By Shihoko Goto — Exclusive to Magnesium Investing News
With gas prices showing no signs of coming down, hopes for more affordable fuel-efficient cars are rising ever higher. For magnesium producers, such expectations are particularly strong given the metal’s potential to produce more cost-effective and lightweight magnesium-ion batteries for automobiles. In addition, magnesium producers may find more investors coming from the defense industry and green technology sector.
Magnesium and rare earth elements have the potential to “increase combat effectiveness,” said Dennis McGinn, President of the American Council on Renewable Energy and retired Vice Admiral of the US Navy. Speaking at the Technology & Rare Earth Metals Center’s annual conference in Washington, DC last week, McGinn pointed out that portable military packs that currently weigh about 25 pounds could be reduced to about five pounds per pack with technological advancements, including making better use of rechargeable ion batteries.
Making greater use of magnesium in personnel armor protection, tanks, artillery, armored vehicles, and other military equipment has been strongly urged by many defense contractors and by the US military itself. The Department of Defense is the single biggest oil consumer in the US, which uses the most crude in the world. In 2010, the Defense Department used 125 million barrels of oil, and it is projected to spend about $150 billion over the next decade on energy costs alone. The department has, however, pledged to draw 25 percent of its energy from renewable resources by 2025, and developing more energy-efficient defense equipment that will rely heavily on metals, including magnesium, is high on the research agenda.
Decreasing military dependence on hazardous fuel convoys could also lead to fewer deaths in combat zones. According to the American Council on Renewable Energy, twelve percent of army casualties in Iraq and 35 percent of army casualties in Afghanistan in 2007 were due to fire hazards. In short, not only is it in the military’s financial interest to increase use of magnesium and other metals, but such investments could also help the government better protect its soldiers.
“A vision must be developed for creating new ground and air vehicle structural applications in addition to new personnel protection and armor applications,” according to a study on magnesium alloys in army applications by Heidi Maupin of the US Army Research Laboratory’s weapons and materials research directorate, Eric Nyberg of materials processing at Pacific Northwest National Laboratory, and Suveen Mathaudhu of the US Army Research Office’s materials science division.
In its quest to make greater use of magnesium and other rare earth materials, the Department of Defense is finding an unlikely ally in many environmental groups that are looking to minimize damaging environmental impact through energy efficiency, as well as in the Department of Energy. Energy captured by wind turbines, for instance, is stored as hydrogen and uses magnesium as the metal and mineral oil as the liquefying agent. The blades in the turbines in turn may potentially use magnesium as a sturdy and lightweight metal that is a quarter of the weight of steel and a third lighter than aluminum.
It is “ironic,” though, that the Department of Defense and environmentalists are taking the lead in developing magnesium and other rare earth in the US, said Carol Raulston, senior vice president of communications at the National Mining Association.
After all, it was growing pressure from environmentalists concerned about the negative impact of rare earth mining, together with increased price competition, that led to a steep decline in magnesium mining in the US in the first place. China now dominates the magnesium market, cornering well over 90 percent of total global supply. Today, US Magnesium is the sole manufacturer of the metal in the country.
Jeff Green, President of industrial consulting group J.A .Green & Company, agreed, stating that the US needs to define its strategy regarding rare earth supply instead of simply leaving it to the market forces that have led to China’s overwhelming dominance in the industry.
Securities Disclosure: I, Shihoko Goto, hold no direct investment interest in any company mentioned in this article.
CORRECTION: Jonathan Ossoff, Senior Legislative Assistant in the office of U.S. Rep. Hank Johnson, was misquoted when this article was originally published on March 22. His quote has subsequently been removed.