Sale of largest US deposit of elements used in zero-emission vehicles due Wednesday
When Tom Clarke first heard about rare earths a year ago he had to look up what they were on Wikipedia. Now the coal miner is leading a bid by a consortium to reopen a California mine that is the only major US deposit of rare earths — elements that are poised to benefit from increasing demand due to their use in magnets that go into electric car motors.
“The more I got involved in rare earths, the more I realised these elements are going to be in increasing demand [in electric vehicles],” says Mr Clarke. “So our hope here is to help facilitate the re-opening of the mine. We think there is a reliable market for it.” The Mountain Pass rare earths mine, located about 50 miles south of Las Vegas, was owned by Molycorp, a US natural resources group that filed for bankruptcy in 2015.
The mine is now due to be sold at auction on Wednesday, and Mr Clarke’s ERP Strategic Minerals has teamed up with Swiss private equity firm Pala Investments and Australian rare earths exploration group Peak Resources to offer $1.2m.
A rival bid is expected from a consortium involving hedge funds that are among Molycorp’s creditors — including JHL Capital Group and QVT Financial of the US — and Chinese rare earths mining company Shenghe Resources. JHL declined to comment on behalf of the consortium.
The auction is due to be closely watched by the US authorities, because rare earths are used in the defence industry — for example in missile guidance systems. The Committee on Foreign Investment in the US, which reviews certain proposed purchases of domestic assets by overseas buyers, could potentially have a role scrutinising the acquirer of the Mountain Pass mine.
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