from iPhones to computers, defense equipment, wind turbines and more. With economic and military demand likely to grow in the next few years, the United States must reform its mine permit process and safety regulations to take advantage of the vast underground store of raw materials that could drive growth, add jobs and bring revenue to state budgets, says Tom Tanton, president of T2 & Associates.

  • More than 250,000 Americans work directly in metals and nonmetals mining, and mining creates an additional 650,000 jobs elsewhere in the economy.
  • Mining jobs offer average annual wages that are 33 percent higher than the combined average for all industrial jobs.

Rare earth metals are used to manufacture most computer chips and many electrical devices. They are easily extractable in their light or heavy form and produced exclusively by China.

  • The United States, Russia and India have produced small amounts of rare earth metals but China's dominance of the market leads to volatile prices and fear among investors and mine developers.
  • The hurdle to developing mines in the United States is the regulatory process, which takes an average of seven to 10 years to obtain the proper permits and approvals to open a mine.
  • Australia and Canada have similar environmental restrictions as the United States but have average permit wait times of only two years.

Non-governmental organizations and environmental groups create additional challenges, which delay project approval. Currently, mines in Arizona, California and Wyoming are facing multiyear delays in the development of rare earth resources.

States where mine development occurs could benefit from increased tax revenues, which could help to reduce budget shortfalls.

  • States with rare earths resources could increase gross state product by almost $40 billion, add nearly 3,600 shovel-ready jobs and improve state revenues by $724 million.
  • To do so, the permitting process must be streamlined, technology must be used to continuously improve safety and regulatory authority needs to be consolidated.

Source: Tom Tanton, "Rare Earths Mining Potential in the United States," National Center for Policy Analysis, April 2013.


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