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Legislation currently making its way through the US Congress to support the domestic rare earths industry has been given the thumbs up by a near-term producer with a project in Alaska.

Ucore Rare Metals (TSXV:UCU), a junior exploration company with the largest collection of heavy rare earth elements (REEs) in the United States, said last week that it is behind the legislation, which is currently before the armed services committee of the US House of Representatives. The bill urges the US Department of Defense (DOD) to “seek alternative supplies of high priority strategic rare earth elements, in an effort to diffuse the Chinese monopoly on global supply,” reads a June 13 press release.

It would also authorize the US government to spend $41 million to stockpile six critical metals, including dysprosium and yttrium — two metals found at Ucore’s Bokan Mountain deposit.

The heavy rare earth elements are critical to US defense systems, with dysprosium used in flight control systems, landing gear and munitions, and yttrium employed in the manufacture of jet engines.

“We’re pleased that the House Armed Services Committee is addressing the impending crisis in reliable availability of critical heavy REE’s to the US Department of Defense supply chain,” said Ucore’s president, Jim McKenzie. “In this context, Ucore and its Bokan deposit can play a pivotal role addressing the need for domestic heavy REE input components.”

Ucore already has a relationship with the DOD, having signed a contract with it to conduct a mineralogical and metallurgical study on Bokan.

Ucore’s Mark MacDonald said the bill before Congress “will strengthen that initiative.”

“Since we’re the most advanced project, and they’ve recognized Ucore, it stands to benefit us,” MacDonald told Canadian newspaper The Chronicle Herald.

Ucore released a preliminary economic assessment on the project last November and has said it plans to start building a mine in 2014, pending the requisite permits, targeting first production in 2016.

Regarding the project’s metallurgy, Ucore says it is able to separate heavy from light rare earth elements, which could add up to 25 percent more value to the REE oxide concentrate. “This technology breakthrough could have a very significant positive impact on our net present value,” McKenzie told Rare Earth Investing News (REIN) in an interview last October.

However, LiveScience reported more recently that a USGS-funded study published in January ”found Bokan Mountain’s vein system is very complex, with a mix of at least two dozen ore minerals.” ”It’s getting more and more complicated the more we look at it,” LiveScience quoted US Geological Survey geologist Brad Van Gosen, as saying.

Returning to the rare earths legislation before Congress, MacDonald said in the Herald article that the proposed rare earth stockpile could initially come from China, but that Ucore could become “part of the supply solution” when the mine starts operating in 2016.

That gets to the other thrust behind the legislation — reducing approval times for new mines in the United States. On that point, Mineweb quoted the chief sponsor of the bill, Nevada Republican Mark Amodei, as saying the US ranks dead-last by mining jurisdiction, in terms of the time it takes to permit a mining project.

“Duplicative regulations, bureaucratic inefficiency, and lack of coordination between federal agencies are threatening the economic recovery of my home state and jeopardizing our national security,” said Amodei, adding, “[t]his bill would streamline the permitting process to leverage our nation’s vast minerals resources, while paying due respect to economic and environmental concerns.”

REIN reported in April that getting approval to build a new mine in the US takes an average of seven years. REIN pointed out that the long wait times are particularly at odds with the rare earths sector, which is trying to develop new domestic supplies to reduce the nation’s dependence on China. The Asian nation has a near monopoly on the rare earths market, producing 95 percent of the world’s rare metals and consuming 70 percent of them. 

The US Department of Energy’s (DOE) 2011 Critical Materials Strategy document notes that supply challenges for five rare earth metals (dysprosium, terbium, europium, neodymium and yttrium) are likely to affect clean energy technology deployment in the coming years. Reacting to that, the DOE announced earlier this year that it will allocate up to $120 million for the creation of a rare earths research facility aimed at decreasing the country’s dependence on REEs from China.

 

Securities Disclosure: I, Andrew Topf, hold no direct investment interest in any company mentioned in this article. 

Related reading: 

Ucore Rare Metals Attracting Interest from DOD

Ucore Sets Sights on 2016 Production start for Alaskan Project

REEs Exist in Wyoming, Study Confirms

US Department of Energy Shifts Focus to Rare Earths

US Mine Approval Times a Growing Concern for Investors