Rare Earth

Could the renewables industry suffer from a lack of scarce metals?

It is not just in laptop computers, mobile telephones and LED screens that scarce metals are to be found but also in solar cells, batteries for mobile technologies and many other similar applications. And the rising demand for these metals increases the risk of a bottleneck in supplies…

“There is no future without scarce metals!” This was the very clear message with which Peter Hofer, a member of Empa’s Board of Directors, greeted guests at the recent Technology Briefing on scarce metals held at the Empa Academy.

After all, it is scarce metals in batteries and motors that keep electric vehicles rolling and which, in automobile catalytic converters, clean up the exhaust gases.

Hofer said: “Materials with special properties are essential if we are to find solutions to the problems caused by our ever-increasing mobility requirements.”

The term scarce metals includes gallium, indium, cobalt and the platinum metals, in addition to the rare earth metals which are used (together with iron and boron), for example, to make the very strong magnets needed in wind turbines.

And manufacturers like to use tantalum for the capacitors on mobile telephone printed circuit boards (PCBs) because this transition metal, when used in these tiny components, enables them to store and release large amounts of electrical energy. The demand is high, with more than 60% of the tantalum mined being used for this application.

The darker side

But, as Patrick Wäger, the initiator of the Technology Briefing and an expert on scarce metals, explained, everything has a darker side to it. Raw materials which can only be mined and refined in a few countries, for which alternatives are not easy to find and which have a low rate of recycling must are considered to be critical. China, for example, almost completely controls the supply of rare earth metals from which high-performance permanent magnets are manufactured.

Wäger, who is a staff member of Empa’s Technology and Society laboratory, added that by imposing export restrictions the Chinese Government has forced prices to rise, leading to delivery bottlenecks. Currently great efforts are being made to reduce this dependency by expanding supply capacities outside of China, such as in the USA, Australia or Greenland – with implications also for the environment.

Tantalum, required for high-performance micro-capacitors, is viewed in the microelectronics industry as a material which is difficult to substitute, and to date it has not been possible to recover it from end-of-life products. Particularly worrying are the facts that tantalum is illegally mined in certain Central African countries under degrading conditions, and the profits from its sale are used to finance civil wars.

“Swiss companies also need to think closely about how they can reduce this dependency and avoid the possibility of delivery bottlenecks,” remarked Jean-Philippe Kohl, the Head of Swissmem’s Economic Policy Group.

A recent survey of the industry association’s members in the Swiss mechanical engineering, electrical and metal sectors showed that every single company contacted used at least one of the critical raw materials. In order to protect themselves from possible shortages many of the companies had signed long-term delivery contracts with their suppliers. The others are cooperating with research institutions, either to develop alternative raw materials and technologies, or to optimise existing processes.

Alternatives from research labs

As an example of this approach, Stephan Buecheler explained how Empa’s Thin-Films and Photovoltaic laboratory was working to reduce the thickness of the critical tellurium layer in flexible solar cells which use cadmium telluride (CdTe) as the active material.

Similarly, efforts are being made in solar cells based on copper-indium-gallium-diselenide (CIGS) to replace the critical indium oxide with zinc oxide. In making these changes no loss of performance is expected. Quite the opposite, in fact – the aim is to increase the efficiency of these devices by optimal use of raw materials and fast processes. Researchers have already shown that this is possible, having set a new efficiency record last year.

Again with the aim of reducing scarce metal usage, the institution’s Internal Combustion Engine laboratory has developed an extremely efficient and economic foam catalyst. Changing the form of the ceramic substrate has enabled the use of less of the noble metals palladium and rhodium in comparison to conventional catalysts.

In collaboration with Empa’s Solid-State Chemistry and Catalysis laboratory, the motor scientists are conducting research work on regenerative exhaust gas catalysts which employed perovskites instead of scarce metals. The former are multifunctional metal oxides which, because of their special crystal structure, are capable of transforming heat directly into electrical energy.

The recycling challenge

Despite all the doom and gloom, we will not have to do without scarce metals entirely. As Heinz Boeni, head of the Technology and Society laboratory, maintained there is of course a reserve of scarce metals to be found in end-of-life electrical and electronic products.

While natural primary deposits are being used up, the ‘anthropogenic’ secondary deposits created by man are increasing continuously. In a ton of natural ore as mined there is typically about 5 g of gold. In a ton of discarded mobile telephones, on the other hand, there is about 280 g, while the same weight of scrap PCBs contains as much as 1.4 kg of the precious metal! But recovering scarce metals is anything but easy.

“You can’t just pull them out from electronic waste with a screwdriver and a hammer. The recovery process is at least as complex as the design and development of the old appliances themselves,” recycling expert Christian Hagelüken made clear.

A large percentage of scarce metals are to be found in the form of very thin layers or mixed with other substances in the form of alloys, added Hagelüken, whose employer, Umicore, is one of the largest recycling companies involved in the recovery of precious metals from complex waste material. Recycling scarce metals demands the use of complicated recovery processes.

Furthermore, suitable recovery processes alone are not enough to guarantee high recycling rates. According to the experts it is necessary to keep an eye on the whole recycling chain, from collection, disassembly and sorting of the scrap to the actual recovery process itself.

The greatest efforts are in vain if, as is the case in certain countries, end-of-life computers and other electronic appliances are exported to developing and threshold countries where the scarce metals are lost through the inappropriate treatment of the electronic waste, which also represents a danger to human health and the environment. Or, if with a mechanical disassembly - which is common today in Switzerland – the scarce metals are dissipated into fractions from which they cannot be recovered.

Source: http://www.renewableenergyfocus.com/view/23613/could-the-renewables-industry-suffer-from-a-lack-of-scarce-metals/

No future without scarce metals

(Nanowerk News) It is not just in laptop computers, mobile telephones and LED screens that scarce metals are to be found but also in solar cells, batteries for mobile technologies and many other similar applications. The rising demand for these metals increases the risk of a bottleneck in supplies.

Empa researchers and representatives from industry explained at the “Technology Briefing” why scarce metals are essential for many key technologies and how an impending scarcity might be avoided.

“There is no future without scarce metals!” This was the very clear message with which Peter Hofer, a member of Empa’s Board of Directors, greeted guests at the recent Technology Briefing on scarce metals held at the Empa Academy. After all, it is scarce metals in batteries and motors that keep electric vehicles rolling and which, in automobile catalytic converters, clean up the exhaust gases. Hofer again: “Materials with special properties are essential if we are to find solutions to the problems caused by our ever-increasing mobility requirements.”

The term scarce metals includes gallium, indium, cobalt and the platinum metals, in addition to the rare earth metals which are used (together with iron and boron), for example, to make the very strong magnets needed in wind turbines. And manufacturers like to use tantalum for the capacitors on mobile telephone printed circuit boards (PCBs) because this transition metal, when used in these tiny components, enables them to store and release large amounts of electrical energy. The demand is high, with more than 60 per cent of the tantalum mined being used for this application.

The darker side

But, as Patrick Wäger, the initiator of this Technology Briefing and an expert on scarce metals, explained, everything has a darker side to it. Raw materials which can only be mined and refined in a few countries, for which alternatives are not easy to find and which have a low rate of recycling must are considered to be critical. China, for example, almost completely controls the supply of rare earth metals from which high-performance permanent magnets are manufactured. Wäger, who is a staff member of Empa’s Technology and Society laboratory, added that by imposing export restrictions the Chinese government has forced prices to rise, leading to delivery bottlenecks. Currently great efforts are being made to reduce this dependency by expanding supply capacities outside of China, such as in the USA, Australia or Greenland – with implications also for the environment.

Tantalum, required for high-performance micro-capacitors, is viewed in the microelectronics industry as a material which is difficult to substitute, and to date it has not been possible to recover it from end-of-life products. Particularly worrying are the facts that tantalum is illegally mined in certain Central African countries under degrading conditions, and the profits from its sale are used to finance civil wars.

“Swiss companies also need to think closely about how they can reduce this dependency and avoid the possibility of delivery bottlenecks, ” remarked Jean-Philippe Kohl, the head of Swissmem’s Economic Policy Group. A recent survey of the industry association’s members in the Swiss mechanical engineering, electrical and metal sectors showed that every single company contacted used at least one of the critical raw materials. In order to protect themselves from possible shortages many of the companies had signed long-term delivery contracts with their suppliers. The others are cooperating with research institutions, either to develop alternative raw materials and technologies, or to optimize existing processes.

Alternatives from research labs

As an example of this approach, Stephan Buecheler explained how Empa’s Thin-Films and Photovoltaic laboratory was working to reduce the thickness of the critical tellurium layer in flexible solar cells which use cadmium telluride (CdTe) as the active material. Similarly, efforts are being made in solar cells based on copper-indium-gallium-diselenide (CIGS) to replace the critical indium oxide with zinc oxide. In making these changes no loss of performance is expected. Quite the opposite, in fact – the aim is to increase the efficiency of these devices by optimal use of raw materials and fast processes. Researchers have already shown that this is possible, having set a new efficiency record last year.

Again with the aim of reducing scarce metal usage, the institution’s Internal Combustion Engine laboratory has developed an extremely efficient and economic foam catalyst. Changing the form of the ceramic substrate has enabled the use of less of the noble metals palladium and rhodium in comparison to conventional catalysts. In collaboration with Empa’s Solid-State Chemistry and Catalysis laboratory, the motor scientists are conducting research work on regenerative exhaust gas catalysts which employed perovskites instead of scarce metals. The former are multifunctional metal oxides which, because of their special crystal structure, are capable of transforming heat directly into electrical energy.

The “recycling” challenge

Despite all the doom and gloom, we will not have to do without scarce metals entirely. As Heinz Boeni, head of the Technology and Society laboratory, maintained there is of course a reserve of scarce metals to be found in end-of-life electrical and electronic products. While natural primary deposits are being used up, the “anthropogenic” secondary deposits created by man are increasing continuously. In a ton of natural ore as mined there is typically about 5 g of gold. In a ton of discarded mobile telephones, on the other hand, there is about 280 g, while the same weight of scrap PCBs contains as much as 1.4 kg of the precious metal!

But recovering scarce metals is anything but easy. “You can’t just pull them out from electronic waste with a screwdriver and a hammer. The recovery process is at least as complex as the design and development of the old appliances themselves”, recycling expert Christian Hagelüken made clear. A large percentage of scarce metals are to be found in the form of very thin layers or mixed with other substances in the form of alloys, added Hagelüken, whose employer, Umicore, is one of the largest recycling companies involved in the recovery of precious metals from complex waste material. Recycling scarce metals demands the use of complicated recovery processes.

Furthermore, suitable recovery processes alone are not enough to guarantee high recycling rates. According to the experts it is necessary to keep an eye on the whole recycling chain, from collection, disassembly and sorting of the scrap to the actual recovery process itself. The greatest efforts are in vain if, as is the case in certain countries, end-of-life computers and other electronic appliances are exported to developing and threshold countries where the scarce metals are lost through the inappropriate treatment of the electronic waste, which also represents a danger to human health and the environment. Or, if with a mechanical disassembly - which is common today in Switzerland – the scarce metals are dissipated into fractions from which they cannot be recovered.

Source: http://www.nanowerk.com/news/newsid=24127.php

WTO: China rare earth trade defies rules

(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

Critical Metals Vital to Our Lives in Tight Supply

We begin 2012 similar to how we started 2011 when it comes to rare earth, rare technical metals and rare industrial metals. China has over 90% of production and refining. The US and EU governments are scrambling to legislate, source, produce, open and reopen mines. The West has decided to continue down the road of the idea that the markets will take care of the supply and price of these metals. What is alarming is how easily the West was lulled to sleep by China´s ability to supply the world its metals cheaply and efficiently. The West concentrated on making money trading stocks and futures that dealt with these commodities. China concentrated on building the most extensive mining industry in the history of man. Here in 2012 the Department of Energy in the USA has approved a spending bill that includes $20 Million to focus on the supply issues of these metals.

The metals I am speaking about are so vital to our everyday lives. These metals are found in your mobile phones, computers, LCD and LED TV´s, hybrid cars, solar power, wind power, nuclear power, efficient lighting and medical technologies. Here is a list of metals that have been deemed critical.

  • Indium RIM (Solar, Mobile Phones, LCD)
  • Tellurium RIM (Solar, Computers, Semi-conductors)
  • Gallium RIM (Solar, Mobile Phones, LED´s, Fuel Cells)
  • Hafnium RIM (Processors, Nuclear, Lighting, Plasma Cutting Tools)
  • Tantalum RIM (Capacitors, Medical Implants, Mobile Phones, Nuclear)
  • Tungsten RIM (Nuclear, Armaments, Aviation)
  • Yttrium REE (Lighting, Medical Technology, Magnets in Hybrids)
  • Neodymium REE (Magnets in Wind power, Super Magnets, Hybrid Vehicles)
  • Dysprosium REE (Computers, Nuclear, Hybrid Vehicles)
  • Europium REE (Lighting, LED´s, Lasers
  • Lanthanum REE (Hybrid Vehicles, Magnets, Optics)
  • Cerium REE (LED´s, Catalytic Converters, Magnets)

RIM=Rare Industrial Metal REE=Rare Earth Element

The supplies of these metals could hold back the production of green technologies. According to the latest report by the Department of Energy, ¨Supply challenges for five rare earth metals may affect clean energy technology deployment in the years ahead¨. If Green technology is to become main stream, the costs of these technologies have to reach cost parity with traditional energy sources. As long as there are serious supply issues with these metals the costs can´t reach these levels. The other option is finding alternatives like Graphene and Nanotechnologies.

The US and EU need supply chains of the metals that include both mining and refining of these metals. Relying on sovereign states for critical metals such as these, leave a nation vulnerable to outside influence in both politics and economics. Environmentalists have succeeded in influencing politicians to close mines throughout the West. Politicians have legislated the mining industry into the position it is in today. The Western nations must start now to build its supply chain or continue to be at the mercy of the BRIC (Brazil, Russia, India and China) nations for its metal needs.

The best the West can do now is provide, enough metals to meet its own demands. China has reached a point where it can now demand that certain industries produce their products there. If a company decides to try to produce the product in another country China will make producing that item cost prohibitive outside of China by raising the prices of the metals.

The demand for the products these metals are used to produce, are showing few signs of slowing down even in a so-called recession. Governments are subsidizing Green technology, people are buying mobile phones across the planet and everybody wants a nice flat screen TV. Will 2012 pass without countries truly taking this opportunity to fix the problem or will they step up and make the hard decisions which can put the countries back in control over their own destiny?

By: Randy Hilarski - The Rare Metals Guy

Electric cars to be hit by supply disruptions

The advancement of electric cars in the short-term could be affected by supply disruptions.

That’s the verdict of a new report from the US Department of Energy entitled 2011 Critical Materials Strategy, which looks at supply challenges for five rare earth metals – dysprosium, neodymium, europium, terbium and yttrium. These metals are used in magnets for wind turbines and electric vehicles or phosphors in energy efficient lighting. Meanwhile, other elements, including indium, lanthanum, cerium and tellurium, were found to be near critical.

According to the report, demand for almost all of the materials has grown more rapidly than demand for commodity metals such as steel – this has come from consumer products including mobile phones, computers and flat panel televisions, as well as clean energy technologies.

However, the report concludes that manufacturers of wind power and electric vehicle technologies are already looking into strategies to respond to potential shortages. It states that manufacturers are currently making decisions on future system designs, trading off performance benefits of elements such as neodymium and dysprosium against potential supply shortages.

As an example, wind turbine manufacturers are looking at gear-driven, hybrid and direct drive systems with varying levels of rare earth metal content while some electric vehicle manufacturers are pursuing rare earth free induction motors or using switched reluctance motors as an alternative to PM motors.

By: Paul Lucas
Source: http://www.thegreencarwebsite.co.uk/blog/index.php/2011/12/27/electric-cars-to-be-hit-by-supply-disruptions/

Endangered Elements: Tungsten Among China’s Potential Embargo List

It didn’t take long for the panic to set in, last year, when the Chinese government flexed its muscle by threatening the world’s Rare Earth Element (REE) supply. With 95% of REE supplies coming from China, that scare was indeed legitimate. But REEs aren’t the only elements with which China has the potential to choke off. On American Elements’ 2011 Top 5 US Endangered Elements List, three elements (tungsten, indium and neodymium) have over 50% of world supply coming from Chinese mines.

To refresh the memory of those who followed the rare earth surge from last year, and the subsequent piquing of interest in rare earth companies, it began with Japan. As the summer of 2010 was coming to a close, reports of an embargo of shipments to Japan for REEs raised concern for manufacturers who depend upon the elements for production primarily in the tech industry. Within a month, that embargo spread to North America and Europe, and concern over Chinese monopolization rose, along with REE prices, and those of the companies devoted to them. When the embargo ended, relief came to the sector, while the pace of development outside of China received only a minor increase. The threat of supply shortages still lingers, especially with tungsten, indium and neodymium.

The example of tungsten is not to be ignored, as 85% of global production comes from China, which has already indicated it might end all exports altogether due to domestic demand increases. With the highest melting point and greatest tensile strength of all elements, tungsten’s importance is unquestionable. Used in all situations that call for high temperature thresholds or hardness and strength, tungsten is imperative to many modern living standards that depend upon it. From a US perspective, the element’s use in the aerospace program, electronics and military (including in bullets and armor) is critical. To the mining industry as a whole, tungsten is a savior with many uses within the assembly of mining equipment itself, including drills in need of durability. Strangely enough, the United States dismantled domestic production of tungsten ore in 1994 with the last tungsten mine, the Pine Creek Mine in Inoyo, California, going down as a historical footnote en route to Chinese dependence.

Today, tungsten production remains primarily within China, but awareness of a need to develop outside of the PRC is becoming clearer. Options in the western hemisphere are appearing, and may soon be getting the attention they need to aid this drive for domestic independence. Juniors such as North American Tungsten [NTC - TSX.V] and Playfair Mining [PLY - TSX.V] may provide answers that mitigate a possible future supply breakdown. For North American Tungsten, the title of being the western world’s leader in tungsten production doesn’t come lightly. Through developing its Cantung Mine, it provides tungsten concentrate production within the borders of Canada’s Northwest Territories, which from an international standpoint is a much more secure mining investment environment to work within. At a much earlier stage, Playfair Mining is not yet a producer, but is heavily leveraged to the price of tungsten, which today sits around $440/MTU (“metric tonne unit”) or over $20/lb. With a goal in mind to partner with an end user of tungsten metal in order to finance its Grey River deposit into production, Playfair is well aware of the potential impact a tungsten shortage would carry.

Due to its high level of use in the manufacturing sector, a significant number of Fortune 500 companies are dependant upon tungsten’s availability. General Electric and its Tungsten Products Division, along with others like Kennametal and ATI Firth Sterling are among those that would most likely benefit from securing a long term tungsten supply, and are among potential targets should Playfair seek a high-worth partner to put its nearest term tungsten property into production. The company has 4 high-grade deposits with two located in the Yukon, one in the Northwest Territories and another on the southern coast of Newfoundland. Each of the properties was acquired strategically during a period of massively deflated tungsten prices, prior to this latest surge over the $440/MTU mark. This increase represents a 70% rise from the recent low prices that graced Playfair’s entry period. While the commodity’s price has risen, the company’s stock has yet to follow suit.

While the current price of the stock seems to have languished, the team is making strides to be better prepared for when the bigger end-users in need of tungsten come knocking. The board includes experienced individuals who have taken deals into production before, as well as Director James Robertson who took the last big tungsten company outside of China to successful acquisition. In both combined 43-101 compliant and non-compliant resource categories, Playfair’s tungsten properties contain more than an estimated 5.5 million MTUs of WO3. It’s to be expected, though, that since Playfair is an exploration company, these resources have room for expansion. As economic uncertainty lingers in all global markets, crucial and endangered elements such as REEs, tungsten, indium and neodymium will be within the watchful eye of western manufacturers in need of these ingredients for their operations. Whether another anticipated panic is inflicted by possible impending embargo actions by China doesn’t change the dependence we have on endangered elements. And like last year’s REE crisis, a price surge on those companies were set to move prior complications is entirely a likely scenario. G. Joel ChuryProspectingJournal.com

- Disclaimer: The author does not currently hold any shares of any of the companies mentioned in the article. However, some members of Cordova Media Inc., which owns the ProspectingJournal.com, may or may not have interests in one or more of the companies mentioned at the time of publication. Staff members from the Prospecting Journal reserve the right to acquire interests in any of the companies mentioned after 36 hours have elapsed upon initial publication of this article. Playfair Mining is a sponsor of ProspectingJournal.com.

Critical Reading for Rare Earth Metals Investors

A quick search of media stories from the month of December, 2009 shows 24 clips including references to the 15 lanthanides and their related elements scandium and yttrium. By contrast, one day in December, 2011 produced 56 stories on the same resources. Even the tone of REE coverage has transformed over the years. Two years ago, an analyst piece from veteran metals consultant Jack Lifton titled “Underpriced Rare Earth Metals from China Have Created a Supply Crisis ” was a common headline as the world discovered that cheap supplies had left manufacturers vulnerable to a monopoly with an agenda. That supply fear made REE the investment de jour and sent almost all of the rare earth prices through the roof. In December of 2010, the headlines in big outlets like The Motley Fool announced that the “Spot Price of Rare Earth Elements Soar as much as 750% since Jan. 2010.”

Reality soon set in as investors realized that this was not a simple supply and demand industry. First, demand was still vague, subject to change and very specific about the type and purity of the product being delivered. Second, the ramp-up period for companies exploring, getting approval for development, mining, processing efficiently and delivering to an end-user was very, very long. Some became discouraged. That is why this year, the consumer finance site, The Daily Markets ran an article with the headline: “Why You Shouldn’t Give Up on the Rare Earth Element Minerals” by Gold Stock Trades Newsletter Writer Jeb Handwerger.

Through it all, Streetwise Reports has focused on cutting through the hype to explain what is really driving demand, how the economy and geopolitics shape supplies going forward and which few of the hundreds of companies adding REE to their company descriptions actually had a chance of making a profit.

Back in June of 2009, in an interview titled “The Race to Rare Earths,” we ran an interview with Kaiser Research Online Editor John Kaiser that concluded “China’s export-based economy, once dependent on American greed, is now but a fading memory. While the U.S. was busy printing and preening, the Chinese were long-range planning. But America wasn’t the only country caught off guard by China’s strategic, if surreptitious, supply procurement.” Even while other analysts were panicking, Kaiser was pointing out how investors could be part of the solution–and make a profit in the process.

“For the juniors, the opportunity right now is to source these projects. They get title to them, and when these end users want to develop them, they’re going to have to pay a premium to have these projects developed,” Kaiser said. “So it will not be economic logic that results in these companies getting bought out and having their deposits developed. It’ll be a strategic logic linked to long-term security-of-supply and redundancy concerns. And we’re seeing that sort of psychology at work in this market. It’s a bit of a niche in this market. Not as big as gold, but it is an interesting one because of the long-term real economy link implications.”

After years of covering the space by interviewing the growing chorus of analysts and newsletter writers singing the praises of rare earth elements, in June of 2011, we launched The Critical Metals Report to give exclusive coverage to the entire space, including rare earth elements, strategic metals and specialty metals. One of the first experts interviewed was Emerging Trends Report Managing Editor Richard Karn in an article called “50 Specialty Metals under Supply Threat.” He warned that investing in the space is not as simple as some other mining operations. “The market is just starting to become aware of the difficulty involved with processing these metals, which, in many cases, more closely resemble sophisticated industrial chemistry than traditional onsite brute processing. Putting flow sheets together that process these metals and elements economically is no mean feat.”

In this early article, Karn busted the myth that manufacturers would find substitutions, engineer out or use recycled supplies for hard-to-access materials. “The advances we have seen especially in consumer electronics over the last decade and a half have not been driven by lone inventors or college kids tinkering in their parents’ garages, but rather by very large, well-equipped and well-staffed research arms of powerful corporations. The stakes are high and if a certain metal is critical in an application, they will buy it regardless of the price,” he said.

Similarly, a July 2011 article for The Critical Metals Report featured Energy and Scarcity Editor Byron King sharing “The Real REE Demand Opportunity” driven by the automobile industry and beyond. He was one of the first to point out that not all rare earths are the same with Heavy Rare Earth Elements demanding big premiums.

“Going forward, the serious money will be in HREEs, which have a lot of uses other than EVs,” King said. “For example, yttrium is used in high-temperature refractory products. There’s no substitute for yttrium. Without it, you can’t make the refractory molds needed to make jet-engine turbine blades. If you can’t make jet-engine turbine blades, you don’t have jet engines or power turbines. The price points for these HREEs will reflect true scarcity and unalterable demand. People will bite the bullet and pay what they have to in order to get the yttrium.”

House Mountain Partners Founder Chris Berry also addressed the impact of electric vehicle demand on vanadium, a popular steel alloy strengthener now being used in lithium-ion batteries in the interview “Can Electric Vehicles Drive Vanadium Demand? “

“The use of vanadium in LIBs for EVs is not significant yet, but could eventually become important as the transportation sector electrifies. One of the real challenges surrounding LIBs is settling on the most effective battery chemistry. In other words, what battery chemistry allows for the greatest number of charge recycles, depletes its charge the slowest and allows us to recharge the fastest? Today, based on my research, lithium-vanadium-phosphate batteries appear to offer the highest charge and the fastest recharge cycle. It seems that the lithium-vanadium-phosphate battery holds a great deal of promise, offering a blend of substantial power and reliability. I am watching for advances in battery chemistry here with great interest,” Berry said.

In September, Technology Metals Research Founding Principal Jack Lifton shared his insights on why some junior REE companies are prospering while others wither and die. In the article, “Profit from Really Critical Rare Earth Elements,” he said: “Rare earth junior miners are now being culled by their inability to raise enough capital to carry their projects forward to a place where either the product produced directly or the value to be gained from the company’s development to that point by a buyer can be more profitable than a less risky investment. The majority of the rare earth junior miners do not understand the supply chain through which the critical rare earth metals become industrial or consumer products. Additionally, they do not seem to recognize the value chain issue, which can be stated as ‘How far downstream in the supply chain do I need to take my rare earths in order to be able to sell them at a profit?’”

Then Lifton made this important point for Critical Metals Report readers. “It is very important for the small investor to understand that the share market does not directly benefit the listed company unless the company either sells more of its ownership or pledges future production for present, almost always sharply discounted, revenue.” As always, Lifton encouraged investors to follow the money to a specific end rather than the general market demand often envisioned by investors accustomed to the more defined gold market.

In October, JF Zhang Associates’ Principal Consultant and Chief China Strategist J. Peter Zhang shared his insights on “U.S. Manganese Supply as a Strategic Necessity.”

Manganese is now largely used largely in the production of low quality stainless steel, but is being incorporated into lithium-ion batteries. That increased demand is focusing attention on the limited supply outside China. “There really is no electrolytic manganese metals production in the U.S. or anywhere outside China except for a small percentage from South Africa. We don’t produce even a single ounce in North America. Relying on other countries to supply essential commodities (like oil for instance) is always a problem. If China suddenly decided to reduce production, or in the likely event that its domestic demand increases, the world would be out of options. Policymakers need to understand this risk and Congress needs to take action to minimize the potential impacts,” he said. “From the end of 2008 to 2009, China tied things up. Since then, the price has doubled, tripled and quadrupled. That should be a wakeup call. North America needs to either establish a strategic reserve system for critical metals or build production capacity to mitigate supply risk. I think there is some sense of urgency right now, but a lot more needs to be done.”

Picking the right junior is the trick. In the November article “Navigating the Rare Earth Metals Landscape” Technology Metals Research Founding Principal Gareth Hatch outlined the odds. “TMR is tracking well over 390 different rare earth projects at present; I can’t see more than 8-10 coming onstream in the next 5-7 years. Projects already well past exploration and into the development and engineering stage, and beyond, clearly have first-mover advantage.”

Just this month, in an interview entitled, “The Age of Rare Earth Metals” Jacob Securities Analyst Luisa Moreno compared the impact REEs will have on our daily lives with the transformation in the Bronze Age.

“There is an economic war over the rare earths, with China on one side and other industrialized nations on the other—Japan, 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.” Moreno then pointed to the seven companies that could come to the world’s rescue and usher in a miraculous new world of smaller, stronger, more powerful gadgets based on a steady supply of REE materials from reliable sources.

By: The Gold Report
Source: http://jutiagroup.com/20111227-critical-reading-for-rare-earth-metals-investors/

The Age of Rare Earth Metals: Luisa Moreno

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 other—Japan, 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 up—and 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 leverage—and 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 needed—in 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 table—and 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 done—and 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 results—pay 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.

Want to read more exclusive Critical Metals Report articles like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators and learn more about critical metals companies, visit our Critical Metals Report page.

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

 

China’s environmental watchdog tightens control over rare earth projects

BEIJING, Nov. 24 (Xinhua) — The Ministry of Environmental Protection on Thursday announced a list of the first 15 rare earth metal enterprises that have passed the ministry’s environmental protection check.

The enterprises were selected from 84 companies that passed inspections by environmental watchdogs in 14 provincial divisions, said Tao Detian, the ministry’s spokesman.

China currently has more than 300 enterprises working in the rare earth metal industry.

Environmental protection departments across China will not accept environmental impact assessment reports on any new rare earth projects unless they are submitted by enterprises that are on the list, Tao said.

Without an environmental impact assessment report, no industrial projects can be legally approved in China.

In April, the ministry started a nationwide inspection of rare earth enterprises, evaluating their environmental impact, pollution control measures and efforts to reduce emissions of greenhouse gases.

According to the inspection, rare earth enterprises have typically not performed well in controlling pollution and protecting local environments, Tao said.

The ministry found that several enterprises did not submit environmental impact assessment reports, while others did not properly dispose of dangerous industrial waste, he said. Mining enterprises, in particular, have caused serious damage to local ecology, Tao said.

Enterprises that have failed the inspection have been urged to change their practices, while those that have seriously violated environmental laws will have their operations suspended and be forced to pay fines, Tao said.

The inspection will be expanded to highly-polluting industries such as steel production, leathermaking, lead-acid battery manufacturing, citric acid production and ethyl alcohol production, he said.

By: Xiong Tong
Source: http://news.xinhuanet.com/english2010/china/2011-11/24/c_131267958.htm

China’s Rare-Earth Domination Keeps Wind Industry On Its Toes

Wind turbine manufacturers are scrambling to find alternatives to a key element used in direct-drive permanent magnet generators (PMGs), thanks to skyrocketing prices and diminishing supplies of crucial rare earths.

China currently provides 94% of the world’s rare earths, including neodymium and dysprosium, which are used in the magnets for direct-drive wind turbine motors. However, the Chinese government has put new restrictions on rare-earth mining that have resulted in lower supply levels, according to a report from research firm Roskill Information Services (RIS).

For instance, this year, the Chinese government issued new regulations requiring all companies that mine rare earths to show they have mandatory production plans, appropriate planning permission, environmental certification and safety licenses.

But it was last year’s tightening of China’s export quota that really impacted the rare-earth market. Between May 2010 and August 2011, Chinese internal prices for neodymium increased eightfold - a reflection of the shortage of rare earths for magnets within China, RIS notes.

China has also ramped up its export taxes on rare earths, causing a shortage in the rest of the world.

As a result, only 25% of the world’s rare-earth supply will come from China by 2015, as demand for the neodymium and dysprosium necessary for the manufacture of magnets for wind turbines will climb at a pace of 7% to 9% per year through 2015, according to RIS’ research.

This growth in demand could result in a supply deficit within that time frame, causing wind turbine manufacturers to rush to find alternatives to PMGs.

Searching for other options

Some companies that rely on PMGs for their wind turbines have already taken steps to avoid the problem.

In September, PMG manufacturer Boulder Wind Power engaged Molycorp - which claims to be the only U.S. supplier of rare earths, and the largest provider outside of China - to be its preferred supplier of rare earths and/or alloys for wind turbine generators.

In addition to avoiding the trade conflicts and price volatility associated with China by using a U.S.-based supplier, the company also uses permanent magnets that do not require dysprosium, a very scarce rare earth.

“By effectively solving the dysprosium supply problem for the wind turbine industry, this technology removes a major hurdle to the expansion of permanent magnet generator wind turbines across global markets,” says Mark A. Smith, Molycorp’s president and CEO.

Direct-drive wind turbine manufacturer Goldwind has taken a similar approach.

“As a result of early price increases, Goldwind began developing efficiencies and alternatives that reduce the amount of rare-earth materials required to manufacture our magnets, which, in turn, mitigates our exposure to future price fluctuations,” Colin Mahoney, spokesperson for Goldwind USA, tells NAW. “This is a scenario that we have long considered.”

Despite RIS’ somewhat negative forecast, some say the worst is over. Because companies are looking to U.S. rare-earth suppliers, such as Molycorp, instead of to China - as well as coming up with alternatives that do not involve rare earths - there is some indication that prices may come down.

In fact, a recent New York Times article claims prices have dropped significantly since August.

Goldwind’s Mahoney agrees with that assessment.

“While the price of rare-earth materials have fluctuated over the past several years, more recent trends have included a dramatic drop in the neodymium market,” he says.

Still, it is uncertain how long these prices can be maintained, as demand for rare earths is expected to soar by 2015, the RIS report notes.

By: Laura DiMugno
Source: http://www.nawindpower.com/e107_plugins/content/content.php?content.8925

Lowman: Reliant on rare earth

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 

Thirteen Exotic Elements We can’t Live Without

From indium touchscreens to hafnium-equipped moonships, the nether regions of the periodic table underpin modern technology,€“ but supplies are getting scarce

AS YOU flick the light switch in your study, an eerie europium glow illuminates your tablet computer, idling on the desk. You unlock it, casually sweeping your finger across its indium-laced touchscreen. Within seconds, pulses of information are pinging along the erbium-paved highways of the internet. Some music to accompany your surfing? No sooner thought than the Beach Boys are wafting through the neodymium magnets of your state-of-the-art headphones.

For many of us, such a scene is mundane reality. We rarely stop to think of the advances in materials that underlie our material advances. Yet almost all our personal gadgets and technological innovations have something in common: they rely on some extremely unfamiliar materials from the nether reaches of the periodic table. Even if you have never heard of the likes of hafnium, erbium or tantalum, chances are there is some not too far from where you are sitting.

You could soon be hearing much more about them, too. Demand for many of these unsung elements is soaring, so much so that it could soon outstrip supply. That’s partly down to our insatiable hunger for the latest gadgetry, but increasingly it is also being driven by the green-energy revolution. For every headphone or computer hard-drive that depends on the magnetic properties of neodymium or dysprosium, a wind turbine or motor for an electric car demands even more of the stuff. Similarly, the properties that make indium indispensable for every touchscreen make it a leading light in the next generation of solar cells.

All that means we are heading for a crunch. In its Critical Materials Strategy, published in December last year, the US Department of Energy (DoE) assessed 14 elements of specific importance to clean-energy technologies. It identified six at “critical” risk of supply disruption within the next five years: indium, and five “rare earth” elements, europium, neodymium, terbium, yttrium and dysprosium. It rates a further three - cerium, lanthanum and tellurium - as “near-critical”.

What’s the fuss?

It’s not that these elements aren’t there: by and large they make up a few parts per billion of Earth’s crust. “We just don’t know where they are,” says Murray Hitzman, an economic geologist at the Colorado School of Mines in Golden. Traditionally, these elements just haven’t been worth that much to us. Such supplies are often isolated as by-products during the mining of materials already used in vast quantities, such as aluminium, zinc and copper. Copper mining, for example, has given us more than enough tellurium, a key component of next-generation solar cells, to cover our present needs - and made it artificially cheap.

“People who are dealing with these new technologies look at the price of tellurium, say, and think, well, this isn’t so expensive so what’s the fuss?” says Robert Jaffe, a physicist at the Massachusetts Institute of Technology. He chaired a joint committee of the American Physical Society and the Materials Research Society on “Energy Critical Elements” that reported in February this year. The problem, as the report makes clear, is that the economics changes radically when demand for these materials outstrips what we can supply just by the by. “Then suddenly you have to think about mining these elements directly, as primary ores,” says Jaffe. That raises the cost dramatically - presuming we even know where to dig.

An element’s price isn’t the only problem. The rare earth group of elements, to which many of the most technologically critical belong, are generally found together in ores that also contain small amounts of radioactive elements such as thorium and uranium. In 1998, chemical processing of these ores was suspended at the only US mine for rare earth elements in Mountain Pass, California, due to environmental concerns associated with these radioactive contaminants. The mine is expected to reopen with improved safeguards later this year, but until then the world is dependent on China for nearly all its rare-earth supplies. Since 2005, China has been placing increasingly stringent limits on exports, citing demand from its own burgeoning manufacturing industries.

That means politicians hoping to wean the west off its ruinous oil dependence are in for a nasty surprise: new and greener technologies are hardly a recipe for self-sufficiency. “There is no country that has sufficient resources of all these minerals to close off trade with the rest of the world,” says Jaffe.

So what can we do? Finding more readily available materials that perform the same technological tricks is unlikely, says Karl Gschneidner, a metallurgist at the DoE’s Ames Laboratory in Iowa. Europium has been used to generate red light in televisions for almost 50 years, he says, while neodymium magnets have been around for 25. “People have been looking ever since day one to replace these things, and nobody’s done it yet.”

Others take heart from the success story of rhenium. This is probably the rarest naturally occurring element, with a concentration of just 0.7 parts per billion in Earth’s crust. Ten years ago, it was the critical ingredient in heat-resistant superalloys for gas-turbine engines in aircraft and industrial power generation. In 2006, the principal manufacturer General Electric spotted a crunch was looming and instigated both a recycling scheme to reclaim the element from old turbines, and a research programme that developed rhenium-reduced and rhenium-free superalloys.

No longer throwing these materials away is one obvious way of propping up supplies. “Tellurium ought to be regarded as more precious than gold - it is; it is rarer,” says Jaffe. Yet in many cases less than 1 per cent of these technologically critical materials ends up being recycled, according to the United Nations Environment Programme’s latest report on metal recycling, published in May.

Even if we were to dramatically improve this record, some basic geological research to find new sources of these elements is crucial - and needed fast. Technological concerns and necessary environmental and social safeguards mean it can take 15 years from the initial discovery of an ore deposit in the developed world to its commercial exploitation, says Hitzman.

Rhenium again shows how quickly the outlook can change. In 2009, miners at a copper mine in Cloncurry, Queensland, Australia, discovered a huge, high-grade rhenium seam geologically unlike anything seen before. “It could saturate the world rhenium market for a number of years - and it was found by accident,” says Hitzman.

In the end, we should thank China for its decision to restrict exports of rare earths, says Jaffe, as it has brought the issue of technologically critical elements to our attention a decade earlier than would otherwise have happened. Even so, weaning ourselves off these exotic substances will be an immense challenge - as our brief survey of some of these unsung yet indispensable elements shows.
Bibliography

US Department of Energy, Critical Materials Strategy
American Physical Society and Materials Research Society, Energy Critical Elements
US Geological Survey, Mineral Commodity Summaries

by James Mitchell Crow

Precious Metals: Is Tellurium the new Gold?

Rare Industrial - Metal - Tellurium

Gold has been spectacularly popular among investors for the past couple of years.

Silver seems to be this year’s gold.

So, what’s next year’s silver gonna be?

According to Robert Jaffe, a physicist at MIT, tellurium could be a metal investor’s best new play.

“Tellurium ought to be regarded as more precious than gold — it is; it is rarer,” he tells New Scientist magazine.

An article by James Mitchell Crow in the June, 2011 issue of New Scientist, titled “13 Exotic Elements We Can’t Live Without,” points out:

We rarely stop to think of the advances in materials that underlie our material advances. Yet almost all our personal gadgets and technological innovations have something in common: they rely on some extremely unfamiliar materials from the nether reaches of the periodic table. Even if you have never heard of the likes of hafnium, erbium or tantalum, chances are there is some not too far from where you are sitting.

You could soon be hearing much more about them, too. Demand for many of these unsung elements is soaring, so much so that it could soon outstrip supply. That’s partly down to our insatiable hunger for the latest gadgetry, but increasingly it is also being driven by the green-energy revolution. For every headphone or computer hard-drive that depends on the magnetic properties of neodymium or dysprosium, a wind turbine or motor for an electric car demands even more of the stuff. Similarly, the properties that make indium indispensable for every touchscreen make it a leading light in the next generation of solar cells.

All that means we are heading for a crunch. In its Critical Materials Strategy, published in December last year, the US Department of Energy (DoE) assessed 14 elements of specific importance to clean-energy technologies. It identified six at “critical” risk of supply disruption within the next five years: indium, and five “rare earth” elements, europium, neodymium, terbium, yttrium and dysprosium. It rates a further three - cerium, lanthanum and tellurium - as “near-critical”.

Here are the 13 elements necessary for cleantech applications that may be winners in this year’s commodities portfolio:

Neodymium

New Scientist says:

These numerous uses make for a perfect storm threatening future supplies. In its Critical Materials Strategy, which assesses elements crucial for future green-energy technologies, the US Department of Energy estimates that wind turbines and electric cars could make up 40 per cent of neodymium demand in an already overstretched market. Together with increasing demand for the element in personal electronic devices, that makes for a clear “critical” rating.

Erbium

New Scientist says:

Erbium is a crucial ingredient in the optical fibres used to transport light-encoded information around the world. These cables are remarkably good at keeping light bouncing along, easily outperforming a copper cable transporting an electrical signal. Even so, the light signal slowly fades as it racks up the kilometres, making amplification necessary.

Tellurium

New Scientist says:

In 2009, solar cells made from thin films of cadmium telluride became the first to undercut bulky silicon panels in cost per watt of electricity generating capacity.

Because the global market for the element has been minute compared with that for copper - some $100 million against over $100 billion - there has been little incentive to extract it. That will change as demand grows, but better extraction methods are expected to only double the supply, which will be nowhere near enough to cover the predicted demand if the new-style solar cells take off. The US DoE anticipates a supply shortfall by 2025.

Hafnium

Hafnium’s peerless heat resistance has taken it to the moon and back as part of the alloy used in the nozzle of rocket thrusters fitted to the Apollo lunar module. Since 2007, though, it has also been found much closer to home, in the minuscule transistors of powerful computer chips.

That’s because hafnium oxide is a highly effective electrical insulator. Compared with silicon dioxide, which is conventionally used to switch transistors on and off, it is much less likely to let unwanted currents seep through. It also switches 20 per cent faster, allowing more information to pass. This has enabled transistor size to shrink from 65 nanometres with silicon dioxide first to 45 nm and now to 32 nm.

By Justin Rohrlich June 20, 2011

US Rare Earth Public Policy Needs to Move From Studies to Actions

One of my favorite consulting slogans of all time “Analysis Paralysis”€” aptly captures the state of US public policy on rare earth metals and critical minerals (not to confuse the two). After our story last week on testimony presented to the House Committee on Natural Resources, urging the Committee to take action on a number of bills involving rare earth metals, we heard from Jeff Green, a well-known rare earth and specialty metals lobbyist. Green wanted to share some of his perceptions of current legislation and where he thinks US public policy needs to go to begin addressing some of the strategic supply constraints.

Rare Earth Stockpiling

“€œA lot of people are misperceiving what is being debated related to a stockpile”,€ Green said. “€œThe only proposal on the table involves a new version of the RESTART Act (Rare Earths Supply Chain Technology and Resources Transformation (RESTART) Act of 2011) that calls for a 250-ton inventory of rare earth alloy and rare earth magnets.”€ The concept involves creating a small vendor-managed inventory that could be drawn down in a time of war. The “stockpile” would involve the government essentially buying up capacity from one of the US mining firms, as opposed to actually taking title and inventory. This approach, according to Green, provides critical domestic demand, a key component of re-starting US industry.

An Incremental Approach€“ the RESTART Act

Another approach, one that Green favors, was offered by Rep. Mike Coffman (R-Co.) as an amendment to the Fiscal Year 2012 National Defense Authorization Act. It requires the DOD to create a Rare Earth Inventory Plan that would explore risk mitigation for those individual elements expected to be in short supply like neodymium and dysprosium.

This plan would be a follow-up to another congressionally mandated report, due to come out this summer, that essentially includes a supply and demand analysis by element for DOD. The Coffman amendment to the FY12 NDAA would require the Defense National Stockpile Center (now renamed Defense Logistics Agency Strategic Materials) to look at the elements in shorter supply and identify how the government plans on securing those elements and downstream value-added products such as metal, alloy and magnets. The amendment would only cover defense applications (not commercial), though the executive branch could take it further, should it so choose, according to Green.

Rather than try broad-brush solutions, Green suggests approving smaller incremental approaches that actually offer solutions. For example, he suggests passage of an initial bill that covers specific rare earth metals as opposed to all or other critical materials such as copper and cobalt that could quickly spin legislative action out of control.

Neodymium, Samarium, Dysprosium, Yttrium, Terbium: Good Places to Start

The “€œheavies”,€ as they are commonly referred to, present a different challenge as the US currently does not produce any of these elements.

Moreover, according to the U.S. Magnetic Materials Association (USMMA), the following defense applications remain dependent upon rare earth materials. In particular, precision-guided munitions (requiring samarium-cobalt or neodymium iron boron permanent magnets), neodymium iron boron magnets used in helicopter stealth technology, tanks and other vehicles use rare earth lasers for range finding, military communication satellites and yttria-stabilized zirconia used in “€œhot”€ sections of jet engines, according to the USMMA.

The USMMA supports legislation that “€œemphasizes production”€ to restart reliable domestic manufacturing for these key materials as well as defense-specific stockpiling for the most critical of the 17 rare earth elements via the Defense Logistics Agency.

At the end of the day, according to Green, US public policy should focus on only two initiatives:

  • Define what we are short of
  • Determine how we get it

It’€™s hard to argue with that. But with some estimates of the time needed to rebuild a rare-earth supply chain of 15 years, and a minimum of two years to create magnet facilities for sintered neodymium iron boron permanent magnets, Congress had better start acting soon.

June 7, 2011 By Lisa Reiman