but can it mine them?
NioCorp Corporate Controller Jeff Mason shows investors a rock sample while the company's CEO Mark Smith listens, Oct. 6, 2021 in Elk Creek, Neb. The company hopes to build a mine in southeast Nebraska to extract rare minerals if it can raise $1 billion.
(AP Photo/Josh Funk)
NioCorp Chief Operating Officer Scott Honan tells a group of investors about the plans for a proposed mine in southeast Nebraska, on Oct. 6, 2021 in Elk Creek, Neb. The company hopes to build a mine in to extract critical minerals if it can raise $1 billion.
JOSH FUNK
Wed, December 22, 2021
ELK CREEK, Neb. (AP) — Far beneath the rolling cropland of southeast Nebraska sits a deposit of elements that can be used to make steel and aluminum stronger. Extracting them would seem to be just the kind of project that President Joe Biden has argued is needed to reduce the United States' dependence on foreign suppliers of critical minerals.
But a proposed mine to recover the minerals — niobium, scandium and titanium — is instead providing a case study in the difficulty of actually launching such projects in the U.S.
The challenges start with the massive amount of money needed to build a mine but also include fickle customers, the nation’s tougher environmental regulations, volatile markets and intense international competition. As a result, despite years of efforts, the mine in Nebraska might never be built.
“People can spend their careers — all of their life — working for a mining company and never produce an ounce of metal,” said analyst David Abraham, who wrote a book about mining rare earth elements.
Without a doubt, money is the biggest hurdle to mining company NioCorp's plans to build a mine about 80 miles (130 kilometers) south of Omaha. The company estimates it needs about $1 billion and so far, it hasn't secured enough major investors and the federal government hasn't shown much willingness to share that cost.
The U.S. is dependent on imports for the 35 substances it currently designates as critical minerals, including niobium, scandium and titanium. The U.S. relies entirely on imports for 14, and foreign producers provide more than half the supply of another 14 substances, led by China.
Recently, tight supplies caused prices to soar for the critical elements used in lightweight magnets for electric vehicles and other high-tech products. In 2011, new export restrictions by China caused abrupt shortages of 17 rare earth elements.
Niobium is mixed with steel to make the alloy stronger, lighter and more heat and corrosion resistant. It is used in bridges, oil rigs, pipelines and jet engines. Most of the U.S. supply comes from open pit mines in Brazil. The U.S. has never had a significant shortage, but the government is concerned enough that it keeps a supply in its national defense stockpile.
NioCorp Corporate Controller Jeff Mason shows investors core samples the mining company has collected while NioCorp CEO Mark Smith listens, Oct. 6, 2021 in Elk Creek, Neb. The company hopes to build a mine in southeast Nebraska to extract rare minerals if it can raise $1 billion. (AP Photo/Josh Funk)
Scandium can make aluminum stronger, is used in some specialized lasers, and would be used more widely if greater supplies were available. Most comes from China, with smaller amounts produced in the Philippines, Russia, Canada and Kazakhstan
The titanium that NioCorp hopes to produce would primarily be used in paint production. Unlike niobium and scandium, there are a few U.S. mines, but more than half the titanium is imported from China and other countries.
Company officials say tests have found some of the most sought-after elements at the Nebraska site, but it's not clear yet whether there's enough to be commercially viable.
Even if NioCorp can come up with the money for its mine, its profitability could hinge on whether its minerals will be cheaper than foreign competitors' supplies.
“Simply knowing the existence of a mineral deposit that’s attractive geologically does not guarantee commercial viability,” said professor Rod Eggert, deputy director of the Critical Materials Institute at the Colorado School of Mines.
NioCorp has been actively exploring the site for seven years, drilling out samples from as deep as 3,000 feet (900 meters) below the surface. The company raised $6.2 million earlier this year to buy the land, and since 2015 has raised roughly $60 million.
Nearly half of NioCorp’s 6,400 shareholders live in Nebraska not far from the project. The proposal has received the key state and federal environmental permits it would need.
But the Nebraska project is one of dozens of critical minerals projects worldwide at various stages of development, competing for investors.
“I can assure you that as the largest shareholder of this company, there is nothing more that I want done faster than financing, and we’re working our tails off to get it done,” said NioCorp CEO Mark Smith, who holds more than 19 million shares and has loaned the company more than $2 million of his own money.
The Biden administration made rare earth elements a focus of its supply chain review earlier this year and is investigating the national security implications of relying so heavily on imports. A task force is planned to identify U.S. sites for production.
The new $1 trillion infrastructure plan that provides incentives for electrical vehicles and wind power is expected to boost demand for critical minerals.
“It always helps when the public sees that the government has an interest in these areas,” NioCorp’s Smith said. “But I’ve been in this business for an awful long time — over 40 years — and I think it may be time for us to quit studying these issues and start doing something about the issues.”
The titanium that NioCorp hopes to produce would primarily be used in paint production. Unlike niobium and scandium, there are a few U.S. mines, but more than half the titanium is imported from China and other countries.
Company officials say tests have found some of the most sought-after elements at the Nebraska site, but it's not clear yet whether there's enough to be commercially viable.
Even if NioCorp can come up with the money for its mine, its profitability could hinge on whether its minerals will be cheaper than foreign competitors' supplies.
“Simply knowing the existence of a mineral deposit that’s attractive geologically does not guarantee commercial viability,” said professor Rod Eggert, deputy director of the Critical Materials Institute at the Colorado School of Mines.
NioCorp has been actively exploring the site for seven years, drilling out samples from as deep as 3,000 feet (900 meters) below the surface. The company raised $6.2 million earlier this year to buy the land, and since 2015 has raised roughly $60 million.
Nearly half of NioCorp’s 6,400 shareholders live in Nebraska not far from the project. The proposal has received the key state and federal environmental permits it would need.
But the Nebraska project is one of dozens of critical minerals projects worldwide at various stages of development, competing for investors.
“I can assure you that as the largest shareholder of this company, there is nothing more that I want done faster than financing, and we’re working our tails off to get it done,” said NioCorp CEO Mark Smith, who holds more than 19 million shares and has loaned the company more than $2 million of his own money.
The Biden administration made rare earth elements a focus of its supply chain review earlier this year and is investigating the national security implications of relying so heavily on imports. A task force is planned to identify U.S. sites for production.
The new $1 trillion infrastructure plan that provides incentives for electrical vehicles and wind power is expected to boost demand for critical minerals.
“It always helps when the public sees that the government has an interest in these areas,” NioCorp’s Smith said. “But I’ve been in this business for an awful long time — over 40 years — and I think it may be time for us to quit studying these issues and start doing something about the issues.”
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