The department in a study of 14 elements zeroed in on five rare earths and found that supplies of dysprosium, which is used to make wind turbines and electric vehicles, may fall short of demand, said David Sandalow, the Energy Department’s assistant secretary for policy and international affairs.

The risk of disrupting supplies may increase as more clean- energy technologies are developed, even after China, which produces at least 90 percent of the world’s rare-earth metals, pledged to provide sufficient supplies, he said. The U.S. should restart mining rare-earth materials and promote recycling of products with these elements to meet demand, he said.

“Reopening domestic production is an important part of a globalized supply chain,” Sandalow said today at a conference sponsored by the Center for Strategic and International Studies in Washington.

Wind turbines, photovoltaic cells and electric vehicles account for about 20 percent of global demand for rare-earth metals, the Energy Department said in a report today. It takes 7 to 10 years to obtain permits to open a new mine in the U.S., the longest among the top-25 mining countries, according to the report. The Energy Department plans to begin research into critical materials and to work with Japan and nations in Europe to lower the risk of supply disruptions.

Molycorp, Lynas

Molycorp Inc., owner of the world’s largest non-Chinese deposit of rare-earth metals, and Lynas Corp. both plan to open mines in the next two years to meet demand, which is forecast by the Chinese Rare Earths Industry Association to rise almost two- thirds by 2015. Greenwood Village, Colorado-based Molycorp rose as much as 12 percent today in New York Stock Exchange composite trading. Molycorp has almost tripled since its first day of trading July 29.

Molycorp plans to restart a California mine in the second half of 2011 and produce about 20,000 metric tons of rare earth oxides by the end of 2012, it said in October. The Mountain Pass mine met almost all the world’s rare-earth metals demand before closing eight years ago.

“The availability of a number of these materials is at risk due to their location, vulnerability to supply disruptions and lack of suitable substitutes,” according to the report.

Training Engineers

The U.S. needs to promote training of engineers and scientists on rare earths and their use, Sandalow said. Rare earths are “broadly distributed” worldwide, he said.

While thousands of scientists and engineers are studying rare earths in China, only dozens are doing so in the U.S., he said.

“We need to develop the human capital here to promote these technologies in the decades ahead,” Sandalow said.

China holds about 36 percent of the world’s rare-earth element reserves, according to the report. China’s commerce ministry and other agencies are still working to decide rare- earth export quotas for 2011, Yao Jian, a ministry spokesman, said at a regular briefing held in Beijing today.

“We expect 2011 export quotas to be similar or slightly lower, compared with this year,” Peng Bo, an analyst at Guosen Securities Co., said in a telephone interview from Shenzhen.

Rare-earth exports from China declined 77 percent in October from a month earlier, according to the General Administration of Customs on Nov. 23.

China Production

The U.S. began producing rare-earth elements in the mid-1960’s in Mountain Pass, California, and dominated global output until 1984, according to the report. Low production costs helped China become the world’s top producer in 1996. The four main high-yield rare-earth-element-bearing minerals are bastnaesite, monazite, xenotime and ion adsorption clays.

China introduced export quotas on rare-earth elements in 1999, according to the report. From 2005 to 2009, exports fell by more than 20 percent to about 50,000 tons. In July, China imposed the tightest quota yet, leading to a 40 percent annual drop in exports.

“Production within the United States is vitally important,” according to the report. “Options to simplify permitting may include improved coordination between state and federal agencies as well as among federal agencies during all stages of permitting.”