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Rare Earths Supply at Risk Due to Growing Shift to Green Energy
Rare Earth Elements
Any global effort to save and prolong the life of Mother Earth, such as investing into and inventing technologies that use clean fuel and green energy are most welcome. But with the world still yet to determine a suitable, dependable and reliable source of rare earths outside of China, these efforts could prove detrimental to the rare earths supply chain.
Production of two rare earths metals, dysprosium and neodymium, critical components used to aid technologies in manufacturing wind turbines to generate electricity and make electric vehicles, have been found to have increased by only a few percentage points per year, according to www.clickgreen.org.uk. Versus projected global demand seen to grow by 700 per cent for neodymium and 2,600 per cent for dysprosium over the next 25 years, it is believed the supply of the precious metal could not keep up given that the two metals are most especially available almost exclusively in China.
Citing a publication in the ACS journal Environmental Science & Technology authored by Dr Randolph E. Kirchain, inventions of green technologies would definitely carry out a proposed stabilisation in atmospheric levels of carbon dioxide, the main greenhouse gas, at 450 parts per million.
However, to meet the objectives of these green technologies would mean a parallel growth in the supply of rare earths.
“To meet that need, production of dysprosium would have to grow each year at nearly twice the historic growth rate for rare earth supplies,” Mr Kirchain said.
“Although the rare earths supply base has demonstrated an impressive ability to expand over recent history, even the rare earths industry may struggle to keep up with that pace of demand growth,” the author said.
In order to keep up, shortfalls in future supply could be mitigated “through materials substitution, improved efficiency, and the increased reuse, recycling, and use of scrap.”
Rare earth metals are essential for clean energy technologies, such as PVs; hybrid and electric vehicles; high-efficiency wind turbines; smart grid technologies; compact fluorescent lights; fiber optics; lasers and hard disk drives, defense guidance and control systems; global positioning systems; and advanced industrial, military and outdoor recreation water treatment technology.
Rare earth metals are not really rare. It is the mining procedure and operations that make them rare. Unfortunately, majority of the world’s rare earth metals, about 97 per cent, are mined in China, which have considerably slashed export quotas in 2010 and 2011 for domestic consumption and manufacturing purposes.
These “economically important metals are at risk of supply disruption due to human factors such as geopolitics, resource nationalism, along with events such as strikes and accidents,” www.energytrend.com said, citing a report by the British Geological Survey.
In December 2011, the U.S. Department of Energy (DOE), in its 2011 Critical Materials Strategy, said “many clean energy technologies depend on raw materials with potential supply risks” as it assessed the 16 elements considered most critical.
Dysprosium, neodymium, terbium, europium and yttrium were included in the short-term critical supply list. On the medium term were lithium and tellurium.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
By: Esther Tanquintic-Misa
Source: http://community.nasdaq.com/News/2012-03/rare-earths-supply-at-risk-due-to-growing-shift-to-green-energy.aspx?storyid=125795
Obama’s Rare-Earths Case With WTO Won’t Ensure Security: View
Photograph by Doug Kanter/Bloomberg
The Cold War had Americans worried about a “missile gap.” Should the rise of China have us nervous about a neodymium gap?
It’s a question President Barack Obama is taking seriously, as he showed Tuesday in asking the World Trade Organization to look into China’s manipulation of the global market in so-called rare-earth elements. We wish the U.S. Defense Department would show an equal amount of concern.
Neodymium is one of 17 rare-earth metals that have become vital to industrial production and national security in our high-tech age. Its unique magnetic properties are integral to computer hard drives, hybrid-car motors, aircraft turbines and those Beats by Dr. Dre headphones your teenager apparently can’t live without.
One thing neodymium isn’t is rare — it is as commonplace in the earth’s crust as prosaic metals like copper, and scattered around the globe. Much the same can be said of praseodymium (used in Hollywood’s arc lights), samarium (guided missiles) and lanthanum (night-vision goggles). Yet, despite this abundance, China produces more than 90 percent of the global supply of rare earths.
Mining Isn’t Easy
There are many reasons for this: The ore is usually found in small quantities that aren’t cost-effective to mine and refine. Because it is often in seams of thorium and other radioactive or harmful substances, extraction can create an environmental disaster. Opening a new mine in the U.S. can cost upward of $1 billion, and can take as long as 15 years before it becomes operational. These difficulties give an advantage to China, with its vast rare-earth deposits in Inner Mongolia and elsewhere, state-financed mining operations, and lax environmental and worker protections.
It’s never good to have a single supplier develop a market stranglehold, and the problem is compounded in this case because China is a commercial and military rival with no qualms about pressing every advantage. It places quotas on exports and sets prices for rare earths far lower for the domestic market — a ploy to get Western manufacturers to move factories inside China. According to a study by Bloomberg Government, the average Chinese export price of neodymium oxide was $321 per kilogram in the summer of 2011, 66 percent higher than the domestic price and a 563 percent increase compared with the same period in 2010.
The stakes go beyond commerce: In 2010, after Japan detained a Chinese fishing captain near some disputed offshore islands, Beijing played some power diplomacy by placing an embargo on rare-earth exports to its island neighbor.
In response, Japan has been shaping a national strategy on rare earths, centered on increasing stockpiles, recycling from discarded electronics and finding new sources (its scientists believe they may have found large deposits under the ocean). Yet the jury is out on Japan’s approach, and such steps may not lend themselves to the U.S.’s military-industrial structure. Congress is rightly leery of intervening in the market through creation of a large-scale defense stockpile, and most electronic devices contain too little rare-earth metal to make recycling financially worthwhile.
On new sources, however, things are looking up. Molycorp (MCP) of Greenwood Village, Colorado, has recently reopened its Mountain Pass mine in California’s Mojave Desert, which is particularly rich in so-called light rare earths such as lanthanum, cerium, praseodymium and neodymium. Mountain Pass was shut down more than a decade ago because of radioactive discharge. This time around, however, Molycorp seems to be saying and doing all the right things environmentally, and plans to be at full production later this year.
A Market Success
Congress had considered providing loan guarantees for Molycorp’s efforts to reopen Mountain Pass. In the end, the market worked just fine. The company raised nearly $400 million in an initial public offering last July and this month reached a $1.3 billion deal to purchase Canada’s Neo Material Technologies Inc. (NEM), a major refiner of rare earths. (Although this is mostly good news, Neo Material has two plants in China, raising the troubling possibility that ore from Mountain Pass could be exported there.) Meanwhile, the other major Western company in the field, Lynas Corp. of Australia, is running into local opposition in efforts to build a refinery in Malaysia.
Still, given the importance of rare earths to the U.S. economy and national defense, the government has a role to play in the success of Molycorp and its smaller domestic rivals.
The complaint to the WTO is justified, but is hardly certain to succeed. This is a tougher issue than a 2009 case on broader raw materials that China lost, as Beijing will probably cite concerns over the environmental impact of rare-earth mining as reason for restricting exports.
Better to concentrate on increasing non-Chinese supplies. Representative Mike Coffman, a Republican who represents the Colorado district where Molycorp is based, has been pressing the Pentagon for years for a report on its rare-earths strategy. Defense officials, who have blithely dismissed the idea of a rare-earth security threat in the past, are expected to give Congress a classified briefing on the issue this month.
At the very minimum, the Pentagon needs to have its Defense Logistics Agency conduct an inventory of rare earths on hand and its potential needs over the next five years, and develop a plan should Beijing officials jack up prices or turn off the supply. It could also look at long-term purchasing contracts with Molycorp, smaller U.S. companies and even foreign, non-Chinese firms like Lynas to assure diversity of supply. These minerals could eventually be sold off to military contractors and other manufacturers.
Thirty years ago, Deng Xiaoping presciently said: “There is oil in the Middle East, there is rare earth in China.” The U.S. has seen the ill-effects of dependence on Middle Eastern petroleum. We have a chance to avoid a similar fate with neodymium.
Source: http://www.bloomberg.com/news/2012-03-13/obama-s-rare-earths-complaint-before-wto-won-t-ensure-u-s-security-view.html
China to develop rare-earth based new materials
Rare Earth Elements
BEIJING – China will develop rare-earth-based new materials during the 2011-2015 period, in an effort to boost manufacturing capacity, according to a five-year plan for the new materials industry released on Wednesday.
The government will “make full use of its rare earth resources to expand the industrial scale of new materials made with rare earth,” said the publication by the Ministry of Industry and Information Technology.
The government will focus on developing rare earth functional materials, increasing efforts to improve performances of new materials made with rare earth, promote its application in high-end manufacturing, and increase product added-value, the plan said.
Rare earth metals are a group of 17 elements that are widely used in high-tech products, including flat-screen televisions, lasers and hybrid cars.
The plan aims to promote the application rate of production technologies for rare earth functional materials to 70 percent in the country’s high-tech industries by 2015, it said.
It also set goals to increase the output capacity for rare earth permanent magnet materials by 20,000 tonnes a year and that of rare earth hydrogen-containing alloy powder by 15,000 tonnes a year.
Rare earth permanent magnet materials, which have rare earth elements in their composition, are widely used in electrical motors, medical treatment and spaceflight, while hydrogen-containing alloy powder is used in high-performance batteries.
The plan also sets higher output goals for a range of other new materials that contain rare earth metals.
Production bases for rare earth functional materials will be mainly built in Beijing, Baotou city in Inner Mongolia autonomous region, Ganzhou city in Jiangxi province, Liangshan and Leshan in Sichuan province, Longyan in Fujian province and Ningbo in Zhejiang province, the plan said.
While pledging policy supports to accomplish the goals, the plan also stresses efforts to protect energy resources and promote integrated utilization by developing reproducible resource technologies.
China’s rare earth sales account for nearly 90 percent of the global total, but its reserves only account for one-third of the world’s total. Decades of excessive exploitation has resulted in serious environmental damage.
To promote healthy development of the industry, China has suspended the issuance of new licenses for prospecting and mining and adopted production caps, export quotas and stringent environmental standards, while launching crackdowns on illegal mining activities.
China sets the 2012 rare earth export quota at basically the same level of 2011. Its rare earth exports totaled 14,750 tonnes during the first 11 months of 2011, accounting for only 49 percent of the total quota.
The plan, which maps out development of the nation’s new material industry, prioritizes the development of six types of advanced materials, including special metal functional materials, high-end metal structural materials, advanced macromolecular materials, new inorganic non-metal materials, high performance composite materials and frontier new materials.
The plan targets a 2-trillion-yuan output in the country’s new material industry by 2015. The industry’s output value stood at 650 billion yuan in 2010, growing by an annual rate of 20 percent since 2005.
Source: http://www.chinadaily.com.cn/usa/business/2012-02/23/content_14677240.htm
Obama’s Budget: Dollars for Manufacturing Education, Rare Earths Research
Continuing with our look at President Obama’s budget proposal, a few Mineweb articles this week point out a few important line items regarding mining. But first, a look at something MetalMiner has spent some time reporting on: educating — and hiring — the next generation of American manufacturing workers.
Education in Trades
Obama is evidently continuing his push to get young workers interested in making the US competitive in terms of manufacturing, as he had been with his Skills for America’s Future initiative.
“As part of his short-term stimulus efforts, Obama today announced an $8 billion Community College to Career Fund proposal that would link businesses and community colleges to train as many as 2 million workers for jobs in high-growth, high demand industries,” Bloomberg reported yesterday. This is on top of the $2 billion in competitive funds Obama pledged in 2010 to community colleges over four years, according to a November 2010 White House press release.
The departments of Education and Labor would tag-team this effort, the canopy of which includes health care, advanced manufacturing, transportation, clean energy and information technology, according to an official statement as reported by Bloomberg.
The question becomes, with more than $10 billion sunken into this endeavor, what will the ROI be? And at what rates are companies hiring these types of grads for worthwhile positions?
There are signs that, to some degree, the plan is working. One good example is in San Diego, where Solar Turbines accepts (and has been for 30 years) apprentices who work at the company while getting certification at San Diego City College, according to a KPBS article. Also, Southwestern Community College partners with Puget Sound Naval Shipyard and Intermediate Maintenance Facility to train shipyard workers.
However, state budget cuts may prove a roadblock to Obama’s hopes down the line: California cut funding for apprenticeship programs at community colleges two years ago by 51 percent, according to KPBS.
Mining Safety, Mining Royalties and Rare Earths Research
Back to how the budget proposes to affect domestic metals and mining directly. A Mineweb article claims, “approvals of mine ventilation and roof plans face more delays” in the proposed 2013 Mine Safety and Health Administration (MSHA) budget, which is proposed to be cut by $1 million from last year.
Granted, most of this proposal deals with coal mines and coal-mine safety, but at least some jobs in the mining sector will be retained: the article states that the “budget maintains the 597 fulltime positions currently in the metal and nonmetal mine safety and health division,” and “requests an increase of $1,834,000 to fully fund enforcement staff positions.”
A separate Mineweb article details Obama’s “calls for a 5% gross mining royalty on federal lands, and a hardrock abandoned mined land fee on all private and public lands.” Obama proposed the same last year, only to be shot down by Congress. The administration says the royalties will yield $74.5 million in revenue over the next decade, and “would be instituted under a leasing program under the Mineral Leasing Act of 1920 for certain hardrock minerals, such as silver, gold and copper.”
Lastly, the proposed budget for the United States Geological Survey (USGS) has been upped $34.5 million from last year, including an increase of $1 million to support research on rare earth elements.
By: Taras Berezowsky
Source: http://agmetalminer.com/2012/02/15/obamas-budget-dollars-manufacturing-education-rare-earths-research/
WTO: China rare earth trade defies rules
In a picture taken on September 5, 2010 a man driving a front loader shifts soil containing rare earth minerals to be loaded at a port in Lianyungang, east China's Jiangsu province, for export.
(Financial Times) – The EU has demanded that China loosen its policy on sales of rare earth materials after the World Trade Organisation upheld a ruling that Beijing’s policies to limit raw material exports violated international trade rules.
The case, brought in 2009 by the EU, US and Mexico, touches on one of the biggest sources of tension in the world trading system: the use of export restrictions to hoard raw materials for the use of domestic manufacturers.
The WTO’s appellate body issued its decision on Monday, endorsing a previous finding that export duties, quotas and other policies enacted by Beijing to limit the foreign sale of nine raw materials were not justified on environmental or self-sufficiency grounds.
The EU, US and Mexico argued that the higher prices their manufacturers were forced to pay for goods such as bauxite, coke and zinc put them at a disadvantage across a wide swath of industries — from steel to batteries, chemicals and ceramics.
The case highlights the global scramble to secure supplies of raw materials after huge swings in commodity prices over the past few years. It also represents an example of the US and the EU joining forces to confront China on trade matters — a strategy that both Washington and Brussels believe will help maintain leverage over the world’s second-largest economy.
The WTO case has acquired even greater importance amid Beijing’s moves to impose similar restrictions on the export of a rare earths, a category of 17 elements that are found in an array of high-tech products, including solar panels, wind turbines and mobile phones. Such goods are themselves becoming an increasingly important battleground for trade conflicts, with the US having launched a wide-ranging investigation against China’s support for its renewable energy industry. Solar power companies in America have recently sought emergency anti-subsidy tariffs against imports of Chinese solar cells.
China accounts for more than 90 per cent of global production of rare earth materials. That dominance has unnerved its trading partners — particularly since Beijing has moved repeatedly over the past four years to tighten its supplies.
The EU and the US have so far refrained from filing WTO complaints against China over rare earths, hoping that their victory in the raw materials case would convince Beijing to revise its policies.
In a statement issued shortly after the ruling, Karel De Gucht, the EU trade commissioner, urged China to take action.
“China now must comply by removing these export restrictions swiftly and furthermore, I expect China to bring its overall export regime — including for rare earths — in line with WTO rules,” Mr De Gucht said.
Ron Kirk, the US trade representative, called the ruling “a tremendous victory” that “ensures that core manufacturing industries in this country can get the materials they need to produce and compete on a level playing field”.
The Chinese mission in Geneva said expressed regret over the ruling but said that Beijing would respect the decision.
China agreed to cut export quotas and taxes when it joined the WTO in 2001.
The issue has been particularly sensitive for the EU because its manufacturers are so reliant on imported raw materials for production.
The commission estimated that the bloc’s annual imports of the materials cited in the case, which also include fluorspar, magnesium, manganese, silicon carbide, silicon metal and yellow phosphorous, exceeded €1bn.
In order to obtain such materials at competitive prices, European companies have been forced to relocate manufacturing operations to China, the commission said.
By: Joshua Chaffin and Alan Beattie
Source: http://www.ft.com
Rare Earths and Strategic Metals: A Lateral Look at 2011
Rare Earth Elements
Nationalism, the search for substitutes and deals to address short supplies consumed the spotlight in 2011 for rare earth elements.
In addition to the skyrocketing of rare earth elements’ prices (and their subsequent fall to Earth), and constant speculation as to which junior rare earth exploration companies are going to survive, the calendars of both the rare earths and strategic metals have been quite full in 2011.
While some of the events filling their calendars have received often considerable coverage in the press, others have not drawn so much attention. As 2011 has come to a close, it is perhaps worth looking to see if any themes have emerged.
I have singled out three themes, not all of which have received the spotlight, but that I consider to be of interest as well as importance:
- Resource nationalism
- The search for substitutes
- Deals to address dearth
Resource Nationalism
If nothing else, the intense interest in rare earths over the past several years has coincided with countries focusing on several issues, e.g., their own access to strategic minerals (and not just rare earths) and the value of the mineral resources they already own.
With the example of China aside, the focus on these has coincided with proposed and actual government policy developments among various mining nations, in the areas of resource protection as well as the further realization and “distribution” of the value of those resources.
Back in November, the lower house of the Australian parliament approved the new Mineral Resource Rent Tax (MRRT). Aimed at further tapping the earnings of the country’s resources sector, the tax currently targets only coal and iron ore. However, only time will tell if the targets remain solely those resources.
On the other hand, events in two African countries have not received as much press. In South Africa, the future of the country’s natural resources sector (and the fate of its mining companies) is soon to be squarely in the limelight. On Jan. 30, the ANC’s national executive committee will consider just how, and how much, the state should be involved in the sector.
While what the Australians are doing appears to be attractive to some, of the 13 different country models that have been studied, it seems that Chile’s mixed private/public example in the mining sector is a favorite. On the other hand, nationalization cannot yet be fully ruled out.
For example, in Namibia, at the end of March, again in a move to try to ensure that its people share in its natural resource wealth, the country’s cabinet backed a proposal that only the state-owned mining company — Epangelo — should be issued mineral exploration and mining permits.
Unfortunately, the government’s announcement was not accompanied by an explanation as to how those foreign mining companies already on the ground were to be treated, leading to significant consternation and confusion among such companies and prospective investors in the mining sector in Namibia.
Then, in the middle of May, the country’s minister for mines and energy minister, Isak Katali, announced that the government was seeking to introduce a minerals-windfall tax. This was followed in July by the announcement of proposed Draconian taxes on the mining sector by the country’s finance minister, Saara Kuugongelwa-Amadhila. However, so adverse was the fallout of the announcement, especially amongst investors, that on Aug. 17, the government was forced to back-pedal, with Calle Schlettwein, the deputy finance minister, announcing a scaled-down tax plan, not least in an effort to allay investors’ fears.
These are just two examples among many. In its report, Business Risks Facing Mining & Metals 2011-2012, published in August 2011, Ernst & Young reported that, over the prior 12-18 months, at least 25 countries had announced their “intentions to increase their government take of the mining industry’s profits via taxes or royalties.”
The Search For Substitutes
The search for substitutes, both for members of the rare earths elements (REE) clan and other strategic metals, continued apace this year. And it was particularly busy vis-a-vis REEs. The search, however, has not just been for effective substitutes, or reduced usage, within certain applications, but also for substitute technologies that may not necessarily include the metal(s) at all.
In the area of catalysts for oil refining, W.R. Grace & Co. started to sell equally efficient catalysts, but containing considerably less lanthanum than before. The German firm Cofermin Chemicals GmbH & Co. KG of Essen developed its product Coferpol UG, a substitute for cerium oxide used in the polishing of glass.
In the world of permanent magnet electric motors, the likes of Toyota Motor Corp. General Motors and GE are looking at using magnets with less REE content than before, or just smaller magnets. And some companies are even exploring the use of ferrite magnets as suitable substitutes.
What has also become apparent is that, in certain instances, the use of REEs has been perhaps somewhat profligate, so much so that their use now, in reduced volumes, has not made a significant difference in performance.
Earlier in 2011, as part of its policy of encouraging (and funding) renewable energy projects, the Advanced Research Projects Agency – Energy (ARPA-E), made up to $30 million available for its REACT (Rare Earth Alternatives in Critical Technologies) project that will look at either reducing or eliminating, through the development of substitutes, a dependence on rare earth materials in both wind generators and electric vehicle motors.
In terms of substitute technologies, perhaps the most ironic has been the espousal, not least by the likes of Toyota and General Motors, of the induction motor, which does not use any rare earths metals. Such a motor is already used in the Tesla Roadster and BMW’s Mini-E.
The A/C induction motor has been around for a long time, having been patented back in 1888 by the American inventor and, some would say, eccentric Nikola Tesla. In addition to being both durable and simple, such motors have the considerable added advantage of being able to operate efficiently over a wide range of temperatures. They also comport themselves very respectably on the torque front!
Were he around to see what they are being used for now, Tesla would likely be spinning asynchronously in his grave — with amusement!
Away from the realm of REEs, other interesting areas of substitution include the increasing use of gallium nitride, as a more energy-efficient alternative, in the likes of the high-voltages switches associated with the grid. Such switches, and efficient switching, will become especially important as wind and solar energy increasingly needs to be “fed in” to the grid.
ARPA-E is also making some $30 million available for research in this area through its GENI (Green Electricity Network Integration) project and, in Europe, in November, the Ferdinand-Braun-Institute in Berlin announced the launch of the EU project HiPoSwitch, which will receive significant funding from the European community and will focus on “novel gallium nitride-based transistors” as “key switching devices” in power conversion and high-voltage environments.
Finally, also on the substitute technologies front, around the middle of November, a few quite interesting news items mentioned the use of that staple in steel production, vanadium, in a different context — electric batteries. While such batteries have been around since at least the ’80s, the technology has not yet been developed commercially with any degree of success.
With the advent of and interest in electric vehicles, this may all change. There’s still a long way to go, but vanadium batteries do offer some interesting (and, potentially, very important) advantages, not least their longevity (decades) and the fact they can be charged in a jiffy.
Deals To Address Dearth
This past year saw a number of deals, including strategic alliances, out of which various countries have secured much needed supplies of critical minerals. Among those that have either been consummated, or are still in the works, the following, going forward, will be worth remembering:
- Three Chinese companies — Taiyuan Iron and Steel (Group) Co. Ltd., CITIC Group and Baoshan Iron and Steel Group (Baosteel) — purchased 15 percent of CBMM of Brazil, the world’s largest supplier of niobium. (China is the world’s largest consumer of niobium.)
- Continuing negotiations between Namibia’s Epangelo and China’s CGNPC Uranium Resources Co. over a strategic ownership stake in the Husab uranium project.
- Japan’s agreements with both India (end-October) and Vietnam (Nov. 1) to help each develop its rare earth deposits, with Japan, thereby seeking to secure supplies for itself.
- The agreement reached in early October by Germany with Mongolia (a first such deal for the Germany government), to secure REEs at a fair price for Germany.
- The signature by Kazakhstan’s Kazatomprom of a rare earths joint venture agreement with Toshiba (end-September). (The state-owned company had already signed one with Sumitomo back in March 2010.)
On the other hand, one deal to have fallen significantly apart this year was between China and Zimbabwe over chrome. Unfortunately for Zimbabwe, it failed to beat China at its own game, the “value added” game.
Hoping to add value by having a group of seven Chinese chrome mining companies set up a smelter in the country, and despite two reprieves, the Chinese never came up with the smelter. They just continued to export the raw material before the government imposed a ban on chrome exports in April. Hauled up in front of the Parliamentary Portfolio Committee on Mines and Energy at the end of September, it appears that representatives of the companies had the temerity to request “a grace period of five more years to mobilize resources to establish the plant through exporting the mineral.” Quite understandably, “Their request caused an uproar among members of the committee, who felt that if they were allowed to export, the chrome resources would be finished in five years before any plant was set up.”
Finally, at a corporate level, two particular deals caught my eye.
The first was the closing, on May 26, of the deal in which the Canadian company Stans Energy Corp. acquired 100 percent ownership of the Kyrgyz Chemical Metallurgical Plant (KCMP) Rare Earth Processing Complex and Private Rail Terminal. For some three decades, the plant, in Stans’ words “produced 80 percent of the former Soviet Union’s RE products.” Since May, the company has continued further to consolidate its position in Kyrgyzstan.
The second deal, about which not much was seen in the press, was the announcement of the formation in June of a 50/50 joint venture between France’s ERAMET (with a market cap at the time of around €5.8 billion and currently employing around 15,000 people in 20 countries) and Australia’s Mineral Deposits (with a market cap of considerably less and employing just 90 at the end of June) to “combine Mineral Deposit’s 90 percent interest in the Grande Cote Mineral Sands Project (“Grande Cote”) [in Senegal] and Eramet’s Tyssedal titanium slag and iron plant in Norway.” The deal was finally closed on Oct. 25.
Afterword
If nothing else, during 2011 there has developed, albeit slowly, a realization that REEs alone are not the name of the game. And that countries and corporations alike need to look across the spectrum of the materials — particularly minerals — they use to determine which are critical, which are not and how to secure the relevant supply chains.
While some larger concerns — for example GE — have been doing this for some time now, as a continuing and constantly evolving process, it is something that all organizations using REEs and/or other strategic metals need to undertake. It is perhaps salutary that even now, the U.S. Department of Defense has, as far as I am aware, yet to report on REE use in its weapon and technology systems, although they were asked to do so some time ago.
Henceforth, there will be no plausible excuse of “We didn’t realize how important they were!”
By: Ton Vulcan
Source: http://www.hardassetsinvestor.com/features/3339-rare-earths-and-strategic-metals-a-lateral-look-at-2011.html
Rare earth crisis: Innovate, or be crushed by China
Niobium Crystals
Laptops, cars, smartphones, TVs, MRI scanners, LCD displays, light bulbs, optical networks, jet engines, cameras, headphones, nuclear reactors. It might seem like a random selection of high-tech gizmos, but every single object on that list has one very important thing in common: Their manufacture requires one or more rare earth metals.
Rare earths — a block of seventeen elements in the middle of the Periodic Table — aren’t actually all that rare, but they tend to be very hard to obtain commercially. Generally, rare earth elements are only found in minute quantities in mineral deposits of clay, sand, and rock (earths!), which must then be processed to extract the rare metals — an expensive process, and also costly for the environment as billions of tons of ore must be mined and refined to yield just a few tons of usable rare earths.
Many rare earths are also geochemically rare — they can only be mined in a handful of countries. This is simply down to Mother Nature being a tempestuous so-and-so: Some countries have deposits of rare earths, and some don’t. This results in massively skewed production (China famously produces 97% of the world’s rare earth metals), and, as you can imagine, a lot of national security and geopolitical troubles, too.
It doesn’t stop with rare earths, either: Many other important elements, such as platinum, are only available from one or two mines in the entire world. If South Africa sustained a huge earthquake — or was on the receiving end of a thermonuclear bomb, perhaps — the world’s supply of platinum would literally dry up over night. The continued existence of technologies that rely on platinum, like car exhaust catalytic converters and fuel cells, would be unlikely.
If geochemistry and politics weren’t enough, though, we even have to factor in ethical concerns: Just like blood/conflict diamonds — diamonds that originate from war-torn African nations, where forced labor is used and the proceeds go towards buying more weapons for the warlord — some rare metals could be considered “blood metals.” Tantalum, an element that’s used to make the capacitors found in almost every modern computer, is extracted from coltan — and the world’s second largest producer of coltan is the Democratic Republic of the Congo, the home of the bloodiest wars since World War II. Not only do the proceeds from coltan exports get spent on weapons, but the main focus of the wars were the stretches of land rich in diamonds and coltan.
Also along the same humanist vein, it’s important to note that extracting these rare elements is usually a very expensive and disruptive activity. Indium, probably the single most important element for the manufacture of LCDs and touchscreens, is recovered in minute quantities as a byproduct of zinc extraction. You can’t just set up an indium plant; you have to produce zinc in huge quantities, find buyers and arrange transport for that zinc, and then go to town on producing indium. In short, extracting rare elements is generally a very intensive task that is likely to disrupt or destroy existing settlements and businesses.
The rare earth apocalypse
The doomsday event that everyone is praying will never come to pass, but which every Western nation is currently planning for, is the eventual cut-off of Chinese rare earth exports. Last year, 97% of the world’s rare earth metals were produced in China — but over the last few years, the Chinese government has been shutting down mines, ostensibly to save what resources it has, and also reducing the amount of rare earth that can be exported. Last year, China produced some 130,000 tons of rare earths, but export restrictions meant that only 35,000 tons were sent to other countries. As a result, demand outside China now outstrips supply by some 40,000 tons per year, and — as expected — many countries are now stockpiling the reserves that they have.
Almost every Western country is now digging around in their backyard for rare earth-rich mud and sand, but it’ll probably be too little too late — and anyway, due to geochemistry, there’s no guarantee that explorers and assayers will find what they’re looking for. The price of rare earths are already going up, and so are the non-Chinese-made gadgets and gizmos that use them. Exacerbating the issue yet further, as technology grows more advanced, our reliance on the strange and magical properties of rare earths increases — and China, with the world’s largest workforce and a fire hose of rare earths, is perfectly poised to become the only real producer of solar power photovoltaic cells, computer chips, and more.
In short, China has the world by the short hairs, and when combined with a hotting-up cyber front, it’s not hard to see how this situation might devolve into World War III. The alternate, ecological point of view, is that we’re simply living beyond the planet’s means. Either way, strategic and logistic planning to make the most of scarce metals and minerals is now one of the most important tasks that face governments and corporations. Even if large rare earth deposits are found soon, or we start recycling our gadgets in a big way, the only real solution is to somehow lessen our reliance on a finite resource. Just like oil and energy, this will probably require drastic technological leaps. Instead of reducing the amount of tantalum used in capacitors, or indium in LCD displays, we will probably have to discover completely different ways of storing energy or displaying images. My money’s on graphene.
By Sebastian Anthony
Source: http://www.extremetech.com/extreme/111029-rare-earth-crisis-innovate-or-be-crushed-by-china
2012 Outlook: Uncertainty Continues For Rare Earths Prices, China Still Major Player
Rare Earth Elements
(Kitco News) – After exploding onto the metals scene in 2010 and garnering widespread media and investor attention, rare earths element prices have dropped and have been unstable mainly due to demand tapering off in 2011, leading to uncertainty in 2012.
Low demand during 2011 was caused by high rare earths prices from both heavy and light rare earths metals, which despite their fluttering prices, remain historically high.
Despite unstable prices throughout 2011, there is some expectation that rare earths prices might become more stable in 2012.
“I think that rare earth metals, they tend to be more strategic in nature and supply versus demand remains quite balanced in favor of prices being stronger in 2012,” said Mike Frawley, global head of metals at Newedge Group. “The pace of consumption in mainland China is a critical component of demand, prices.”
The Chinese continue to control most of the rare earths supply but reports show that Chinese exports are extremely low. Information provided by Metal Pages, a news site that focuses on non-ferrous metals, ferro alloys and rare earths, indicated that rare earth elements exports have dropped 65% in 2011 and that China has only exported 11,000 metric tons of rare earths through the first three quarters of the year.
Reports suggested that the Chinese government may change regulations that would get around Chinese producers who have cut their supply while keeping prices high.
Rare earths prices alone are also an issue not only with volatility, but with their general cost.
According to a report focused on rare earth elements performance for the upcoming year from A.L. Waters Capital, the firm highlighted some specific rare earths and their current prices compared to their peak prices.
A heavy rare earth such as dysprosium, which is commonly used in televisions and lasers, reached a market high of $2,800 per kilogram while its current price is $2,000.
Another heavy rare earths type, europrium, which is used in television screens, peaked at $5,900/kg while its current price is $3,900.
Some light rare earths come at a substantially cheaper price, such as neodymium, which is used in magnets, peaked at $410/kg on the market and currently sits at $270. (A complete list of all 17 rare earth metals and their uses can be found at the end of the article.)
While rare earths are expensive to use in producing several products used daily, the drop in demand does not come from an alternate substance that can be as effective for a fraction of the cost.
“Demand has gone down (in 2011) but I also think that they haven’t really been able to replace rare earth metals,” said Arnett Waters, chairman of A.L. Waters Capital. “I think that part of what’s going on is that businesses are spending less money on more expensive stuff. If I have a use for europrium and I can use a quarter of a pound of it and it does ok in the product that I’m making, I’m not going to adopt a new product in this economy. It would cost too much money.”
Also, with current economic crises around the globe, it is expected that demand will not be strong in 2012 given the historical high prices of rare earths.
Waters used strategic military defense equipment as an example.
“In the case of strategic military equipment, defense budgets are declining,” Waters said. “I realize the U.S. may not be cutting stealth bomber production, but I am saying that in many countries that would like to use these rare earth metals for strategic purposes are cutting their defense budgets and they cannot afford it.”
Rare earths metals play a large role in current modern technology, cruise missiles and other weapons systems.
PRODUCING RARE EARTHS METALS OUTSIDE OF CHINA
China holds most of the processing capacity for rare earths metals.
“A lot of the processing capacity is in China and you can’t use Chinese capacity unless you’re actually getting your rare earths from them,” said Waters. “That’s why Lynas Corporation Ltd. (ASX: LYC) and others have been building their plants in Malaysia.”
Lynas currently has a concentration plant under construction at Mount Weld in Western Australia as well as an advanced materials plant in Kuantan, Malaysia. Neither plant has begun production yet.
Molycorp Inc. (NYSE:MCP) has three facilities, two located in the U.S., California and Arizona respectively, as well as one located in Estonia. The company stated earlier in 2011 that production from the three facilities would produce between 4,941 and 5,881 metric tons by the end of 2011. The company expects to raise production to 19,050 metric tons by the end of 2012.
The sentiment to mine and produce rare earths outside of China does not fall squarely on the shoulders of these two companies but it is still believed that bigger companies will gain more control of mines and production compared to smaller mining companies.
“At the end of the day it just means that there’ll be fewer smaller mines and there’s a natural evolutionary process that takes place in all developing parts of the world,” said Frawley. “You’ll have the small miners who will be succeeded by stronger companies. A more efficient process will begin to emerge.”
“That takes a long time and I don’t see it changing the balance of that supply any time soon.”
RARE EARTHS AS AN INVESTMENT OPTION FOR THE GENERAL PUBLIC
The biggest obstacle rare earths metals face as an investment is that although classified under the umbrella of rare earths metals, there are 17 different types and they are separated into two categories.
“Rare earth prices are not listed like precious and base metals prices so it is difficult for the average person to invest in,” said Waters. “It’s a barrier to the growth of the industry.
“As the market is maturing, there is going to be a need for a centralized source of information.”
Although newer in the metals world than precious and base metals, information can always be found.
“They’re small markets in comparison to gold, copper and aluminum in terms of tonnage and consumption tonnages,” Frawley said. “In terms of price transparency of these markets you’ll have to dig a little deeper.”
-List of heavy and light rare earths metals and their uses-
Heavy
Yttrium TV, glass and alloys
Promethium Nuclear batteries
Europium TV screens
Gadolinium Superconductors, magnets
Terbium Lasers, fuel cells and alloys
Dysprosium TVs, lasers
Holmium Lasers
Erbium Lasers, vanadium steel
Thulium X-ray source, ceramics
Yterrbium Infrared lasers, high reactive glass
Lutetium Catalyst, PET scanners
Light
Samarium Magnets, lasers, lighting
Neodymium Magnets
Lanthanum Re-chargeable batteries
Cerium Batteries, catalysts, glass polishing
Praseodymium Magnets, glass colorant
Scandium Aluminum alloy: aerospace
By Alex Létourneau of Kitco News
Source: http://www.forbes.com/sites/kitconews/2011/12/30/2012-outlook-uncertainty-continues-for-rare-earths-prices-china-still-major-player/3/
DOE report finds 5 clean-energy related REEs at risk in short-term
Rare Earth Elements
The substantial capex required for the development of a rare earths mine, compounded by major miners’ lack of interest in mining rare earths, may spell trouble in meeting future demand.
A report issued Thursday by the U.S. Department of Energy has determined supplies of five rare earths metals-dysprosium, terbium, europium, neodymium and yttrium-are at risk in the short term, potentially impacting clean energy technology deployment in the years ahead.
The 2011 Critical Minerals Strategy examined 16 elements for criticality in wind turbines, electric vehicles, photovoltaic cells and fluorescent lighting. Of those 16 elements, eight are rare earth metals valued for their unique magnetic, optical and catalytic properties.
Five rare earth elements used in magnets for wind turbines and electric vehicles or phosphors for energy-efficient lighting were found to be critical in the short term (present-2015).
Between the short term and the medium term (2015-2025), the importance to clean energy and supply risk shift for some materials.
Other elements-cerium, indium, lanthanum and tellurium-were found to be near-critical.
DOE’s strategy to address critical materials challenges rests on three pillars. To manage supply risk, multiple sources of materials are required. “This means taking steps to facilitate extraction, processing and manufacturing here in the United States, as well as encouraging other nations to expedite alternative supplies,” the report said. “In all cases, extraction, separation and processing should be done in an environmentally sound manner.
“Second, substitutes must be developed,” the report cautioned. “Research leading to material and technology substitutes will improve flexibility and help meet the materials needs of the clean energy economy.”
“Third, recycling, reuse and more efficient use could significantly lower world demand for newly extracted materials,” the DOE advised. “Research into recycling processes coupled with well-designed policies will help make recycling economically viable over time.”
The report also contains three in-depth technology analyses with the following conclusions:
· “Rare earth elements play an important role in petroleum refining, but the sector’s vulnerability to rare earth supply disruptions is limited.”
· “Manufacturers of wind power and electric vehicle technologies are pursuing strategies to respond to possible rare earth shortages. Permanent magnets containing neodymium and dysprosium are used in wind turbine generators and electric vehicle motors. Manufacturers of both technologies are current making decisions on future system design, trading off the performance benefits of neodymium and dysprosium against vulnerability to potential supply shortages.”
· “As lighting energy efficiency standards are implemented globally, heavy rare earths used in lightning phosphors may be in short supply. In the United States, two sets of lighting energy efficiency standards coming into effect in 2012 will likely lead to an increase in demand for fluorescent lamps containing phosphors made with europium, terbium and yttrium.”
In their analysis, DOE found R&D plays a central role in developing substitutes for rare earth elements. In the past year, the agency has increased its investment in magnet, motor and generator substitutes.
“The demand for key materials has also been driven largely by government regulation and policy,” the report observed.
“Issues surrounding critical materials touch on the missions of many federal agencies,” said the DOE. Since March 2010, an interagency working group on critical materials and their supply chains convened by the White House Office of Science and Technology Policy has been examining market risks, critical materials in emerging high-growth industries and opportunities for long term-benefit through innovation.
The report also found that, in general, mining and metal processing expertise “has gradually declined in countries of the Organization for Economic Co-operation and Development, although the need to develop and retain such expertise has received increasing attention in recent years.”
While the number of REO-producing firms located outside of China is small, the proliferation of new rare earth companies “could help ease market concentrations in the years ahead,” the DOE observed. However, “one of the most significant requirements in the rare earth supply chain is the amount of capital needed to commence mining and refining operations…”
“The extraction and, in particular, the processing of rare earth ore is extremely capital intensive, ranging from $100 million to $1 billion of capital expenditure depending on the location and production capacity,” the report noted. “Bringing a greenfield mine to production likely costs in excess of $1 billion.”
“The estimated financial investment needed just to prove the resource (e.g., exploration and drilling) can be up to $50 million,” said the DOE. “The up-front cost of production capacity can range from $15,000 to $40,000 per tonne of annual capacity.’
“Unlike other commodities, rare earth mining generally does not appeal to the major global mining firms because it is a relatively small market (about $3 billion in 2010) and is often less predictable and less transparent than other commodity markets,” the report said.
“Additionally, the processing of rare earth elements into high-purity REOs is fundamentally a chemical process that is often highly specialized to meet the needs of particular customers,” the study noted. “It requires unique mineral processing know-how that is not transferrable to other mining operations. These factors reduce the appeal of rare earths production to the major mining companies, leaving the field mostly to junior miners.”
The report observed that smaller mining companies face a number of challenges, including being less well-capitalized than the majors and may find it difficult to raise money from traditional market. Certain macroeconomic conditions, particularly tight credit and volatile equity markets, can contribute to these difficulties.
“Successful public flotations require fairly advanced operations with proven resources, a bankable feasibility study and often customer contracts or off-take agreements in place that ensure some level of revenue,” the agency said. The DOE noted that Molycorp and Lynas Corporation have the largest capitalizations, “reflecting in part their expansion of large established mines.”
By: Dorothy Kosich
Source: http://www.mineweb.com/mineweb/view/mineweb/en/page72102?oid=142195&sn=Detail&pid=102055
Lowman: Reliant on rare earth
- Toyota Prius
Science … tells us that nothing in nature, not even the tiniest particle, can disappear without a trace. Nature does not know extinction. All it knows is transformation … and everything science has taught me … strengthens my belief in the continuity of our spiritual existence after death. Nothing disappears without a trace.
— Werner von Braun
What do Yttrium, Promethium, Europium and Luterium have in common? Although they may sound like a foreign language, these rare earth elements comprise the backbone of new technologies for the 21st century. Seventeen chemical elements, also called rare earths, are appended to the existing periodic table of elements, and their relatively new discoveries have advanced the electronics industry. Yttrium, when alloyed with other elements, forms part of aircraft engines; Promethium is an essential component of long-lived nuclear batteries; Europium powers images in flat-screen televisions; and Luterium detects radiation in PET scanners (positron emission tomography) used for medical research. Many new technologies — hybrid cars, televisions, cellphones, computer hard drives, camera lenses, and self-cleaning ovens — owe their success to rare earth elements.
The Prius alone contains rare earth elements for its LCD screens, electric motor and generator, headlight glass, catalytic converter, UV windows and mirrors; other cars require similar components to provide competitive features for buyers. The magnets under the hood of a Prius are some of the most powerful on the planet. Different from older technologies, they use rare earth elements to charge the battery and turn the wheels.
Without rare earth elements, your iPod earbuds would still be large, old-fashioned and unwieldy headphones.
As the world’s technologies become increasingly dependent on rare earth metals, their reserves become more valuable. Half the world’s rare earth deposits are in China, which mines almost 100 percent of global supply. Because China recognizes its own increasing needs for new technologies, the country recently reduced rare earth element export quotas by almost 40 percent in 2010.
So what will other countries do to remain competitive in the high-technology market? The answer: Train the emerging generation in STEM education — science, technology, engineering and math — to develop new technologies.
In North Carolina, hubs like Research Triangle Park and Raleigh’s new Nature Research Center are ideal incubators for the next generation of scientists and engineers. Researchers are working around the clock to design products that do not require rare earth elements. At Ames Laboratory in Iowa, scientists are trying to create magnets devoid of any rare earth metals. General Electric is applying nanotechnology to wind turbines as part of its clean-energy portfolio. Nanocomposite magnets will reduce the need for two rare earth metals: neodymium and dysprosium, which function to line up the magnetic field in wind turbines or hybrid cars.
Another strategy for minimizing the reliance on China’s rare earth deposits is to locate reserves closer to home. On California’s Mojave Desert, several rare earth mining operations are reopening. Another option involves improved recycling of cellphones and other products that contain rare earth elements.
The most economical solution is to reduce our reliance on rare earth elements altogether. Toyota is scrambling to develop technologies that do not require magnets utilizing rare earth elements in hybrid cars, and the television industry hopes to someday eliminate the need for Europium and Terbium in its screen imagery.
Training the next generation of scientists and engineers to inspire creative solutions is critical; otherwise, iPods, PET scans and plasma televisions may become increasingly limited in their production. After all, where will America be without scandium, a rare earth element alloyed with aluminum in baseball bats?
By: Meg Lowman
Source: http://www.heraldtribune.com/article/20111114/columnist/111119877?tc=ar
Meg Lowman, longtime Florida scientist/educator, is establishing the Nature Research Center at the North Carolina Museum of Natural Sciences, with a mission to engage the public. Her column appears monthly on these pages.
The Age of Rare Earth Metals: Luisa Moreno
Rare Earth Elements
The Critical Metals Report: Luisa, in a recent interview, you called the rare earth space “the modern Bronze Age played in the capital markets.” Could you expand on that?
Luisa Moreno: The Bronze Age was the first period of human civilization in which metal was used. This rare earth period is similar in that investors are learning about new elements and their applications, which are fairly critical for our modern lifestyle. At the same time, investors have the opportunity to create profits in the space. The analogy is an exaggeration, but we are discovering these new elements.
TCMR: You published a report called “Rare Earths Economic War.” Is there really a war in the rare earth space? If so, who’s winning?
LM: There is an economic war over the rare earths, with China on one side and other industrialized nations on the otherJapan, the United States and the E.U. China is probably winning. It has decreased exports in the last few years and increased protection. It has attracted a great deal of the downstream business and it is positioning itself well. At this point, it produces most of the world’s rare earths, and prices are at record highs. Japan and the other countries have been left with few options, and those options are more expensive, such as substitution, recycling and adapting production lines to use less efficient materials.
However, the capital and equity markets have been depressed for various global economic reasons. If the global economy recovers, stocks should go upand hopefully investors will gain from that as well, because rare earths are still needed and we need to develop these projects.
TCMR: You have said that China may gradually phase out rare earth elements (REE) exportation and keep them for itself, to attract businesses and because mining them is a toxic business. So why doesn’t China get behind some REE projects, to get one into production and get the world off its back?
LM: China is concerned with its own demand, and my forecast indicates it will likely become a net importer. But to answer your question, China tried to buy Molycorp Inc.’s (MCP:NYSE) Mountain Pass project as well as the Lynas Corp. (LYC:ASX) project. It wasn’t able to, due to lack of support from local governments. China (and by China, I mean some individual companies and perhaps its government) would like to control most of the REEs and be able to supply the rest of the world, but the rest of the world is not ready to be dependent on the nation for such critical elements.
TCMR: A post on raremetalblog.com talks about China’s growing relationship with Wal-Mart, the world’s biggest retail company, and how it is trying to get Wal-Mart suppliers to be more sustainable. Another post talks about growing demand for LED light bulbs. They are expensive, but they more than pay for themselves in the long run. These items mean a greatly increased demand for REEs so are we underestimating future demand?
LM: We may be. Chinese demand is better defined because China has the REEs and it can produce and consume them internally. It is different, however, in Japan, which has to decide now if it is going to develop and build production lines that are dependent on REEs. If it doesn’t feel comfortable with that, it might decide to use different elements instead of making products using these elements; it might choose to produce hybrid cars with fewer REEs.
At this point, there is great potential for REEs but at the same time, if the supply is uncertain, some industrial nations might come up with a plan B. Assuming the global economy does well, there is great potential usage and demand growth, not just in China, but also in other nations’ energy strategies. So many risks are attached to supply that it is hard to accurately predict what the real demand will be.
TCMR: Does Japan have any leverage with China that can stabilize the flow of rare earths to its manufacturers?
LM: Japan might have some leverage, but not enough to change Chinese policies. You might remember the fishing dispute a few months ago; China stopped exporting to Japan until it felt comfortable the dispute was resolved. You could say Japan has almost no leverageand that is true of the U.S. and EU as well. Japan has been talking to China for a long time, and the World Trade Organization is aware of the struggles, but no one has been able to persuade China to change its policies.
TCMR: China has attempted to curb illegal and small-scale rare earths mining. Are the Japanese sourcing the REEs through these kinds of means now? Do you think Japan will resort to the gray market?
LM: That is not something its government would disclose or announce, but I think Japan is trying to purchase the REEs through other nations and it is possible that Vietnam, Thailand and neighboring countries are buying illegal rare earths. But based on its culture and what I have been told by Japanese traders and businessmen, Japan will avoid buying illegal rare earths directly from China. It would rather do business with the surrounding nations.
TCMR: Your report says the biggest obstacle to developing deposits is metallurgy, or the ability to recover and process the REEs. Is it true that no two REE deposits are identical, and therefore there is no standard process for extracting and refining REE-bearing minerals?
LM: Yes; no two deposits are identical, so the process will differ from project to project. The refining process of each element is performed using solvent extraction or ion exchange processes that are well known, but the balance of chemicals used and the design of the processes depend on the composition of the feedstock REE concentrates. It is definitely not one size fits all, so companies have to determine how to economically extract their REEs, which is complicated and expensive. My understanding is that solvent extraction is commonly used for the lights, while companies with high percentages of heavies may have to use the ion exchange process as well, and that tends to be equally expensive. So it is an expensive endeavor for a company that wants to extract anywhere from six to 10 elements. That is a lot of elements.
TCMR: We should also consider production of concentrates versus oxides. It is easier to produce concentrates, but concentrates reap only about 20% of the value oxides offer, correct?
LM: Potentially, yes. It depends on the percentage of the most expensive elements. For example, if the REE distribution in a company’s concentrate has high percentages of dysprosium and terbium and other expensive elements, then that could be a motivation for them to separate and refine the elements and realize the individual values. Those with more of the lights will realize less value for the individual refined elements. Some concentrates have more of the high-priced elements than others, but I’m not sure if a company can realize that price; the market for the concentrate is not very well known outside of China.
TCMR: Many companies are talking about producing oxides instead of concentrates, in hopes the market will attribute greater value to their projects, share prices having dropped from where they were in summer. Do you have any comments on that
LM: Either way, companies will always realize less of a price if they sell it as a concentrate instead of as individual elements. And yet, from concentrate to the individual elements, a lot of capex is neededin some cases, it is justified, depending on the prices, but in others, it might not be. Meanwhile, time will tell where the prices of these elements will end up, and that will give a much better picture of these projects’ economics.
TCMR: What are the top four or five projects that are most advanced in terms of being able to economically recover and process the REEs and their respective deposits?
LM: Molycorp is well positioned. Another one is Rare Element Resources Ltd. (RES:TSX; REE:NYSE.A). Some say it is similar to Molycorp because it has high percentages of bastnaesite minerals, but the deposit is somewhat different. Again, no two deposits are identical. I had a chance to visit the lab that is performing its pilot study, and it seems Rare Elements Resources is the most advanced project at Hazen Research Labs. It’s the one that is in pilot scale, so it may be fair to say that is closer to production.
Another project making significant progress is Matamec Explorations Inc. (MAT:TSX.V; MRHEF:OTCQX ), which is working with SGS Canada on its Kipawa deposit, and in the last few months the company has disclosed detailed information about the metallurgy. It is very confident about the results, and a pilot study should happen next year. Matamec should be disclosing details of its PEA in the next couple of days; relatively speaking, it has made significant progress in communicating its project advancement to the market. Hopefully the PEA will show some positive economics.
TCMR: That is primarily because of eudialyte, the mineralization hosting the REEs?
LM: Correct.
TCMR: Is that easier to process?
LM: Not historically. Eudialyte has always been problematic because silica gel formation was an issue in the processing and recovery of REEs. But working with SGS and other private consultants, Matamec has solved that problem, according to what the company has disclosed.
TCMR: Is there news regarding a possible offtake agreement there?
LM: It has not officially been disclosed, but Matamec has attended different conferences and it appears that Japanese and other Asian interest parties have approached the company numerous times. So, my perception is that there is significant interest in the Kipawa deposit, and that could materialize in an offtake or a memorandum of understanding or something like that.
TCMR: And you have a Speculative Buy rating on Matamec with a 12-month target of $1.50? It’s currently trading at about $0.26.
LM: Correct.
TCMR: Do you expect that will go lower before it goes higher?
LM: It depends on how the overall market performs. I wouldn’t expect it to go much further down, especially when the company is just days away from a PEA. Between that and the potential for an offtake agreement, things look positive for the stock.
TCMR: Another company you have a spec buy on is Frontier Rare Earths Ltd. (FRO:TSX). You had a 12-month target of $9.83 in July, but now that is down to $5.90. Why the 40% drop?
LM: Right after I did my first forecast, I was surprised to see the prices growing in increments of 300% and higher, and then it all collapsed. I did not predict that behavior at all, so I had to go back and adjust. I was also expecting to hear more details about the metallurgy, but I didn’t have access to those. At the same time, I continually try to understand the mineralogy and its potential challenges. All this led me to lower the recovery rates and prices, which reflected that decline.
TCMR: How does Frontier Rare Earths Ltd., with 532 thousand tons (Kt) of contained total rare earth oxides (TREO) in the indicated category and 415 Kt contained TREO in the inferred category, compare to other deposits in the space.
LM: Compared to other light deposits, it is a good size. Frontier plans to produce 20 Kt per year, and just based on the indicated resource of 22.9 million tons (Mt), it should be able to do that for 20 years. According to the company, it also has the potential to extend it further.
TCMR: The prospecting rights for Zandkopsdrift, Frontier’s main project in South Africa, are held by a subsidiary called Sedex Minerals. Frontier owns 74% of that project, and a black empowerment group owns the other 26%, according to the South African ownership laws. Does that hurt Frontier, not owning the project outright?
LM: A few investors are not comfortable with that, and those are investors who just don’t invest in South Africa because of that policy they don’t know what the South African government’s next move will be. Thus, it may hurt Frontier a little. But since that is South Africa’s law, it also affects other companies operating there. For example, most platinum comes from South Africa and Russia, and there are still good investment opportunities there. So, it doesn’t make a project less relevant or important. I have met James Kenny, Frontier’s president and CEO. He is competent, very passionate about the project and very active. He is working hard to bring value to the project and bring partners to the tableand he has managed to bring Korea Resources Corp. (KORES) and a consortium of Korean companies in. He has been successful so far.
TCMR: Last time you spoke with The Critical Metals Report, you introduced our readers to Montero Mining and Exploration Ltd. (MON:TSX.V). Any updates on it?
LM: Montero has an established resource for the rare earths of about 5 Mt, and the company is working on expanding that. But Montero tells me that bastnaesite is the main mineral in the deposit, which is similar to the Molycorp deposit, Mountain Pass. Montero has been able to produce a mineral concentrate, and it has been really aggressive in terms of being able to get to the market first. There is hope that, by the end of next year, it will be able to sell either a concentrate or even individual oxides. That is very positive.
TCMR: Montero also increased its interest in Wigu Hill, its REEs project in Tanzania, by 10%, to 70%. Do you think the company will eventually buy it outright?
LM: If it becomes successful. That is probably the company’s plan.
TCMR: One other major issue right now is financing. Investors are becoming increasingly skeptical about companies’ abilities to produce returns. What companies have enough money to continue with their development plans for at least a year, and that don’t need further dilution any time soon?
LM: Molycorp has been very successful in raising money. Frontier has about $50 million (M), and it only needs about $20M to finish its feasibility study by next year. Rare Element Resources is also in a very good cash position. It has about $74M in cash, and it needs a fraction of that to complete its feasibility study by the end of next year as well; it can even extend it. Hypothetically, even if there were a recession for the next two years, I think these companies would have enough cash to complete their studies. Other companies that probably have sufficient cash for a year: Tasman Metals Ltd. (TSM:TSX.V; TAS:NYSE.A; TASXF:OTCPK; T61:FSE), Ucore Rare Metals Inc. (UCU:TSX.V; UURAF:OTCQX) and even Matamec. More than 12 months would probably not be possible for those three, however.
TCMR: What about the opposite? What are some companies that are looking to finance in a market that’s hostile to small-cap REE companies?
LM: I did hear that Great Western Minerals Group Ltd. (GWG:TSX.V; GWMGF:OTCQX) just raised $15M recently. The company has plans to build a concentration facility and is trying to produce as early as 2013. It will need more money as it moves from exploration into construction and to production of oxides and metals. It will be interesting to know how far the $15M will take the company and when it will need to come back to the market.
TCMR: In your report you write, “The Swedish government has declared Tasman Metals’ Norra Karr deposit as a strategic resource of national interest, and a consortium of rare earth end-users in Europe are closely monitoring the progress of the project. The project has the potential to generate significant volumes of all the key major rare earths.” With some of those key European players behind Norra Karr, is there any way that project can be fast-tracked?
LM: Only if there is a significant direct interest from the local government and perhaps even the Swedish government. The Europeans are generally conservative in terms of their mining policies, so they will want to ensure all the environmental studies are in place and that a mine development in the region will be done properly. So, while Sweden is eager to have the project going forward, they will probably stay cautious, avoiding extreme fast tracking because of the risk of pollution or other troubles. I hear that the European Union is interested in seeing this project develop, but I don’t think the European Union has enough influence over Sweden’s local government; those governments still operate independently. I think Sweden will take its time and make sure the work is done properly.
TCMR: Is metallurgy the main hurdle for fast tracking project development?
LM: Yes. Environmental studies are important and they take time, but not usually five years. The metallurgy is very important, making sure all the tests are doneand many of the tests are done by the same labs, which are testing or analyzing multiple deposits from multiple companies, and that causes delays. So metallurgy is definitely an important aspect in the timing to market.
TCMR: Any advice for investors in this space?
LM: Examine the same factors you would for any mining company: the exploration, the potential success, potential resource growth, infrastructure and exploration resultspay attention to the project’s minerals, and any radioactive elements. They might have bastnaesites or monazites, or some other minerals that have been processed commercially. Understanding different minerals, the metallurgy and how they are processed is key. Management and the team are also important: experience, delivery, starting and finishing projects. These are all important aspects for consideration.
TCMR: Thank you, Luisa. It’s been a pleasure.
Luisa Moreno is a senior mining and metals analyst at Jacob Securities Inc. in Toronto. She covers industry metals with a major focus on electric and energy metal companies. She has been a guest speaker on television and at international conferences. Moreno has published reports on rare earths and other critical metals and has been quoted in newspapers and industry blogs. She holds a bachelor’s and master’s in physics engineering as well as a Ph.D. in materials and mechanics from Imperial College, London.
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DISCLOSURE:
1) Brian Sylvester of The Critical Metals Report conducted this interview. He personally and/or his family own shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of The Critical Metals Report: Ucore Rare Metals Inc., Tasman Metals Ltd., Rare Element Resources Ltd., Matamec Explorations Inc., Frontier Rare Earths Ltd. and Montero Mining and Exploration Inc.
3) Luisa Moreno: I personally and/or my family own shares of the following companies mentioned in this interview: None. I personally and/or my family am paid by the following companies mentioned in this interview: None.
Source: http://www.businessinsider.com/the-age-of-rare-earth-metals-luisa-moreno-2011-12
Rare Earth Elements are not the same as Rare Industrial Metals
Rare Earth Elements
Randy Hilarski has also released a video on this article that can be watched by clicking here.
I read articles from other writers who often refer to Rare Industrial or Technical Metals as Rare Earth elements. I would like to take some time and clear up the issue. I deal with RIM’s and REE´s on a daily basis. The two might both be considered metals but that is where the similarities end.
First we have REE´s or Rare Earth Elements. These metals consist of 17 metals, the Lanthanides plus Scandium and Yttrium on the periodic table of the elements. These metals are in a powder form, making them difficult to assay and store. One important factor that is often mentioned is that they are not rare. This is very true, but finding REE´s in large deposits is difficult.
In the mining sector REE mines are standalone mines, that focus on the mining and refining of REE´s exclusively. Currently around 97% of all REE´s are mined and refined in China. Historically REE mining and refining has been a dirty business, which has affected the environment around the mines. The elements Thorium and Uranium are often found along with the REE´s in the deposits causing the slurry to be slightly radioactive when processed. The use of highly toxic acids during the processing can also have serious environmental impact. Many companies are trying to open REE mines but they are meeting headwinds, as nations and people do not want these mines in their backyard.
Over the last few years China has dramatically cut its export of REE´s. This and the increased need for REE´s have caused a meteoric rise in the value of these metals. The one area that very few people talk about is the role of the media combined with speculators in raising the value of REE ETF´s in particular. For the last couple years REE´s were the rock stars of the metals. The news has calmed as of late, but the supply and demand factors that caused the metals to soar are still in place. Recently China closed it BaoTao mine until REE prices stabilize.
Rare Earth Metal - Indium
Rare Industrial Metals, RIM´s or Technical metals are another group entirely. The RIM´s are made up of metals used in over 80% of all products we use on a daily basis. Without these metals you would not have the world of the 21st century with our mobile phones, hybrid cars, flat screen TV´s, highly efficient solar energy and computers. Some of these metals include Indium, Tellurium, Gallium, Tantalum and Hafnium. These metals really are rare compared to the Rare Earth Metals which causes a great deal of confusion. These metals are in a metallic form, stable and easy to store and ship.
RIM´s are mined as a by-product of base or common metal mining. For example Tellurium is a by-product of Copper mining and Gallium is a by-product of Aluminum and Zinc mining. The mining of the RIM´s currently are for the most part at the mercy of the markets for the base or common metal mining. If the Copper mines of the world decide to cut production due to Copper losing value, this will have a huge impact on the amount of Tellurium that can be refined. Up until now, because of the previous small size of the RIM market, many companies do not feel the need to invest money into better technology to mine and refine these metals. The RIM´s would have to be valued much higher to gain the attention of the mining industry.
When China cut exports of REE´s they also cut exports of RIM´s. This put pressure on the value of these metals. RIM´s have increased in value, but nowhere near the meteoric rise of the REE´s. Most of the metals increased in value around 47% in 2010 and 25% so far in 2011. There is still a lot of room for growth in the value of these metals (not based on speculation like REE´s) as demand is exceeding supply now and in the future.
For Example, when REE´s and the stock market recently fell sharply the RIM´s came down slightly in value but have held their own extremely well. On a further note, according to Knut Andersen of Swiss Metal Assets, ¨Even though prices of the Rare Industrial Metals continue to go up in value, consumers will eventually only see a very small increase in the price of the end products, because there is so little of each metal used to produce these products. Also if the people can´t afford a smartphone they will still buy less expensive phones that still use the same Rare Industrial Metals¨.
The need for RIM´s has risen sharply over the years and will continue to grow at astronomical rates. China, India, South America and the whole of Africa with hundreds of millions of new consumers are now buying and using computers and mobile phones to name just a few products.
The future is bright for the technologies and the Rare Industrial Metals that make them work and for anyone who participates in stockpiling these metals now to meet future increased demand.
By: Randy Hilarski – The Rare Metals Guy
Lowman: Reliant on rare earth
Rare Earth Elements critical to 80% of Modern Industry
Science … tells us that nothing in nature, not even the tiniest particle, can disappear without a trace. Nature does not know extinction. All it knows is transformation … and everything science has taught me … strengthens my belief in the continuity of our spiritual existence after death. Nothing disappears without a trace.
— Werner von Braun
What do Yttrium, Promethium, Europium and Luterium have in common? Although they may sound like a foreign language, these rare earth elements comprise the backbone of new technologies for the 21st century. Seventeen chemical elements, also called rare earths, are appended to the existing periodic table of elements, and their relatively new discoveries have advanced the electronics industry. Yttrium, when alloyed with other elements, forms part of aircraft engines; Promethium is an essential component of long-lived nuclear batteries; Europium powers images in flat-screen televisions; and Luterium detects radiation in PET scanners (positron emission tomography) used for medical research. Many new technologies — hybrid cars, televisions, cellphones, computer hard drives, camera lenses, and self-cleaning ovens — owe their success to rare earth elements.
The Prius alone contains rare earth elements for its LCD screens, electric motor and generator, headlight glass, catalytic converter, UV windows and mirrors; other cars require similar components to provide competitive features for buyers. The magnets under the hood of a Prius are some of the most powerful on the planet. Different from older technologies, they use rare earth elements to charge the battery and turn the wheels.
Without rare earth elements, your iPod earbuds would still be large, old-fashioned and unwieldy headphones.
As the world’s technologies become increasingly dependent on rare earth metals, their reserves become more valuable. Half the world’s rare earth deposits are in China, which mines almost 100 percent of global supply. Because China recognizes its own increasing needs for new technologies, the country recently reduced rare earth element export quotas by almost 40 percent in 2010.
So what will other countries do to remain competitive in the high-technology market? The answer: Train the emerging generation in STEM education — science, technology, engineering and math — to develop new technologies.
In North Carolina, hubs like Research Triangle Park and Raleigh’s new Nature Research Center are ideal incubators for the next generation of scientists and engineers. Researchers are working around the clock to design products that do not require rare earth elements. At Ames Laboratory in Iowa, scientists are trying to create magnets devoid of any rare earth metals. General Electric is applying nanotechnology to wind turbines as part of its clean-energy portfolio. Nanocomposite magnets will reduce the need for two rare earth metals: neodymium and dysprosium, which function to line up the magnetic field in wind turbines or hybrid cars.
Another strategy for minimizing the reliance on China’s rare earth deposits is to locate reserves closer to home. On California’s Mojave Desert, several rare earth mining operations are reopening. Another option involves improved recycling of cellphones and other products that contain rare earth elements.
The most economical solution is to reduce our reliance on rare earth elements altogether. Toyota is scrambling to develop technologies that do not require magnets utilizing rare earth elements in hybrid cars, and the television industry hopes to someday eliminate the need for Europium and Terbium in its screen imagery.
Training the next generation of scientists and engineers to inspire creative solutions is critical; otherwise, iPods, PET scans and plasma televisions may become increasingly limited in their production. After all, where will America be without scandium, a rare earth element alloyed with aluminum in baseball bats?
By: Meg Lowman
Source: http://www.heraldtribune.com/article/20111114/columnist/111119877?p=3&tc=pg
LED Applications Growing, Will Only Lead to More REE Demand
LEDs
An end product’s supply chain can be far reaching, with parts or all of the upstream and downstream producers sometimes getting hit at different times by economic forces.
This appears to be happening in China’s domestic LED market, which has seen a marked fall-off in demand, according to the China Strategic Monitor. That’s hit pricing during the second half of this year.
“Investment plans are being curtailed both in the upstream and downstream compared to those presented last year,” according to the report. “Despite this there are many companies still attracted to the market and many pharmaceutical companies and even wineries in South China are moving into LED lighting products. Based on this trend the industry is likely to realize large-scale production capacity over the next 2 or 3 years and pricing for products should fall a further 20-30%.”
Industry watchers reckon 10% of LED-driven businesses in China could go bankrupt this year. And one chief executive, speaking at the recent China Industrial Development Forum for the Low Carbon Economy, said 90% of all China’s LED businesses are running at a loss.
Interesting. The country’s Guangdong province said earlier this month that it had exported US$3.81 billion worth of lighting products between January and August – that’s a 21% increase over the same time period last year.
“Customs authorities indicated that the main export market is still Europe and America with the two taking up 63.2% of the total,” a report said. “Though exports to Hong Kong, Japan and other ASEAN countries are up 60% on last year.”
The massive rise in LED exports is ascribed to the increasing trend of upgrading to energy-efficient lighting combined with the higher production values and quality in China, according to the report.
Still, various companies producing LED products complain that the industry is hit with high selling, raw material and R&D costs. So, while a company reports a 32% jump in LED sales in the third quarter of 2011when compared to 2Q10, the senior executives also talk about the need to implement structural changes, improve execution, reduce overhead costs and initiate job cuts.
Now, the LED industry uses a wide range of phosphor materials to convert light emission from LED chips into a different wavelength. So, combining a blue LED with one or more phosphors can create a white LED. Many of the phosphors used in LEDs contain rare-earth elements, the most common one being the yttrium aluminum garnet, which is doped with cerium. Another phosphor, called TAG, contains terbium, while silicate and nitride phosphors are commonly doped with cerium or europium.
Here’s a small example of how LED products are being used: Kingsun Optoelectronic Co has just installed more than 10,000 street lights containing one million high-efficiency white LEDs along 75 miles of roads in Shenzhen. Kingsun anticipates a 60-percent reduction in energy consumption compared to the high-pressure sodium fixtures that have been replaced in the upgrade.
And while LEDs are now widely recognized as emerging light sources for general illumination, it turns out that LED lighting can also be used in a broad range of life-science applications such as skin-related therapies, blood irradiation, pain management, hypertension reduction and photodynamic therapy, which, when combined with drugs, is finding its way into cancer research.
In other words, the LED industry is only now just starting to be exploited, meaning demand will grow across all sectors. Translation – more rare earths will be needed in producing these products as research advances are made and commercial producers become more lean and efficient.
Source: http://www.raremetalblog.com/
By: Brian Truscott
Alternatives to truly ‘rare earth’
Rare Earth Elements critical to 80% of Modern Industry
Science…tells us that nothing in nature, not even the tiniest particle, can disappear without a trace. Nature does not know extinction. All it knows is transformation…and everything science has taught me … strengthens my belief in the continuity of our spiritual existence after death. Nothing disappears without a trace.
Werner Von Braun
Yttrium, promethium, europium, and luterium may sound like mythological characters, but they’re rare-earth elements that comprise the backbone of new technologies for the 21st century.
Their discovery in recent years has advanced the electronics industry. Yttrium, when alloyed with other elements, forms part of aircraft engines; promethium is an essential component of long-lived nuclear batteries; europium powers images in flat-screen televisions; and luterium detects radiation in PET scanners used for medical research. Many new technologies owe their success to rare-earth elements.
The Prius, for example, contains rare-earth elements for its LCD screens, electric motor and generator, headlight glass, catalytic converter, UV windows, and mirrors; other cars require similar components to provide competitive features for buyers. Magnets under the hood of a Prius are some of the most powerful on the planet. Different from older technologies, they use rare-earth elements to charge the battery and turn the wheels.
As the world’s technologies become increasingly dependent on rare-earth metals, their reserves become more valuable. Half the world’s rare-earth deposits are in China, which currently mines almost 100 percent of global supply. Because China recognizes her own increasing needs for new technologies, it reduced rare-earth element export quotas by almost 40 percent in 2010.
What will other countries do to remain competitive in the high-tech market? Develop new technologies. Hubs like Research Triangle Park and Raleigh’s new Nature Research Center are ideal incubators for the next generation of scientists and engineers. Currently, researchers are working around the clock to design products that do not require rare-earth elements.
The most economical solution is to reduce our reliance on rare-earth elements altogether. Toyota is scrambling to develop technologies that do not require magnets utilizing rare-earth elements in hybrid cars; the television industry hopes to someday eliminate the need for europium and terbium in its screen imagery.
Training the next generation of scientists and engineers to inspire creative solutions is critical; otherwise, iPods, PET scans, and plasma televisions may become increasingly limited in their production. After all, where will America be without scandium, a rare-earth element alloyed with aluminum in baseball bats?
By Meg Lowman
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