The idea that American big business can relied upon as some manner of trusted partner in setting the nation right now seems laughable. And it’s why it’s annoying to see the president’s continued attempts to assuage corporate ire, as if it will make a difference.
Note this story on CEO whining in the Wall Street Journal. US regulations are onerous. The environment is uncertain. Et cetera.
In continuation of the coverage of various US shortfalls, most recently in production of strategic materials, it is illuminating to look at the recent history of the Mountain Pass rare earth mining operation, once owned by Chevron, the energy giant with the new slogan — human energy.
By 2002, rare earth mining in the US was finished. Chevron owned Mountain Pass and had stopped operation.
“[Chevron wants] to be part of the rare earth mining industry once again … ” reads the press release.
In review, this appears to have been gold-plated bullshit, an attempt to feather-bed the operation for a future sale.
A local newspaper continues from 2007:
[A Chevron rep] said the mine, which has one of the world’s largest deposits of the element Neodynium, was last used in 2002. Neodynium is needed to create powerful magnets used in miniature electronics such as MP3 players and hybrid-vehicle engines, demand for which is rapidly growing, Knoepfle-Thorne said.
The price of the product was (once) very, very low. It just wasn’t economical to mine, she said.
Currently the company is extracting the rare elements out of a supply of previously stored ore at the site. Mining operations of new deposits of the elements could begin in the coming months and years, Knoepfle-Thorne said.
The military is also a major user of the elements for everything from jet engines to Patriot missiles, she said.
All bathwater. By 2008 Chevron had sold the mine to a consortium which included — surprise — Goldman Sachs. The consortium was renamed Molycorp.
Chevron Mining Inc. today announced that it has entered into an agreement to sell its Mountain Pass rare earth mining operations to Rare Earth Acquisitions LLC. The transaction is expected to close in late September, 2008.
REA is a special purpose company owned by Resource Capital Funds, Pegasus Partners IV, LP, The Goldman Sachs Group, Inc., Traxys North America LLC and Carint Group LLC. Included in the acquisition is the Molycorp name and upon closing, the company will be renamed Molycorp Minerals LLC.
If readers can see any visible corporate interests dovetailing with US national interest in clean energy innovation and/or restoring an American position in materials mining vis-a-vis the rest of the world, they’re better than I am.
However, if you’re only interested in short term profits based on cannibalization, offshoring, sales to Wall St. speculators and everything-must-go strategies …
Here’s a statement from the company’s page on its mining operations in the US:
Chevron also operates a molybdenum mine in Questa, N.M. Molybdenum is primarily used as an alloying agent in steel. We have scaled back development and production plans at Questa due to the dramatic price drop in the molybdenum market.
We continue to build on our record of safety. The Questa Mine was honored with the 2009 Underground Metal/Nonmetal Safe Operator of the Year Award and the 2009 Safety Innovator of the Year Award from the New Mexico Mining Association in cooperation with the New Mexico Bureau of Mine Safety.
Scaled back. Not profitable enough.
“Molybdenum production is concentrated in a relatively few countries, with China, the USA and Chile accounting for 80 percent of total world production in 2009,” reads this informative report.
“US production historically dominated world molybdenum production but as it declined Chilean output increased. Chinese molybdenum production was the largest in the world from 2002 to 2004 but declined in 2005 due to government-enforced mine closure. It then more than doubled between 2005 and 2008, to again become the largest in the world. US production, the second largest, rose steeply in 2004 and 2005, but is estimated to have fallen sharply in 2009.”