There seems to be a similarity between international trade disputes and Texas Hold’em. There is always a certain amount of bluff that is part of the negotiations. The question is, how much is a bluff and how much is not. The Peoples Republic of China (PRC) has just revealed that they are going to use their stake in rare earth minerals production as their show card. Make no mistake -- the communist government is not bluffing. However, one good card does not make a winning hand.  

To understand the problem, we first must understand where rare earth mineral deposits are found and why, we in the United States, no longer mine the deposits that we have domestically.

Rare earth minerals are found in a number of areas around the world, including North America. Rare earths are comprised of the 15 Lanthanide Elements in the periodic table and two outliers; Scandium and Yttrium. As with many mineral deposits, there are also other less desirable minerals collocated in these veins of rare earth minerals. These include uranium and thorium, which are radioactive.

When exploiting a deposit of rare earth minerals, the processing of the minerals leaves behind “mining tailings” of radioactive thorium and uranium.  Although uranium has a market value, thorium currently is classified as radioactive waste which, according the Environmental Protection Agency (EPA) must be handled in a very specific and costly way to protect the ground water and the environment in general from becoming dangerously radioactive. These requirements make exploiting the domestic deposits of rare earth minerals prohibitively expensive.

By contrast, China does not care about the environmental impacts of industry, which explains the toxic air quality of cities like Shanghai and Beijing. The mining operations of the Chinese rare earth mineral deposits leaves behind huge toxic and radioactive waste dumps. By simply refusing to clean up their act, they can produce these minerals at a cost more competitive than domestically produced rare earth minerals.  This is how China has captured 97% of the rare earth minerals market share.

This economic and environmental problem can be solved both in the short term and the long term because thorium is a very useful element. Thorium can be used in special type of nuclear reactor which has been shown to be proliferation resistant and safer than the High Pressure Water Reactors (HPWR) which are based upon uranium. Back in the early 1960s Oak Ridge National Laboratory (ORNL) built a Liquid Fluoride-Thorium salt reactor (LFTR). The reactor was designed by Dr. Alvin Weinberg, who was the director of ORNL. The reactor operated without incident for a number of years before it was shut down by Congress in favor of fast breeder reactors and HPWR because each of these types of reactors produce weapons grade fissile plutonium and uranium which was in great demand because of the Cold War arms race. 

The demonstration of the LFTR reactor was a magnificent success. It proved that LFTR types of reactors were safer than uranium-based HPWR in a number of ways:

In a worst-case scenario, such as the Chernobyl meltdown, when there is a breach in the containment vessel (a profoundly dangerous event), a HPWR molten core will continue to melt through the Earth causing a “China Syndrome” event with the molten core continuing through the Earth until it hits ground water, then explosively spewing radioactive steam back up the same path into the atmosphere killing some in the area immediately and other a bit later with leukemia and other forms of cancer.

If a reactor vessel were to be breached in a LFTR, the molten fluoride salts would leak out and solidify and essentially selfheal the breach. Fluoride salts are not water soluble, so even if the breach occurred as the result of a tsunami (as was the triggering event at the Fukushima Daiichi reactor) the salts would only solidify that much faster.

LFTR types of reactors are also proliferation resistant. The byproducts of the operation of LFTR types of reactors are not suitable for nuclear weapons. Additionally, the LFTR types of reactors can be used to “consume” the thousands of spent fuel rods sitting in cooling ponds all over the world at HPWR sites. The resulting byproducts from this consumption of these fuel rods would be radioactive only for a few hundred years rather than the current timeline of thousands of years for HPWR waste products.

Given that there are no LFTR reactors using thorium in operation, nor even under construction, this is clearly the long-term solution to our rare earth minerals problem.

Because trade negotiations are exclusively a government-to-government process, these solutions must originate with the federal government. The short-term solution is for the federal government to begin a purchasing program of domestic thorium tailings and storing the ore for later use in thorium-based LFTR types of reactors. This is not without precedent since the government had just such a program under the auspices of the Defense National Stockpile Center which has a small stockpile of thorium ore.

Further, Congress could authorize ORNL to begin a program of cooperation with private industry to develop practical designs for LFTR-type reactors to produce power as a template to replace the aging nuclear reactors in the U.S. Needless to say such a power plant would be a zero-emission point source for electrical generation.  

Without such a two-pronged approach, the Chinese will be able to withhold rare earth minerals which will significantly impact the modern 21^st Century economic sectors of electronics and automotive industries, where the bulk of these minerals are used.  

Mac McDowell worked for over twenty years as a government scientist and is now the Chief Technology Officer at Quantum Industrial Development Corp.