An unheralded agreement reached Monday between Boeing and a small Salt Lake City company could pay big dividends for Idaho’s economy. 

    The agreement between The Boeing Company and U.S. Rare Earths Inc. was reached because of large deposits of rare earth metals known to exist in the Diamond Creek and Lemhi Pass areas near Salmon.

    The materials are critical elements in many high-tech products, including emerging green energy applications. A looming world shortage of the rare earth metals means Idaho could play a critical role in the future manufacture of these products.

    Boeing will use a new sophisticated remote sensing technology to help the privately owned USRE identify and confirm the rare earth deposits it owns rights to in Idaho, as well as other areas in Montana and Colorado.

    If things pan out, USRE officials told the Journal Tuesday, it could lead to mining and refining industries in Idaho, as well as manufacturing facilities.

    The deposits of rare earth materials near Diamond Creek and Lemhi Pass have been confirmed by the U.S. Geological Survey.

    “If, based on the USGS record, what we believe is there is there ... it could mean a lot of jobs and a lot of commerce for Idaho,” said USRE Chief Executive Officer Edward Cowle.

    “It’s going to be huge for Idaho,” said local businessman Terry Andersen, who has been supporting USRE in its effort to create a rare earths industry in Idaho.

    Andersen, who manages the Collegiate Inn in Pocatello and is running for a state senate seat, said the impact could be felt directly in Pocatello, though he said it was premature to elaborate on that possibility.

    “This is really big for Idaho and will put us in the limelight for years to come,” he said. 

    A Boeing spokesman confirmed the company has contracted with USRE. Officials from both companies were on site in Idaho Monday and will be in the state through Friday.

    If Lemhi Pass and Diamond Creek turn out to have a great volume of rare earth materials and mining and refining operations go forward, the closest place to do the manufacturing is Idaho and Montana, noted USRE public relations spokesman Patrick Kennedy.

    “Those states could benefit greatly from having new ... mining and manufacturing operations, which require a lot of jobs,” he said. “It could be a real boon to Idaho.”

    Rare earth materials include 17 elements on the periodic table of elements ranging from terbium and lutetium to lanthanum and gadolinium.

    Rare earth metals are known to exist in significant reserves in only a few places on earth, including China, North America and Australia.

    Rare earth metals are used in a wide variety of products, including emerging green energy technologies such as hybrid cars, solar cells and wind turbines, high-tech products such as cell phones, computers, new TVs, MP3s and PDAs, and military applications such as tank sights, lasers, missile-guidance systems and aircraft electronics.

    China is the OPEC of rare earth metals and produces 97 percent of the world’s supply of these materials. The country announced in early July that it would reduce exports of those products by 72 percent during the second half of 2010.

    Many experts on the issue, including the U.S. Magnetic Materials Association, are sounding the alarm about a looming crisis that could result in shortages of rare earth materials needed to support domestic manufacturing in support of the products that use rare earth elements.

    Unless the U.S. develops a viable rare earth metals industry, industry experts say, this country could lose its chance to be a leader in clean energy technology because those jobs will move to China where the needed rare earth metals are.

    A Congressional Research Service report that outlines the seriousness of a potential supply crisis identifies USRE as one of two U.S. companies with “long-term potential because of its large deposits in Idaho, Colorado and Montana.”

    The report noted the federal government may take action to offset the cost of establishing a domestic rare earth metals industry and ensure it is competitive with other regions of the world.

    The USGS recognizes U.S. Rare Earth’s deposits as among a select group of economically viable deposits outside of Chinese control.

    Edwards said Boeing’s technology will greatly enhance his company’s exploration capabilities and provide a competitive advantage for the discovery of new deposits.

    Once the extent of the deposits is verified, USRE can proceed with the necessary steps that could lead to eventual mining and refining of the metals. 

    Cowle cautioned that the process won’t be immediate. “This type of thing doesn’t happen overnight,” he said. “It’s going to take a few years.”

    But if and when it does happen, “A lot of the manufacturing could spring up there in Idaho,” Kennedy said. “You have a real potential.”