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US Coal Fields Potential Sources of Rare Earth Minerals

The US Department of Energy is offering $32 million in funding for the production of rare earth and critical minerals, mainly cobalt and lithium, from coal-based sources to reduce dependency on China and other countries.

The funds come from the Bipartisan Infrastructure Law, which aims to build mineral processing sites across the US, enabling more control of supply and pricing.  Money from the Bipartisan Infrastructure Law may be used for engineering analyses, design studies, development of facilities for domestic production and refining of rare earth elements.

While coal mining now only represents 11% of US energy consumption, those same coal fields may be used to extract rare-earth elements and critical minerals including lithium, cobalt, nickel and manganese, minerals which are essential for transitioning to green energy while lessening dependency on foreign sources.

The Department of Energy hopes that after initial funding, private funding may occur as companies are attracted to mine for other minerals beyond coal itself.

This new wave of mining for rare earth minerals could have a significant impact on coal mining communities across the United States, following years of reductions in capacity as the country pursues an energy policy of transitioning to renewable resources.

Video Spotlight:  

This post is based on the Supply Chain Dive article, Energy Department offers $32M for critical mineral supply chains, by Kate Magill, July 24, 2023, and the YouTube video in the Spotlight.  Image source: Aerial Archives/Alamy Stock Photo

Discussion Questions:

1.  Brainstorm ideas for how the US Department of Energy may continue to focus on ‘clean energy’ in shifting to domestic mining for rare earth minerals?

Guidance: Here are a few possible ideas:

1) Work with Congress to set aside additional funds for development of new processes and technologies to mine rare earth minerals with lower levels of waste.

2) Implement clean energy extraction processes at the onset of setting up facilities (as opposed to retrofitting afterward).

3) Financially incentivize mining companies to meet clean energy targets beyond the start-up period(s).

2. What impacts could domestically mining rare earth minerals have on global supply chains?

Guidance: Here are a few possible ideas:

1) New project management skills for launching rare earth mineral extraction processes in the US.

2) Need for unique mining equipment for retrieving rare earth minerals (different/augmented equipment vs mining regular coal).

3) Potential reduction in rare earth mineral prices as new sources of supply are created/developed.

4) Possibilities for exporting rare earth minerals from the United States would impact transportation capacity and pricing.

5) Potential reallocation and relocation of labor from other energy sources (e.g. solar, wind, deep water oil).

6) Lower inflation from additional energy sources (driving down the cost of heating/cooling).

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