The United States plans to spend big on essential minerals; choosing where is not easy
The United States has pumped millions of dollars into research on how to extract rare earth minerals from abandoned coal deposits, an approach that some say will not work. The Pentagon has invested in a US manufacturer of rare earth magnets that buys many of its products from China. Canada invested in a 21-year-old mining company that has never operated and ceded an option to control its main asset to a company run by the chief executive’s son.
“There were many companies that we had questions about in terms of their claims and what they were doing,” said Drew Horn, a former senior official in the Department of Energy, the White House and the bureau. of the director of national intelligence specializing in critical minerals during the Trump administration.
The United States and other Western governments are rushing to secure national supplies of materials, including rare earths, lithium and boron, which are essential for the growth of technologies such as electric vehicles, satellites and wind turbines. . They also want to develop the ability to treat them.
The Senate this month approved a bipartisan $ 250 billion bill to increase government spending on research and technology development to catch up with China, including funds for the extraction and processing of essential minerals in the country and with the allied countries.
Analysts said the bill was a breakthrough given its comprehensiveness, but said the problem now was to find the right projects to move the strategy forward.
“As a strategy this is a turning point because until now there has been a haphazard approach,” said Abigail Seadler Wulf, director of critical minerals strategy at Securing America’s Future Energy, a non-profit organization. lucrative. sol, ”she said.
The Department of Energy is already investing $ 19 million in projects in former coal mining communities to support research into the extraction of rare earths from waste coal and ash, the detritus left behind when fuel is mined or burned. .
In 2019, the US Geological Survey published a study concluding that it was too difficult to release rare earths from coal ash on a commercial scale and that there were not enough minerals in the coal waste to that the extraction is worth it.
“There is a general consensus that this is a low grade material,” said David Henderson, founder of Rittenhouse International Resources LLC, a critical minerals consultancy.
A DOE spokesperson said it was a priority to provide disadvantaged communities with know-how to recover rare earths and other essential minerals from coal and by-products, and create jobs.
The Pentagon and DOE have invested directly in several companies working with critical minerals, although some in the industry have said they are bewildered by some investments because of the beneficiaries’ ties to China or the lack of it. an established record.
In November, the Pentagon announced it would invest $ 2.3 million in a California company called TDA Magnetics.
On its website, TDA describes itself as a United States-based magnet manufacturer. The company doesn’t make magnets, but imports blocks of rare earth magnetic material, often from China, which are then made into custom parts, according to a person familiar with the matter and customs documents.
Rare earth magnets can be essential in military equipment, such as missiles and airplanes, and the United States has strict rules governing where these components are manufactured and customized, and who can see data related to them. supply.
TDA shares ownership, and at least one director, with another company called Tridus Magnetics and Assemblies, which is part of a joint venture with a Chinese magnet maker, according to public records and a person familiar with the matter.
The two share a resort in the Los Angeles area, and calls to TDA are answered with a message from Tridus.
The Pentagon has not yet visited the site, according to the person familiar with the matter.
The Defense Department declined to comment on any connection to China, but said it doesn’t need TDA to make magnets.
“TDA will research and develop a viable supply chain capable of establishing and maintaining a secure national source of qualified rare earth magnetic materials,” a spokesperson for the department said.
China’s dominance over essential minerals – it extracts and processes the majority of the world’s rare earths – means the country is difficult for the United States to avoid.
For example, the Pentagon is helping fund a rare earth processing facility at the Mountain Pass mine in California. Shenghe Resources Holding Co., a Chinese state-funded company, owns about 8% of the mine’s owner, MP Materials Corp.
Faced with a shortage at home, the federal government is looking to allied countries to help sponsor production and processing.
“To ensure a reliable and sustainable supply of essential minerals and materials, the United States must work with allies and partners,” the White House said in a backgrounder.
The Pentagon is already helping fund Australian company Lynas Rare Earths Ltd., which wants to build a rare earth processing plant in Texas. Elsewhere, the US International Development Finance Corp., a state-funded lender and investor, has invested $ 25 million in Irish firm TechMet Ltd. for critical mineral recycling projects.
Other governments are also looking to invest in rare earth projects.
Authorities in the Canadian province of Quebec have invested approximately $ 1.5 million in Commerce Resources Corp., which has also received support from the Canadian government. The Vancouver, British Columbia-based company has yet to operate or publish feasibility studies of its assets after more than two decades of operation.
Commerce President Christopher Grove said that although the project took longer than expected, it was affected by falling prices for rare earths.
The company said in 2018 that it had agreed to cede 75% of the interest in its main asset to another miner, Saville Resources Inc., if Saville spent $ 5 million to develop the asset over five years.
At the time, Grove said in a statement that Saville chief executive Mike Hodge “is well known and well regarded by Commerce.” Mr. Grove has not disclosed that Mike Hodge is his nephew and the son of David Hodge. , Managing Director of Commerce. The company also did not disclose that Mr. Grove and David Hodge own shares in Saville.
Under International Financial Reporting Standards, which Commerce says follows, close family relationships must be disclosed to investors.
Commerce chief financial officer Jody Bellefleur said disclosures related to the Saville deal had been approved by lawyers and the company’s auditor. She added that Mike Hodge of Saville had a long involvement in Commerce projects, an experience others would not have.
A spokeswoman for Investissement Quebec, the province’s investment arm, said she was not aware of the family relationship. The British Columbia Securities Commission declined to comment on the individual companies.
This story was posted from an agency feed with no text editing
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