The chief executive officer of American Elements Corp., an advanced materials manufacturer, has urged the White House to nationalize the Mountain Pass rare-earths mine in California as a way of rebuilding the nation’s only rare-earths mine while also restoring confidence in the sector within the United States.
Michael Silver, the head of American Elements Corp., made his appeal during a meeting to President Donald Trump’s chief strategist, Steve Bannon, Bloomberg reported.
The meeting, which he said was also attended by presidential deputy assistant Sebastian Gorka and White House Chief of Staff Reince Priebus.
The Mountain Pass Mine was acquired at auction in June by MP Mine Operations, a consortium led by Chinese rare earths mining company Shenghe Resources, for $20.5 million. The group that drew objections from rival bidders because of its ties to the Chinese government.
The mine should be converted to a national laboratory “dedicated to rebuilding America’s rare-earth mining industry so the world knows it is safe to build high-tech manufacturing plants in the U.S.,” Silver said.
The production of rare-earth minerals is dominated by low-cost Chinese companies. Molycorp Minerals and its parent, Molycorp Inc., filed for bankruptcy in 2015 after prices for the minerals fell below the mine’s costs to produce them.
Silver said he’s proposing the U.S. government apply the Takings Clause of the 5th Amendment and acquire Mountain Pass by eminent domain.
Any attempt to make the mine commercially viable would fail because no one can compete with China, which accounts for almost all the world’s rare-earth production, Silver said.
“The perception is the only place in the world you can go for reasonably priced rare earth materials for your product is in China,” he said. “You have to change that perception.”
Los Angeles-based American Elements manufactures metals and chemicals and has a catalog of more than 15,000 products, according to its website. Silver said his company did business with Molycorp before its Mountain Pass became idle. Silver was among the first Americans to set up a production and distribution supply chain from rare earth mines in Inner Mongolia and China to North America and Europe, according to documents on the company website.
The Chinese mining company, Leshan Shenghe Rare Earth Co., owns nearly 10 percent of the business that took over the mine and mineral rights, MP Mine Operations LLC, according to court records. Leshan’s stake doesn’t give it voting rights, MP Mine said in the filing.
Molycorp went into bankruptcy while trying to perfect an advanced, experimental ore processing system that cost hundreds of millions of dollars. Oaktree provided the loans that funded that system and got ownership of it under a compromise in bankruptcy court that split up the company’s assets.
Oaktree owns the most advanced ore-processing equipment at the mine, while JHL and QVT control the most important mineral rights at the site