Playing catchup on rare earth metals
Manhattan-style project needed to gain ground on China
THREE YEARS AGO, my partners and I founded Phoenix Tailings in a Cambridge backyard, creating a process to refine mining waste into rare earth metals. These are the 17 different elements that are found in almost every piece of modern technology, from smartphones to electric cars to fighter jets. Currently, their production creates a lot of pollution. Our goal is to be the world’s first truly clean mining company, producing earth metals without waste or carbon emissions. Since we started the company, rare earth metal production has gone from a niche topic to a major issue driving both domestic and foreign policy.
China currently controls nearly 97 percent of these key resources. Despite the best efforts of America and our allies, prosperity has not made China more democratic. Instead, a rising China is more repressive at home and more belligerent abroad. Their dominant control of rare earth metals is a major advantage as tensions escalate between China and other countries. If China cut off or severely restricted rare earth metal exports during a conflict — as they briefly did to Japan in 2010 — the results would be catastrophic.
Despite the name, rare earth metals are relatively common. They are found throughout the world, including abundantly in the United States. The challenge is not finding or mining these elements but turning the raw materials into the final metal products used in manufacturing. Due to decades of underinvestment, our domestic supply chain lacks the necessary capacity. As a result, our country has only one rare earth metals mine and sends its materials to China for processing.
This is a difficult problem but one that we can solve by harnessing the American entrepreneurial spirit. We do not need to relax environmental rules to let mines or processing companies emit the kind of pollution they do in China and other authoritarian countries. Nor do we need to mimic China’s top-down, state-controlled research and development model. Instead, we can build a supply chain insulated from China and other rivals by fundamentally changing the process around processing rare earth metals.
There are simple public policy changes that will encourage rare earth metal innovation. The rapid production of coronavirus vaccines under Operation: Warp Speed shows how effective federal funding can be at speeding up scientific progress. Similar public-private partnerships could be used to build domestic manufacturing capacity, with the government providing seed capital for startups and other companies working on these crucial issues.
Additionally, there should be a clear pipeline for domestic startups to supply large defense contractors. Right now, the companies building our missiles, fighter planes, and drones rely on China, not only for rare earth metals but for other vital components. This is a major vulnerability as China becomes increasingly expansionary and militaristic. Creating this pipeline and increasing the incentives to use domestic suppliers will quickly move our defense contractors away from dependence on China.Even as China becomes more powerful every year, they cannot compete with the United States in innovation. Our higher education system is the envy of the world. American entrepreneurs created the major advances in computers and the internet and American companies were at the forefront of developing coronavirus vaccines faster than anyone thought possible. The rare earth metal challenge will be solved the same way — by free people working in a dynamic economy assisted by their government.
Nick Myers is the co-founder of Phoenix Tailings, along with Dr. Tomas Villalon, Michelle Chao, and Anthony Balladon. Phoenix Tailings is a Woburn-based startup that has received support from major venture capitalists, the Department of Energy, and the Department of Defense.