A U.S. House of Representatives subcommittee hearing Tuesday addressed the concern that domestic demand for minerals like rare earth elements far outweighs domestic supply, forcing the United States to depend on China, a nation with its own rising demands for the minerals.

The resources in question are called "critical minerals," which include rare earth elements such as yttrium, neodymium and lanthanum -- used in familiar consumer products and military equipment and weapons -- as well as more commonly known minerals such as copper.

The United States has large supplies of both, and was once the only exporter of rare earths, but because of market pressure, regulatory issues and aging, expensive-to-upgrade equipment, the United States stopped mining rare earth minerals in the last few decades.

Now, the United States relies on China almost exclusively for rare earths. The U.S. Geologic Survey estimated that China produced 130,000 tons of rare earth oxide last year and supplied 92 percent of the U.S. supply of rare earth metals from 2006-09, while France supplied 3 percent and Japan supplied 2 percent.

The U.S. domestic supply comes from one plant.

Molycorp, Inc. has operated under different owners since the 1950s and was once the only producer of rare earth elements in the Western Hemisphere, said lobbyist Andy Davis.

It stopped producing in 2002, Davis said, in part because permits were expiring but also because of China's ability to sell rare earth elements cheaply. Molycorp started mining again in December as interest increased in the resources, "particularly in clean energy" where rare earth elements are used in solar, wind and hybrid vehicle technology, he said.

At Tuesday's House energy subcommittee hearing, scientists, academics and members of Congress agreed that lessening U.S. dependence on China for these materials was of primary importance. Relying on China "is not a sound approach for the country," said U.S. Rep. Rush Holt, D-N.J.

But there was little agreement on how to establish reliable sources for the rare elements.

Robert Jaffe, a theoretical physicist at the Massachusetts Institute of Technology who had led a recent study on critical minerals, emphasized a strategy of finding out exactly what critical mineral resources the United States has, researching economical production and use of the elements and recycling products that contain rare earth elements.

Most agreed that the USGS needed to develop a detailed inventory of U.S. and global critical mineral resources.

A number of the experts and lawmakers endorsed substitution efforts, which replace critical minerals of unreliable supply with easier to find materials, and recycling, in which products like cellphones and iPods can yield minute quantities of rare earth elements.

However, some committee members and witnesses disputed the importance of substitution and recycling compared with finding more sources for the minerals.

Rep. Doug Lamborn, R-Colo., who led the meeting, said he would introduce legislation this week that would direct the U.S. Department of Interior to investigate the country's critical mineral needs and ways of meeting those demands with domestic production.

earlier related report
Glencore shares to start trading in Hong Kong
Hong Kong (AFP) May 25, 2011 - Shares in commodities giant Glencore were set to start trading in Hong Kong Wednesday, a day after the world's biggest initial public offering this year drew a tepid response on its London debut.

Switzerland-based Glencore, the world's biggest commodities trader by revenue with $145 billion in 2010, has raised about $10 billion in a dual listing in London and Hong Kong, valuing the business at nearly $60 billion.

Trading on the Hong Kong bourse was scheduled to begin Wednesday morning, after shares in London sank to 525 pence ($8.49) at close on Tuesday, or 0.84 percent below its IPO price of 530 pence each.

The float had been among the most anticipated of the year, allowing investors to tap the surging commodities market driven by demand from Asia, particularly China and India, for resources to power their economies.

The commodities behemoth has said it had already secured $3.1 billion from so-called cornerstone investors, including sovereign wealth funds in Singapore and Abu Dhabi, who have subscribed to 31 percent of the shares on offer.

The firm has said a secondary listing in Hong Kong will allow it to build a "long-term mutually beneficial relationships" with the city's investors, and enable it to draw on demand from resource-hungry Asian markets.

Glencore is selling 31.25 million shares in the Hong Kong offer at a HK$66.53 ($8.55) per share. The Hong Kong retail offer represents 2.5 percent of the total sale, while the remainder was sold in London.

It plans to use funds raised by the listing to pay down debt, boost its stake in Kazzinc, a zinc producer with core operations in eastern Kazakhstan, and finance other projects to expand its business.

Ratings agency Moody's said the move would improve the group's ability to raise funds, giving it access to other forms of financing for future acquisitions.

Founded in April 1974 by trader Marc Rich, Glencore operated initially out of an apartment in central Switzerland's Zug canton before quickly emerging as a major player in commodities trading.

From metals, minerals and crude oil, the group moved into agricultural goods and started in the late 1980s to expand to owning mines.

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