ROBERT SIEGEL, host:

Cell phones, computers and many other must-have items are made using rare earth minerals, and the business of those minerals has mostly been centered in China. But that is changing now that China has cutback on rare earth exports.

As NPR's Ina Jaffe reports, that has given a California company a reason to open up an old mine and a chance to make a profit.

INA JAFFE: Approaching the rim of rare Earth pit mine in the California desert, you expect to something, well, rare.

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Mr. SCOTT HONAN (Environmental Manager, Molycorp Minerals): Don't venture out over the edge.

JAFFE: But Scott Honan, the mine's environmental manager, points to a wall of rock as boringly brown as the vast desert around it. Still it's thrilling to him.

Mr. HONAN: Over the course of the next few weeks, we'll start mining this whole western wall of our open pit. And I, like a lot of my co-workers here, have been waiting for this for a long time.

JAFFE: Because nothing has been mined here for nearly a decade. The property known as Mountain Pass was owned by oil companies most recently Chevron. But after 50 years of operation, it was no longer cost effective to compete with the Chinese. There were also permit problems and environmental issues.

Mr. MARK SMITH (CEO, Molycorp Minerals): It was probably a good thing that we were shut down and we could reevaluate the first 50 years of our business.

JAFFE: Says Mark Smith, the CEO of Molycorp Minerals, which bought the mine in 2008.

Mr. SMITH: Take a look at the strengths that we had, the weaknesses, try to re-strategize how we wanted to run this business and get it back on its feet.

JAFFE: Smith says that the first thing they decided was that when the mine re-opened someday, they wanted to run a cleaner operation.

Mining rare earths is the easy part. But the 17 elements that comprise rare earths are naturally found mixed all together. Smith says that the usual method for separating them requires a witch's brew of chemicals.

Mr. SMITH: Sulfuric acid, hydrochloric acid, nitric acid, sodium hydroxide, sodium bicarbonate, ammonia...

JAFFE: These chemicals used to be trucked up to Mountain Pass in as many as 20 tankers a day. And the byproduct of the separation process was saltwater, 850 gallons a minute piped into evaporation ponds.

Now Molycorp has invented a method of taking that saltwater and reprocessing it back into the two main chemicals they use to separate the rare earth. It will make the production cleaner and a lot cheaper.

Mr. HONAN: In this particular circuit, we're separating the elements neodymium and praseodymium from lanthanum and cerium.

JAFFE: Scott Honan says they're getting the kinks out of the new process while a new plant is being built.

Mr. HONIN: So when we build the big plant, we'll have, you know, an experienced group of operators, and we'll have a really good understanding of the technology so that it will run very smoothly.

JAFFE: Molycorp plans to open the new plant in 2012. They expect to produce as much as 40,000 tons a year. And that can't happen soon enough to suit Congressman Mike Coffman, a Republican from Colorado.

He's concerned about national security. Rare earths, he explains, are used in a lot of military equipment.

Representative MIKE COFFMAN (Republican, Colorado): Everything from night-vision goggles to fighter aircraft to precision-guided munitions.

JAFFE: So Coffman is drafting legislation that he says will support the mining, processing and stockpiling of rare earths in the United States.

Rep. COFFMAN: In case we have an extreme shortage of these metals to where we're not able to produce the kind of weapons systems that we need for national security that are reliant upon these metals.

JAFFE: Like the congressman, Ed Richardson has also pushed the government to stop depending on China for rare earths. He's vice president of a company that makes magnets with military applications, and he says that the United States is in a global competition for rare earth minerals.

Mr. ED RICHARDSON (President, Thomas & Skinner, Inc.): The gap in terms of the world demand outside of what China has said they will export is in the order of about 100,000 tons.

JAFFE: And Richardson adds that as China's industry grows, its exports of rare earths will continue to shrink.

Mr. RICHARDSON: They're going to use all the rare earths they mine and then some. So, many in the industry think that that they will eventually not export at all, that they will eventually import rare earths.

JAFFE: Meaning that one day, China might not be Molycorp's competitor but one of its customers.

Ina Jaffe, NPR News.

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MICHELE NORRIS, host:

More coming up on ALL THINGS CONSIDERED.

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