Colo. company breaking into rare metals mining

DENVER, Colo. — A Colorado company that once shared its secrets with Chinese miners is launching a $511 million bid to break the chokehold China subsequently gained on rare-earth metals — crucial elements of smartphones, smart bombs and the clean-energy economy.

Greenwood Village-based Molycorp Minerals aims to return rare-earth mining to the United States, making the metals more affordable and creating jobs in Colorado and around the West.

But the environmental ravages of mining rare-earth metals that factored into moving the mining to China present a major challenge of meeting U.S. standards today.

China now supplies 97 percent of rare earths — 17 metals including neodymium, samarium and dysprosium — which, while obscure, are as ubiquitous in modern life as cell phones. Congressmen and military analysts have raised concerns about the heavy dependence on Chinese supplies because the country recently shut off shipments with no official explanation.

Along Colorado's Front Range, wind-turbine maker Vestas, which employs 1,200 at three factories, and electric-motor maker UQM Technologies are among the firms that import rare earths from China.

"We're going to put this country in a much better position," Molycorp chief executive Mark Smith said of the venture to mine the metals domestically.

When Molycorp ramps up mining of rare earths, "there will be diversity of supply so that America can have a choice as to where they buy those minerals," Smith said.

Environmental challenges? No problem, he said. Technological breakthroughs enable a cleaner process.

And, he said, Molycorp will process the metals at about half the cost — $1.27 per pound versus $2.54 in China.

At open-pit mines in China, miners extract rare-earth metals by pouring acids over ore — creating huge toxic sludge ponds.

China for years has pursued a strategy of limiting exports, while offering steady low-cost supplies of metals to manufacturers that agree to move jobs to China.

Chinese producers in China's state-run economy "are going to take care of themselves first, right?" Smith said in an interview at his Denver Tech Center headquarters.

Chinese authorities couldn't be reached. China's embassy spokesman, Wang Baodong, in Washington, D.C., didn't respond.