Rare-earth metals aren't particularly rare, but they are precious.
Rare-earth elements such as neodymium and lanthanum are used in a wide range of high-tech applications, from computer hard drives to electric cars to precision-guided munitions.
But China has become the world's dominant provider of rare-earth elements, making the availability of rare earths a growing national economic and security issue.
"The U.S., being the high-technology society it is, uses more than anyone else in the world - but produces none," said Jim Withers, CEO of Tucson-based Materials and Electrochemical Research Corp. (MER Corp.).
MER has set about to change that, with an award-winning new technology to convert rare-earth mineral ore into high-purity metals.
MER was recently recognized with a prestigious R&D 100 award - the company's ninth since 1990 - for its new method for processing rare-earth metals.
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The technology, developed under a U.S. Energy Department grant, initially focuses on production of neodymium used to make high-strength "supermagnets." But the technology can be used to extract any of the 17 rare-earth elements, which are found together in ore bodies.
On Monday, the Energy Department notified MER that it would get a $1 million contract to commercialize its rare-earth processing method, Withers said, adding that a formal agreement still has to be finalized.
Rare-earth metals are considered strategically important to defense, and the Defense Department and other agencies have been studying the issue.
Among other things, rare-earth metals are used to make supermagnets in precision-guided munitions such as the Tomahawk cruise missile, produced by Tucson-based Raytheon Missile Systems, said a June report by the Congressional Research Service.
"We're counting on China to supply all that stuff that is critical to our defense," said Withers, who founded MER in 1985 with current company president Raouf Loutfy.
From the 1960s to the 1980s, the United States was the leader in global rare-earth production, congressional researchers noted. Since then, production has shifted almost entirely to China, in part due to lower labor costs and lower environmental standards.
The last operating rare-earths mine in the U.S., in Mountain Pass, Calif., closed in 2002 amid environmental problems including the release of radioactive waste.
But China has dramatically increased prices for rare-earth metals, added a 25 percent export tariff and cut exports, including a 72 percent cut in June 2010, according to the Congressional Research Service.
And in September 2010, China temporarily cut rare-earth exports to Japan - apparently over a maritime dispute, though China officially denied that motive.
Rising prices for rare earths and availability concerns have led to a rush to find new sources of rare-earth metals in the U.S., Japan and other nations.
Last week, Japanese researchers announced the discovery of huge deposits of rare-earth elements on the floor of the Pacific Ocean near Hawaii.
In the U.S., Colorado-based Molycorp Inc. late last year resumed mining at Mountain Pass, after meeting environmental requirements. In mid-June, Molycorp said it had raised $781 million to expand mining operations and establish refining and magnet-manufacturing facilities.
Meanwhile, the industry and the government are working to develop more efficient rare-earth processing technologies, said Keith Delaney, executive director of the Rare Earth Industry and Technology Association in Greenwood Village, Colo.
Delaney wasn't familiar with MER's technology, but said an improved metal-extraction method "would be extremely important to the global industry."
It will take years to develop significant new domestic production capacity, Delaney said. "We've only got a few years to get this down," he said.
The timing is right for MER's new processing technology, Withers said, adding that the DOE commercialization effort will take about two years.
Though primarily a research firm, MER has plenty of experience at taking technologies into production.
The company already makes small batches of high-purity titanium at its Tucson headquarters and lab complex on South Kolb Road. The company also makes carbon fullerenes and nanotubes, tiny molecular structures used to strengthen composites.
MER's rare-earth processing method already has been done on a small scale at the company's plant and can be scaled up quickly, Withers said.
Tucson Tech appears Tuesdays in the Star. Contact Assistant Business Editor David Wichner at dwichner@azstarnet.com or 573-4181.