The U.S. is sitting on a rare earth stockpile. Can it help against growing tech demand and a looming shortage?

Hybrid cars, wind turbines, computers, MRI machines and mobile phones all contain materials called rare earth minerals that mostly come from China.

But according to a new U.S. Geological Survey report, the United States is sitting on large, mostly untapped reserves that could serve as a hedge against a looming shortage.

The U.S. reserves include deposits of both "light" and "heavy" rare earths, found in such products as television displays and magnets in hybrid electric motors.

The reserves could give the U.S. a leg up in future tech innovation.

A company named U.S. Rare Earths holds the only known American deposit of heavy rare earths, according to the report.

That fact will become increasingly important because a rare earth shortage is expected in the next decade. China has indicated it may stop exporting rare earths within the next five to 10 years due to its own internal demand.

The company found its first rare earth deposit about 15 years ago in an area called Lehmi Pass on the border between Idaho and Montana. At the time, it was seeking thorium, an alternative nuclear fuel.

But in the years since, rare earths became used in all sorts of consumer electronics -- and the company realized the potential of what it owned.

(It owns another deposit in Diamond Creek, Idaho.)

According to USGS estimates, the U.S. holds rare earth ore reserves of up to 13 million metric tons. To compare, the entire world produced only 124,000 metric tons in 2009.

The company seeks to attract enough funding over the next six months to do some exploratory drilling at its deposits.

The problem: the U.S. isn't really equipped to process rare earths the way China is.

U.S. Rare Earths isn't the only company in the mix. Molycorp Minerals has begun processing light rare earths from a mine in Mountain Pass, California, but must ship material to China for processing in specialized plants that could cost up to $1 billion to build in the U.S. -- and take eight years to materialize.

Moreover, a worldwide race has begun for lithium -- the element used for both psychiatric treatment and in the batteries of hybrid electric cars.

Canadian car parts company Magna International, which is working on an electric Ford Focus, has announced that it is investing $10 million in a small Canadian lithium firm with projects in Argentina. And Toyota Tsusho, a material supplier for its namesake automaker, has joined with Australian miner Orocobre to also develop a $100 million lithium project in Argentina.

Lithium can be found in Bolivia, Serbia, Chile, Argentina, China, Finland, Mexico, Canada and the U.S. state of Nevada. Bolivia has almost half of the world's reserves.

This post was originally published on Smartplanet.com