Scott Honan, environmental manager for Molycorp Minerals, talks about the Molycorp rare earth mine near Interstate 15 in Mountain Pass. (LaFonzo Carter)
Wesley G. Hughes
Redlands Daily Facts
MOUNTAIN PASS - No one was on their way to Vegas 1.3 billion years ago when a large, high-quality deposit of rare earths formed here.
Molten rock was pushing up through the Earth's mantle in eastern San Bernardino County and leaving a sizable deposit of the metals just poking its nose through the planet's surface.
Uranium hunters stumbled across it around 1950 - rare earths are often found in the company of heavier radioactive metals - and eventually it came under the ownership of Molycorp, a Colorado mining company.
Today, according to Molycorp CEO Mark A. Smith, "potential buyers are beating down the door to get those rare earths," which Molycorp stopped mining in 2002 because of environmental problems - and China could do it cheaper, anyway, he said.
Things change. China has virtually cut the world off from its supply of rare earths.
The Asian nation has the world's largest deposits, but Mountain Pass is No. 2, experts say, and Molycorp is back in the race.
Why should we care?
Rare earth metals - or oxides - are vital commodities for a range of products, from smart phones to smart bombs.
And the company's Mountain Pass Mine promises to make lots of money for Molycorp.
It's potential customers can breathe a sigh of relief now that there is another source of the elements. They are so relieved they have pushed Molycorp from a 52-week low of $12.10 on the New York Stock Exchange to a Jan. 5 high of $62.10. It has moderated a bit since the high and closed at $42.99 on Friday, down $3.55 on the day.
Molycorp is tearing down its old plant and building a $500-million operation about 15 miles from the Nevada border to mine and process the ores.
The company celebrated earlier this month with a groundbreaking and barbecue for the board of directors, top management and employees at the site. They are calling it Project Phoenix, Smith said.
But not everyone is happy with the operation.
A national environmental group, Western Watersheds project, criticized Molycorp's 8.6-mile proposed gas pipeline, which it says traverses protected desert tortoise habitat.
Western Watersheds filed a complaint Jan. 14 in U.S. District Court in Los Angeles, seeking to halt the Ivanpah Solar Project, which it says got an inferior examination in its Environmental Impact Statement to help it meet a deadline. That deadline has been extended a year to Dec. 31, and Western Watersheds wants a proper EIS done, which it predicts will halt the power project being built by BrightSource Energy.
"We want it to go away," said Michael Connor, California director for Western Watersheds.
He was unfamiliar with Molycorp's core project, but the pipeline was mentioned in the complaint his group filed.
Still, the Mountain Pass project is gaining interest from potential customers, cut off from China's rare earths but interested in what's in Molycorp's huge open-pit mines.
"We are getting attention - a lot of attention," Smith said on the day of the barbecue.
He expects the new plant to be operational by mid-2012.
SAFER MINING?
Jim Sims, Molycorp's director of public affairs, and Scott Homan, the company's environmental manager, explained to visitors at the mine how environmental problems that played a role in halting production back in 2002 have been eliminated by new technology.
Before Molycorp halted production, the company piped liquid residue - mostly salt water - to evaporation ponds in Ivanpah Dry Lake - a scant 10 miles from Mountain Pass.
During a process of putting rinse water through the 8-inch plastic pipeline, pressure got too great. The pipe burst in several places. A buildup of radioactive material inside the pipe led to contamination of the aquifer under the dry lake.
That raised a public outcry that included concerns from county regulators and environmentalists and the shutdown.
During earlier operations, Molycorp had been the biggest user of hydrochloric acid west of the Mississippi River, Sims said. The acid was used to separate the rare earths from the ore. In order to stop the acid's action after separation, Molycorp neutralized it with sodium hydroxide and the product of the combination became salt water.
But by using electricity with chemistry, a process known as electrolysis, to treat the salt water, Molycorp found they could change it back into its original hydrochloric acid and sodium hydroxide.
Voila! The chemicals could be re-used almost endlessly. No longer will 15 to 25 tanker trucks full of acid be arriving each day at Mountain Pass and no longer will the salt water be piped to Ivanpah Dry Lake for evaporation. Nor will it get the chance to build up radioactive scale inside the miles of drainpipe.
In addition, Molycorp will no longer buy the most expensive electric power Edison sells. It will generate its own. Another 8-inch pipeline is to be built to carry low-polluting natural gas, which will be used for power generation and to reduce the use of diesel at the mine.
For Molycorp, these moves have given immense benefits: The company has dramatically reduced its environmental impact and has led it to claim it has cut its costs to half those of the Chinese today. And Sims said that soon Chinese costs are likely to double because of environmental changes Chinese miners are being forced to make. More good news for Molycorp.
CONCERNS
All that could be jeopardized by Western Watershed's complaint.
Molycorp said repeatedly that it had "crossed all the t's and dotted all the i's" and it had no more hoops or hurdles for the project.
That said, the company faces a hearing before the Federal Energy Regulatory Commission, it was learned Friday. A Molycorp spokesman could not be reached for comment Friday afternoon.
And there's still environmental concerns over the tortoise and the pipeline.
When Connor - the California director of Western Watersheds - was told about some of Molycorp's efforts to be environmentally friendly,he said: "That doesn't help the tortoise."
BENEFITS FOR THE COUNTY They are predicting it will have long-time benefits for the county through new jobs, for business and for property and sales taxes.
Most of the 700 construction jobs for the new plant will come from near and far. Most of the 300 permanent jobs will most likely be filled by Las Vegas residents, because it is closer to Mountain Pass than population centers in California.
But First District Supervisor Brad Mitzelfelt, whose district includes Mountain Pass, called the project "great news. It's been a long time coming.
"I think we will put a lot of people to work. I just don't have the numbers. It's a major mining operation that will use a lot of trades and professions."
Mitzelfelt also predicted Molycorp will be buying supplies locally.
Sims, Molycorp's director of public affairs, confirmed that.
"Molycorp is trying as much as possible to buy equipment and supplies in San Bernardino County," he said.
SUCCESS?
Molycorp officials say that they don't know the full extent of the rare earth to be found at Mountain Pass. They won't know until they dig for it, they assert.
Since 1865, various minerals have been mined in the historic Clark Mining District, where Mountain Pass is located, according to the project's environmental review.
For 57 years, Molycorp and its predecessors have recovered bastnasite, which contains 14 rare earth elements.
Its initial use was as a concentrate called mischmetal, which was used as flints for cigarette lighters and in some metallurgical applications.
In the 1960s, the EIR continued, additional mineral recovery operations were added to allow separation and recovery of individual rare earth elements, including europium, a critical element for making color television.
At the time, Mountain Pass was the world's only commercial source of europium.
Subsequent rare earth elements were produced, and Molycorp plans to mine more, bringing to 10 of 14 rare earth elements that will be produced at what is now a 55-acre site, with plenty of room to expand.
The 55 acres is part of more than 2,000 owned by the company, which also has federal mining claims for the next 30 years on another 8,000 acres.
With a limited world supply of rare earths, Molycorp is in a good financial position, said Christopher Reed, chemistry professor at UC Riverside.
The marketplace - whether its for oil, gold or rare earth elements - is full of cut-throat players, Reed said.
As for Molycorp, he said, "Time is on their side. In the longrun, they really can't fail."