CRISISBOOM

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The next commodities boom town.

Image: Google Maps

A tiny town in Nebraska might be where the US wakes up from it’s decade-long hiatus from mining rare earth elements.

The Washington Times reports that Vancouver-based Quantum Rare Earths Developments Corp. announced that they have found significant amounts of rare earth elements and niobium in Elk Creek, a rural town of 112 people. The company and the US Geological Survey estimate that Elk Creek is potentially the “largest global resources of Niobium & Rare-Earth Elements.”

Niobium is an element needed to make strong heat-resistant steel. Deposits of Niobium in Elk Creek surpassed Quantum’s estimates. The company found rich concentrations of “Europium, Gadolinium, Terbium and Dysprosium, associated with the Elk Creek Niobium Deposit” according to their website.

A Boom Town in Nebraska

Residents of the tiny town are reaping the benefits of Quantum’s exploration when the company started sample drilling in the area last year.  In addition to leasing land from several farmers Quantum’s workers are providing a surge in business in the sleepy town, where they rent lodgings and shop at local establishments.

Lacon Heidemann, a state Senator and local farmer told the Washington Times, “It’s been a very, very positive experience for our community. When Quantum came in here, they put money in the local community. And any time you have money flowing in a small town, that’s a positive.”

The Importance of Rare Earth Elements

Imagine if just one country produced nearly all of the world’s oil.

Deng Xiaoping was once quoted saying, “The Middle East has its oil, China has rare earth.” This pretty much sums up the dangerous amount of control that one country has over the supply of elements that are crucial to clean energy technology, smartphones, lasers, and defense technology.

China has a firm hold on the 17 elements classified as ‘rare earth’ elements.  China currently accounts for 97% of all rare earth element production in the world.

After a 2010 diplomatic dispute, China showed that they are perfectly capable and willing to cut off the supply of rare earths when they first officially, then unofficially banned exports to Japan.  Without rare earths, the specialized high-tech instruments that Japan exports can’t be made. The Toyota Prius, for example, requires about ten pounds of Lanthanum to manufacture. The boom in smartphones have spurred demand, and prices of these commodities have spiked dramatically.

According to the US Geological Survey, the United States has about 13 million metric tonnes of rare earths that could be mined and saved for a rainy day if the Chinese halt or limit rare earths exports.  That’s just over a third of China’s reserves. The last US rare earths mine, the Mountain Pass Mine in California, was closed down in 2002 after numerous environmental disasters.  The mine passed an inspection in 2007 and is set to reopen in the near future.