American-made products at a cost-competitive price takes effort

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Op-ed views and opinions expressed are solely those of the author.

The world is on fire when it comes to rare earth elements and this time it’s not just about the gatekeeper (China) threatening to cut off supplies. This time it’s largely dependent on the fundamental growth in demand in addition to the clear national security issues the Nation is presently facing. It’s about the fear that the world in its current state does not have the capacity to keep up with the massively growing demand for products that require rare earth and critical elements as well as the critical nature of the products (electric vehicles, high-tech devices, clean energy and defense drones, etc.). To go a step further, the need is even more pronounced in the domestic market.

There is an urgent need for both the federal government and private companies to establish a process that not only produces isolated rare earth elements from domestic sources, but is also cost-competitive while meeting the strictest environmental regulations. To follow, we also need to recreate and build the complete resilient supply chain domestically, from environmentally conscious methods of extraction, to processing and purification into finished products. Being at the mercy of foreign sources for such a critical industry in our country is a risk to reliability and innovation that affords us the ability to stay on the cutting edge of technology and national security.

To understand the market, we must also be aware of the challenges. How can we compete with our arms tied behind our back so we do not repeat the rise and fall of Molycorp when China decided to unnaturally deflate critical element prices to maintain its market dominance? Our competitive differences are threefold: first, there is a very different labor structure between our nation and China. Secondly, we abide by far stricter environmental practices, and thirdly, we are becoming a nation of red tape covering additional red tape. The typical answer offered without much thought is that technological innovation can overcome these challenges. However, that alone will result in failure, as this “technological innovation” will, in fact, be adopted faster in developing nations than here in the U.S.  For example, the power generation industry developed technologies to be significantly more efficient and cleaner yet those advanced were never implemented domestically due to regulation and were instead used in developing nations like China.

To have a presence in the competitive landscape we must implement our technology using our strengths – the “environmental value” and the “process chain.”

Our initial effort is that we must demonstrate our environmental value of domestically sourced products. It has been proven that there are feedstocks of rare earth elements in the U.S. that may actually improve the long-term environment by extracting products from existing waste sources versus how China ravages the earth to produce the same elements. To be a competitive value, consumers must step up and demand that manufactures of electric vehicles, wind turbines, cellphones, battery storage technologies, and so forth demand that the entire supply chain recognizes their environmental footprint. Consumers must demand we audit the impact on the earth not just from a finished product, but also the components that go into them.

Secondly, and arguably more important, is the process chain that can and needs to be established between private industry and the scientific community. A collaborative environment where high-value technologies can be implemented to create a low-cost and efficient processing and development chain is key for the U.S. to efficiently compete on a global scale. We need to find efficiency in the process despite what anyone says – costs matters.  To be accomplished, we as private industry need to develop a collaborative process chain that can leverage technologies to even the playing field and exploit our low-cost extraction methods available in today’s environment. The private industry in concert with the scientific community developed a COVID-19 vaccine in record time. There was an immense collaborative effort to achieve this remarkable result; this showcases that it can be done.

Over the years the U.S. has spent hundreds of millions of dollars on developing technologies and proving out reserve bases. Where the industry has struggled is taking all of this research, effort and IP and compiling a truly efficient process chain that will exhibit a cost structure that can go head-to-head against China and be commercially viable in today’s marketplace. If the private industry can combine technologies in an efficient process, then the costs can be substantially streamlined. It will take coordination and collaboration but the “process” and alignment is key. It needs to be streamlined, efficient, collaborative and organized to ensure that the products can be produced, purified and delivered to the supply chain in a low-cost and in a high quality.

We as consumers should finally demand that buying an electric motor, for example, from highly pollutive sources does not make it a “green car” in America. We as a society need to analyze the entire supply chain when we look at our environmental footprint. We need to demand better, demand innovation, demand collaboration, demand that a valuable process chain results in American-made products at a cost-competitive price. We need to bring the supply chain home for critical and rare earth elements and ensure we have access to everyday products, that we can keep our country safe, protect our environment and advance innovation forward.

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Mark Jensen
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