From the Texas Comptroller’s Office
Many Texans go about their daily routines without giving much thought to the devices, technology and machinery that enhance and simplify their lives. Yet many high-tech goods and services we rely on for communications, work, education, safety, energy and transportation would be rendered useless without a group of materials known as rare earth elements.
In the November edition of Fiscal Notes, the Comptroller’s office is offering a brief primer on 17 rare earths that make advanced technology tick for both commercial and national security purposes. The U.S. relies heavily on importing rare earths from other countries, even as demand for them is on the rise. From 2016 to 2019, 80 percent of these minerals came from China.
According to the following report written for Fiscal Notes by Jackie Benton, Texas is home to one of the largest deposits of rare earths in the United States, and plans are under way to bring those resources to market. As those plans take shape, Texas has the potential to lead in the domestic development of rare earths, which could benefit the U.S. economy and boost a range of growing Texas industries — from national defense to clean energy and electric vehicle manufacturing.
“Recent developments in the private sector aim to create a domestic supply of rare earths right here in Texas,” Texas Comptroller Glenn Hegar said. “In 2023, for example, USA Rare Earth LLC will begin mining rare earths on 950 state-owned acres in Sierra Blanca. Once fully operational, the company is expected to be the second in the U.S. to extract and the first to both extract and process rare earths. This major undertaking is featured in my most-recent Good for Texas Tour focused on supply chains.”
A Rare Earths Primer
There are 17 rare earth elements identified in the periodic table. All are metallic elements that possess unusual fluorescent, conductive or magnetic properties. When those elements are alloyed in small quantities with a more common metal like iron, they become extremely useful in a wide array of applications for technologies, consumer products and industrial processes. About 75 percent of the rare earths undefined produced are used as catalysts — in chemistry terms, a catalyst cuts the time needed to achieve a chemical reaction, which saves time and energy.
Indeed, rare earth elements are integral to numerous commercial and national security applications and are used in everything from small-scale goods such as smartphones, lasers, LED lights, computers and other consumer electronics to energy technologies such as wind turbines, electric and hybrid vehicles and oil refinery equipment.
Among rare earth elements, neodymium magnets lead an ever-increasing list of high-tech commercial and military applications. One particularly important application of the powerful and permanent magnets is to improve efficiency and performance in things such as permanent magnet motors (used in electric vehicles), hard disk drives, audio equipment, microwave communication technology and even magnetic resonance imaging systems (MRIs).
Texas Rare Earths
The state’s high-tech manufacturing industry has been gaining momentum over the past few years, as evidenced by electric car manufacturer Tesla, which recently announced plans to move its headquarters to Texas. In addition, the aerospace and defense industries have a long-standing presence in the state and could benefit from a domestic supplier of rare earths. The Texas-built F-35 Joint Strike Force Fighter jet, for instance, uses 920 pounds of rare earths material.
Currently, the only U.S. rare earths mining and processing facility is the Mountain Pass mine in California’s Mojave Desert. Operated by MP Materials, the mine accounts for close to 16 percent of the world’s rare earths production.
In 2023, the Mountain Pass operation no longer will be the sole rare earths mining operation. USA Rare Earth LLC, owner and operator of the Round Top Heavy Rare Earth, Lithium and Critical Minerals Project in Hudspeth County, Texas, together with joint venture partner Texas Mineral Resources Corp., is projected to begin mining 950 state-owned acres at the Round Top deposit in Sierra Blanca, Texas. USA Rare Earth has announced it will process rare earths onsite and projects the mine is likely to yield 16 or 17 rare earth elements and more than 300,000 metric tons of rare earth oxides. (One metric ton equates to 2,204.62 pounds.)
The company, which was part of the Comptroller’s October Good for Texas Tour focused on supply chains, expects to use a new, proprietary process to produce the materials in a safe and environmentally sensitive way. USA Rare Earth also has plans to make use of solar and wind power, where possible, to operate with minimal greenhouse gas emissions.
The company has acquired the neodymium permanent magnet manufacturing system, formerly owned and operated by Hitachi Metals in North Carolina, and the only commercial-scale system of its kind in the United States. USA Rare Earth is preparing to recommission the system for production, and once operational, plans to create a domestic supply chain that produces at least 2,000 tons annually of rare earth magnets.
“Once we are fully operational, we will have a fully end-to-end domestic rare earths supply chain that will make our country and economy more secure,” says Director of Environmental Services & Sustainability Aleisha Knochenhauer with USA Rare Earth.
“We will be the first company not only to extract, which is the mining component, but to operate the processing side in the United States,” says Knochenhauer. “What makes us even more unique is we will be able to supply the entire supply chain by taking the material that we mine, processing [it] into rare earth oxides, and then creating the magnets that go into so many critical products.”
Knochenhauer says an end-to-end rare earths supply chain is key to true domestic security.
“The only way we’re ever going to be able to control our destiny is to really be able to develop and control the supply source. And if we do it domestically, so that it’s reliable and viable, then we control our destiny,” she says.
“It’s not too little, too late to go in that direction,” says Knochenhauer. “The United States has the tools. We have the know-how, we have the drive [and] we have the passion. We just need to create opportunities for us to start using them.”
This issue of Fiscal Notes also looks at craft breweries, distilleries and wineries in Texas and the growth they are experiencing despite setbacks from the COVID-19 pandemic. Craft beer, spirit and wine makers contributed $1.1 billion to gross state product in 2020.
The industry currently employs nearly 5,400 Texans, and total employment in the state is growing twice as fast as the nation.
About Fiscal Notes: Fiscal Notes furthers the Comptroller’s constitutional responsibility to monitor the state’s economy and estimate state government revenues. It has been published since 1975, featuring in-depth analysis concerning state finances and original research by subject-matter experts in the Comptroller’s office.