But the start of a revival may be underway. Molycorp is trying to restart mining by 2012. Another company, Thorium Energy, which owns an enormous swath of land in Idaho's rare-earth-rich Lemhi Pass, is seeking investors. Both Smith and Thorium Energy CEO Ed Cowle have been trekking to Washington to talk to congressmen, senators, and agency officials.
Part of their problem, they say, is getting people to realize there is actually a problem. "This portion of the supply chain is buried deep," says Smith. "You really have to understand this whole supply chain concept. I sit down with car companies and wind turbine companies, and the first response you will get is 'Oh, I don't worry about that. I buy my motors or generators from this company or that company and I didn't know there were rare earths in them.'" As Jack Lifton, a longtime metal analyst, says, "The Chinese are depending, as they always do, on the myopia of the American investment community that only sees to the end of its nose."
Some say the concerns are overblown, that China will do everything it can do to ensure steady exports. And for certain technologies, researchers say there are potential alternatives to rare earths. The leading technology in electric batteries, nickel metal hydride, requires them, but a possible alternative, lithium ion, does not. "Lithium batteries have higher energy and power," says Gary Yang, a scientist at Pacific Northwest National Laboratory. "That is their advantage over rare earths." But lithium ion batteries require years more research.
Nevertheless, a global quest for new mines is dawning. "They are all out looking for money," says Richardson. 'The Canadians, the Australians, Molycorp here in the U.S., Thorium Energy—all these mines are looking for big bucks, but it's high risk." Environmental issues can crop up, as they have in the past for Molycorp. Investors can pull out, as they have in Australia. A new mine will cost hundreds of millions.
On Capitol Hill, interest is tepid but picking up. "Folks are finally starting to say, 'How are we going to advance the ball?' " says Green. "The Chinese are expected to consume all their production by 2012, 2013, or 2014. I think this needs to cause alarm in the U.S. government." In 2007, supporters managed to secure an earmark for a Defense Metals Technology Center in Ohio, which advises the military on strategic metals.
Last month, Rep. Mike Coffman, a Colorado Republican, slipped an amendment into the House's defense budget bill that would require the watchdog Government Accountability Office to review rare-earth concerns. And Sen. Evan Bayh, an Indiana Democrat, has just proposed requiring the defense department to evaluate the extent to which the country's weapons are dependent upon rare earth metal supplies "that could be interrupted."
But that's about it. So far, the focus of most politicians and the American public is still at the top of the supply chain—on the gleaming turbines and electric vehicle prototypes—rather than on the dusty metals at the bottom.