Keith R. Long

The principal rare earth elements deposits of the United States-A summary of domestic deposits and a global perspective

Demand for the rare earth elements (REE, lanthanide elements) is estimated to be increasing at a rate of about 8% per year due to increasing applications in consumer products, computers, automobiles, aircraft, and other advanced technology products. Much of this demand growth is driven by new technologies that increase energy efficiency and substitute away from fossil fuels. Production of these elements is highly concentrated in China, which is reducing its exports of REE raw materials as part of its industrial policy. The ability of the rest of the world to replace supply from China depends on the quality of known REE resources and the degree to which those resources have been explored and evaluated. A review of United States resources in a global context finds that the United States could make significant contributions to future REE production. Aside from two advanced projects in the United States and Australia, however, there are no REE projects advanced enough to meet short-term demand.

Economics of mining law

Modern mining law, by facilitating socially and environmentally acceptable exploration, development, and production of mineral materials, helps secure the benefits of mineral production while minimizing environmental harm and accounting for increasing land-use competition. Mining investments are sunk costs, irreversibly tied to a particular mineral site, and require many years to recoup. Providing security of tenure is the most critical element of a practical mining law.Governments owning mineral rights have a conflict of interest between their roles as a profit-maximizing landowner and as a guardian of public welfare. As a monopoly supplier, governments have considerable power to manipulate mineral-rights markets. To avoid monopoly rent-seeking by governments, a competitive market for government-owned mineral rights must be created by artifice.What mining firms will pay for mineral rights depends on expected exploration success and extraction costs. Landowners and mining firms will negotlate respective shares of anticipated differential rents, usually allowing for some form of risk sharing. Private landowners do not normally account for external benefits or costs of minerals use.Government ownership of mineral rights allows for direct accounting of social prices for mineral-bearing lands and external costs. An equitable and efficient method is to charge an appropriate reservation price for surface land use, net of the value of land after reclamation, and to recover all or part of differential rents through a flat income or resource-rent tax. The traditional royalty on gross value of production, essentially a regressive income tax, cannot recover as much rent as a flat income tax, causes arbitrary mineral-reserve sterilization, and creates a bias toward development on the extensive margin where marginal environmental costs are higher.Mitigating environmental costs and resolving land-use conflicts require local evaluation and planning. National oversight ensures that the relative global avaliability of minerals and other values are considered, and can also promote adaptive efficiency by publicizing creative local solutions, providing technical support, and funding useful research.