As seen on:
CBS moneywatch ~ The Miami Herald
Upcoming shows:
May 8-10th, Uruguay Offshore Investment Conference 2013 | May 13-16th, Moneyshow, Las Vegas 2013 | May 15-18th, Wealth and Liberty preservation 2013, St Kitts | June 2-4th, Private Wealth Management Summit Spring 2013, Ritz Carlton, Atlanta | October 9-13th, 2013 Total Wealth Symposium
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.
Prices of Rare Earth Metals Declining Sharply
Neodymium Price Graph
HONG KONG — After nearly three years of soaring prices for rare earth metals, with the cost of some rising nearly thirtyfold, the market is rapidly coming back down.
International prices for some light rare earths, like cerium and lanthanum, used in the polishing of flat-screen televisions and the refining of oil, respectively, have fallen as much as two-thirds since August and are still dropping. Prices have declined by roughly one-third since then for highly magnetic rare earths, like neodymium, needed for products like smartphones, computers and large wind turbines.
Big companies in the United States, Europe and Japan that use rare earths in their manufacturing have been moving operations to China, drawing down inventories, switching to alternative materials or even curtailing production to avoid paying the extremely high prices that prevailed outside China over the summer, executives said at an annual conference in Hong Kong on Wednesday.
As demand for rare earths wilted outside China, speculators dumped inventories, feeding the downward plunge. Cerium peaked at $170 a kilogram, or $77 a pound, in August but now sells for $45 to $60 a kilogram. Prices are negotiated by buyers and sellers directly with one another and reported by market information companies like Asian Metal, based in Pittsburgh.
That is still far above cerium’s price of $6 a pound three years ago, before China, the world’s dominant producer, sharply cut its export quotas.
“We all learned a hard lesson in July and August, how high these prices can go before customers begin yelling,” said Mark Smith, the chief executive and president of Molycorp, the only American producer of rare earths.
He added that rare earth mining outside China remained very profitable even with the price decline, which has brought the market back to the level of last spring.
The sharp decline in demand and prices outside China could create yet another shortage next year, said Constantine Karayannopoulos, the chief executive of Neo Material Technologies, a Canadian company that has its factories in China.
That is because Chinese exporters are unlikely to use all of their export quotas this year — since demand is down — and the Chinese Commerce Ministry has historically penalized exporters that do not use all of their quotas by giving them smaller quotas the next year.
China mines 94 percent of the rare earth metals in the world. Through 2008, it supplied almost all of the global annual demand outside of China of 50,000 to 55,000 tons. But it cut export quotas to a little more than 30,000 tons last year and again this year and imposed steep export taxes, producing a shortage in the rest of the world.
Together with a two-month Chinese embargo on shipments to Japan during a territorial dispute a year ago, the trade restrictions and shortage resulted in prices outside China reaching as much as 15 times the level within China last winter. That created a big incentive for companies that use rare earths in their products to move factories to China or find alternatives.
Executives spoke at a conference in Hong Kong sponsored by two London companies, Roskill Information Services and Metal Events, that have aimed to stay neutral on the trade and geopolitical issues roiling the industry.
Many Chinese companies have halted production this autumn in a bid to stem the decline in prices, several executives said. The Chinese Commerce Ministry has also blocked companies from exporting at prices that it deems too low, setting a minimum price for cerium exports, for example, of $70 a kilogram.
Chinese exporters are on track to use only 20,000 to 25,000 tons of their quotas this year, setting the stage for lower quotas next year, Mr. Karayannopoulos said.
By comparison, industry estimates now put annual demand outside China at a little under 40,000 tons, in part because of conservation efforts regarding rare earths.
Automakers are finding ways to use less neodymium in the magnets of many cars’ small electric motors. Oil companies are finding ways to use less lanthanum in refining, and industries like electronics and wind turbine manufacturing are finding ways to use less dysprosium.
By: KEITH BRADSHER
Source: http://www.nytimes.com/2011/11/17/business/global/prices-of-rare-earth-metals-declining-sharply.html?_r=1
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
Why China’s Rare Earth Metals Matter
For several months, I have alerted readers to the potential supply crisis of critical rare earths (REMX), which are used in our most vital defense technologies (ITA) and high tech industries (QQQQ). The recent volatility in the equity markets have caused many investors to flee rare earth mining stocks in search of safe havens in gold (GLD) and long term treasuries (TLT). This trend should be transitory in nature. We may see a strong rebound in many of these rare earth stocks once the uncertainty regarding the ending of QE2 winds down.
The latest Chinese data indicate that rare earth exports are continuing to drop by more than half compared with last year’s output. In April, China exported only 1,819 tons of rare earths, a shortfall of 53% from the previous year.
High tech manufacturers outside of China must look elsewhere to satisfy their rare earth needs. Rare earth prices are soaring, but the rare earth mining stocks are not reflecting the elevated prices yet. This phenomenon will not last long as institutions will begin catching on to the divergence between rare oxide prices and undervalued rare earth miners. Prices are soaring, rising almost ten times in the past year, forcing manufacturers in Japan, South Korea, the United States and Europe to search for future supply for their survival. This should be a bonanza for rare earth developers down the road, once manufacturers dip their toe into the water and acquire some of these vital assets. Once one does, we may see a domino effect of consolidation. It’s within the realm of possibility that cash-rich manufacturers will be compelled to enter agreements and alliances with global sources of supply and potential miners.
It’s time for the affected industrialized nations to do their own heavy lifting in providing these vital elements so necessary for the very survival of their manufacturing base. We are talking here of an emergency process, which will take time to develop from mining to manufacturing. Advanced nations must think of urgent measures such as developmental fast tracking, financing and legislative expediting to bring these projects to fruition.
Noises are being made about taking China to court, namely through the World Trade Organization. It is questioned whether such a resort to complicated and lengthy legal procedures can be successful. Time is truly of the essence. Whether the proposed case has merit or not, modern industrialized nations must seize the high ground and move rare earth mining forward.
Development of the rare earth initiative is long past due. The Department of Defense requires it and the high tech industry demands it. The West has the expertise and the capability of recapturing the base that was once ours and was co-opted by the Chinese.
June 7, 2011 By Jeb Handwerger
Recent Posts
- How to “Split Up” Business Property as an Asset Protection Strategy
- Introduction to Asset Protection Strategies
- Using Precious Metals as a Powerful Hedge Against Inflation
- Wealth Preservation To Survive the Crash of the US Dollar
- Why In these Turbulent Times, Rare Earth Metals Can be More Precious than Gold
- What are the differences between a Roth and Traditional Individual Retirement Account (IRA)?
- What are Some of the Uses of Rhenium
