The Anchor House, Inc.

By Clint Cox

I have been hearing about the geological wonders of Strange Lake for years.  Peter Cashin has been very gracious in offering a trip for the past three years. Last week, everything finally fell into place.

Strange Lake is located at the yellow pin on the map:

Strange Lake is one of the most picturesque places I have ever visited. Granted, we visited during what may have been the best week of weather all year (with very few flies), but it was still fantastic! First off, let me say that Strange Lake is actually located at Lac Brisson — not “Strange Lake”.

The beautiful Lac Brisson is pictured below:

My trip actually began in Toronto with a late snack with Mehdi Azodi, the Director of Corporate and Investor Affairs for Quest. Mehdi walked me through the latest developments at Strange Lake, gave me some details regarding the site visit, and then informed me he would pick me up early and take us to the airstrip. The next morning, Quest literally rolled out the red carpet as we boarded the chartered jet for the 2 hour 20 minute flight to Goose Bay:

There were over 15 of us taking part in the site visit, so we gathered in Goose Bay to board another charter flight bound for Strange Lake. We landed 1 hour 20 minutes later on Quest’s airstrip at the edge of the B-Zone, built on the banks of Lac Brisson:

Shortly after landing we were told we could either ride to camp or take the short walk.  I opted for the walk, and was able to stroll through the B-Zone with a friendly group on the way to camp:

We had a few minutes to acclimate to camp before the safety orientation.  Quest has established an excellent camp here, with great facilities, and (most importantly) a first-class kitchen staff. Granted, I wasn’t trekking to northern Quebec for the cuisine, but the victuals shouldn’t be ignored — every meal was great, and there were plenty of wonderful surprises. From crepes and cakes to an unexpected lobster fest (!):

No one is starving at Strange Lake!

After dinner, there were presentations regarding the processing of ore from Strange Lake led by Colin Lindsay, Vice President of Operations. He spoke about possible beneficiation processes and using a solvent extraction process to remove Zr, then Nb/Ti, followed by Th/U, and finally the REEs. Processing Strange Lake ore is a very big question for me, as they are using an approach that hasn’t been used yet (to my knowledge) in the rare earth industry. Peter Cashin has invited me to see their mini pilot plant when it is up and running this fall, so that I can understand their process better. I am looking forward to that!

I then turned in early — wanting to get plenty of rest for the big day.  After breakfast the next morning we met at the coreshack for explanations of the drill program, geology, and mineralogy.

The coreshack:

While in the coreshack, we were given an explanation of Quest’s drill program as well as an excellent description of the minerals at Strange Lake. Patrick Collins and Anthony Williams Jones (aka “Willie”) led the discussions and we were able to see some kainosite (the yellowish material below)…

… as well as a host of other minerals in the core samples.

Willie explains that the kainosite and gadolinite were formed at relatively low temperatures (~100-150 C):

To add some pizzazz, the Quest team turned out the lights and showed the effect that UV light has on the various minerals:

Oooo — flashy!

At this point I was expecting a disco ball and some 1970′s jams, but we had to settle for “I Just Want to Celebrate” (by the band Rare Earth, of course) blaring from some tiny iPhone speakers. We were told that REE-bearing minerals at Strange Lake include (but are not be limited to):

• Kainosite
• Gittinsite (named for John Gittins)
• Gadolinite
• Gerenite
• Pyrochlore
• Bastnaesite
• Monazite
• Allanite
• Parasite

We spent quite a bit of time looking at core and watching Quest demonstrate the use of their Niton portable XRF. Then it was off to walk the B Zone.

As you walk toward the B Zone, you see the remnants of Iron Ore Company’s (IOC) original mining camp:

You can see the green hillside of the B Zone in the background. Curiously, the early geologists here would hike through the B Zone (which was not known as the B Zone back then) and then over the hill 3 kilometers to get to the Main Zone. All the while, the mineralized B Zone was underfoot. Kicking rocks is tough business, but with new innovation and determination, the Quest team found the B Zone. We walked up and spent quite a bit of time at the bulk sample pit on the side of the hill. We were able to collect several samples with Peter Cashin jumping into geologist mode and busting up some rocks for us. The sample below wouldn’t fit in my suitcase, but we were told that the dark mineral at the lower left was allanite:

After collecting samples, we traveled about 400 meters through gently undulating terrain to an outcrop of fluorite. The geologic significance was lost on me (and it was outside the boundaries of the B Zone), but this area is a zone of interest that Quest may come back to in the future. Here is some of the pretty purple rock (fluorite):

We then headed back for lunch.  After lunch we headed to the helipad for another safety briefing and then a quick ‘copter trip to the main zone. We look on while the 3rd group lands:

It took four chopper flights to get us all over to the main zone, so there was a few minutes for us to wander about and look at the rocks at old bulk sample pit. The main zone practically straddles the border of Labrador and Quebec, but of course you can’t see any lines out here — it looks fairly wide open to me! Peter Cashin was kind enough to show me the Quest discovery hole:

When the group was all present, the geologists described the Main Zone in detail:

When asked why IOC chose to dig here, the answer was that there was the least amount of overburden here–not that it was necessarily the richest geologically. We were able to see very clear examples of the mineral gittinsite (it is the reddish brown mineral on display in the sample below):

Four of us (led by Mehdi Azodi) thought it might be a good idea to traverse the marshy landscape back to camp. As we jumped from rock to rock, grass lump to grass lump, occasionally sinking to mid-shin in the muck, we realized that this was one of the most fun parts of the trip! Then Mehdi decided that we should race the chopper back — oof! Over a week later and I’m almost recovered!

Later that night Willie gave us his commentary on what he believes occurred to create the Strange Lake deposit. He spoke in animated brilliance about hydrothermal alteration (which he referred to as “hammering”), pegmatites, hypersolvus and subsolvus granites. Willie stated that he believes that Strange Lake may be part of the Gardar Rift Zone (part of which is now in Greenland), but that here is Canada it got “hammered”, while in Greenland it did not.

My heartfelt thanks goes to Peter Cashin (thank you for your patience), Mehdi Azodi, Colin Lindsay, Pierre Guay (for organizing the logistics on the ground), Patrick Collins, Willie Jones, and the incredible chefs!

By Terry Gatchell

Beijing, China. Rare Earths 2011, sponsored by Molycorp and organized by Metal Pages, Ltd. and the Chinese Chamber of Commerce for Metals (CCCMC) was held September 14-16 at the Sun World Dynasty Hotel. Other sponsors included Matamec, Rare Element Resources, Great Western Mineral Group, TUC Resources, Hudson Resources, and Kimberly Rare Earths. In contrast to last year’s Minor Metals and Rare Earth conference, which welcomed one hundred fifty delegates, the 2011 rare earth-exclusive event (minor metals had their own conference earlier in the week) topped 300 participants.  Nigel Tunna, managing director of Metal Pages, organized the program to address the “major issues affecting the rare earth market including Chinese policy and supply, the status of new production, recycling, new uses and the influence that the price increase has had on its consumption.”

The unifying theme again this year was the importance of the capacity of rest of world (ROW) suppliers to meet ROW demand. Since China’s crackdown on rare earth exports, the subsequent price increase has been felt in the gut of many downstream markets, and there was palpable anxiety in every conversation about the anticipation of the cost and availability of this new supply. While many agreed that the ROW will be self-sufficient in the production of light rare earths (LREE), the supply of non-Chinese heavy rare earths (HREE) remains uncertain. Important questions were also raised about the dependence of the rare earth market on the growth of green technology and how the paradoxical production of thorium and uranium can best be managed.

According to CCCMC Chairman XuXu, since last September, China has assiduously pursued the consolidation of its domestic producers from Baotou to the smallest backyard heap leaching operation. Meanwhile, China reduced its rare earth export quotas to 30,250t REO in 2010 from 65,000t REO in 2005. Citing severe competition from overseas, export duties and the “backward technology” of downstream producers, both XuXu and Li Zhong, general manager of Baotou, maintained that China is necessarily restructuring its own domestic rare earth market. Li Zhong went on to explain that resource taxes and production costs have increased while the domestic supply market is shrinking – thanks in part to new environmental restrictions. Contrary to popular wisdom, China is submitting its mining industry to new and reportedly rigorous environmental standards.  These constraints, compounded by constant pressure by the US and other WTO countries to level the economic playing field, have forced China to strategize accordingly, according to the Chinese speakers.

Dudley Kingsnorth, executive director of Industrial Minerals Company of Australia, (IMCOA) and the voice of reason to many in the industry, spoke with sobering pragmatism about the future of the non-Chinese rare earth market and opportunities for project development. Kingsnorth suggested that ROW demand in 2020 will be 80-100,000tpa REO and that Lynas and Molycorp are poised to meet this demand – at least for the LREE portion. Citing the existence of several hundred junior mining operations worldwide, Kingsnorth offered a few cardinal concepts for project development: 1) Process routes depend on the specific ore body, so comprehensive understanding of the mineralogy is critical, 2) The issues of uranium and thorium separation and disposal are necessarily huge, 3) Pilot plant studies are essential to demonstrate technical viability, generate samples for customer approval, provide data for the bankable feasibility study (BFS) and generate data for the environmental impact statement. Summing this section with a reminder that startup time can take 5-12 years and $US 1 billion, Kingsnorth quelled any premature delusions of success for burgeoning rare earth operations. Development of “a new process” could take 10-15 years and, according to IMCOA, the resulting mineral concentrate grades must be at least 30%REO LREE and/or 20%REO HREE. Given this, Kingsnorth maintained that there remain opportunities for junior mining operations to contribute to ROW supply, especially the supply of HREE.

In the race with Lynas for the lion’s share of the predicted ROW LREE market, Molycorp’s CEO Mark Smith addressed his strategies to expand, diversify, and meet its deadline to ramp up production to 19,050t by the end of 2012 and 40,000t by 2013.  Smith presented compelling evidence that Molycorp will be able to respond to changes in the market primarily by producing light rare earths more efficiently and more sustainably than the competition. Specifically, the implementation of novel, improved chemical processes and a new chlor-alkalai facility at the Mountain Pass facility, the acquisition of the Silmet facility in Sillamae, Estonia, and Molycorp Metals and Alloys in Tolleson, Arizona all give reason for its shareholders to believe in a bright future for the newly young company. Anticipating the relative dearth of dysprosium, Smith also introduced the acquisition of Boulder Wind and Power, a producer of NdFeB magnets that purportedly require no dysprosium.

In response to the demand for HREEs, George Bauk, managing director, and Robin Wilson, exploration manger of Northern Minerals described the xenotime deposits at the Browns Range and John Galt projects in Australia. A rare earth phosphate rich in yttrium and dysprosium, xenotime is paramagnetic and relatively low in radioactivity. Northern Minerals hopes to achieve concentrates greater than 40% by magnetic separation and flotation. Showing pie charts that suggest HREE yields that would complement those of shareholder and LREE-producer Lynas, Bauk predicts phase one drilling will begin by Q2 2012.

President of Advanced Materials Japan Corporation, Shigeo Nakamura described the status of the rare earth tech industry in Japan in the wake of Fukushima. According to Nakmura, the Japanese economy is growing again – sooner than expected – and to promote this growth, Advanced Materials considers nine rare earth projects (in addition to Lynas and Molycorp) as potential suppliers, including Stepnogorsk (Kazakhstan), Lugingol (Mongolia), Dong Pao (Vietnam), Hoidas Lake and Thor Lake (Canada), Greenland, Nolans Bore (Australia), Orissa (India) and Steenkampskraal (South Africa). With its tech industry so dependent on rare earths, Japan is heavily invested in developing a non-Chinese supply.

Constantine Karyannopoulos, president and CEO of Neo Materials Technologies, was on hand to indentify and dispel two myths promulgated by the media: 1) Chinese production costs are low due to environmental regulations and cheap labor. On the contrary, PRC regulations are stricter than many western jurisdictions and labor costs are a small fraction of production costs. The real reasons for low PRC production costs include the by-product economics of Baotou and the relatively simple metallurgy of processing the ionic adsorption clays. 2) Rare earths are irreplaceable, indispensable, and their prices will continue to increase. In fact, Karyannopoulos pointed out, use is a function of value, replaceability is a function of investment, effort and time, and balance is critical. He also reminded the audience that successful rare earth suppliers will possess the capacity not only to separate and concentrate the lanthanides, but will also generate a final product of the specific grade required by downstream markets.

Finally, Gary Billingsley of Great Western Minerals (GWM) shared updates on the Canadian mining company and its mine-to-market strategies for rare earths and its focus on the permanent magnet industry. In addition to its domestic exploration projects in Hoidas Lake and Douglas River in Saskatchewan, GWM is developing Steenkampkastraal in South Africa for its monazite sands as well as its excellent infrastructure, close proximity to rail and seaports, and license to store thorium. With construction of the mill and separation plant scheduled for completion by Q4 2012, GWM hopes to be in production by Q1 2013 with projected outputs of 5,000tpa REO, mostly LREE, and 3,300tpa (alloy produced). Great Western Technologies is located in Troy, Michigan and can produce a variety of alloys, including nickel metal hydride as well as permanent magnets and “super alloys” for aerospace applications. Given this, GWM may have a major stake in the revitalization of the US rare earth industry.

So as the prices of rare earth oxides have increased on average 150% since Q3 2010, the rare earth race continues, and downstream producers hang in the balance. Lynas and Molycorp have done their homework, and as the deadlines approach, the industry can only hope that they will deliver. Those with access to the crystal ball seem to concur with Kingsnorth and his “Dudley Chart,” but might we eventually need a new model – maybe one that separates the LREE from the HREE? Will green technology grow as anticipated, and how strongly does the rare earth industry depend on it? What measures can we take to make the industry as clean and efficient as the green technologies it depends on? To be sure, the successful non-Chinese rare earth suppliers have a challenging road ahead.

By Terry Gatchell

One of Santa Fe’s wind gardens and the Loretto Chapel

June 19-23 Santa Fe, New Mexico More than 200 scientists and engineers from universities and national labs around the world met at the historic Inn at Loretto for the 26^th triennial Rare Earth Research Conference (RERC) to challenge, discuss and celebrate experimental outcomes in the field of lanthanide research. As new ideas percolated among some of the best and brightest chemists, physicists and materials scientists in academia, it was difficult to fathom the lack of expertise currently felt by the rare earth industry. However, the conference agenda, which included significant participation by industry leaders, sent a clear message that efforts to bridge this gap are underway. Sponsors included Los Alamos National Laboratory, the New Mexico Consortium, ITS, and Bracco.

If anyone needed further proof of the ubiquity of rare earths, research topics spanned magnetism, solid state, organometallics and coordination chemistry, analytical, biomedical, and actinide chemistry. While the general direction of their work may not have changed with fluctuations in the industry, many researchers enjoyed a surge of interest in their work as a result of heightened awareness brought on by changes in the global market. Experts from both academia and industry offered ideas not only to improve communication but also to brainstorm ideas from across disciplines in order to bring lanthanide science and technology into a new and sustainable era.

Three rare earth rock stars (from left) Gerd Meyer, Bill Evans and John Corbett. Meyer was this year’s recipient of the Spedding Award for Outstanding Contributions to Science and Technology of the Rare Earths. Evans and Corbett were honored with the award in 2008 and 2005, respectively.

Gerd Meyer of the Universität zu Köln was presented with the Spedding Award for Outstanding Contributions to Science and Technology of the Rare Earths. One of the most decorated lanthanide scientists in the world, Meyer has conducted research in f-element solid state chemistry for more than 30 years. His current work with cluster complexes and coordination complexes illuminates previously misconceived properties of rare earth reactivity.

Spedding laureate Bill Evans from the University of California, Irvine continues to push the limits of rare earth coordination complexes as unique and powerful reducing agents. One area of Evans’ research uses rare earth metallocenes that are sterically crowded. Think of sunflowers arranged in a spherical vase – given the size of the flower and the length of the stem, there is pretty clear limit on the number that will fit comfortably. Or is there? It turns out that lanthanide metallocenes can readily adjust the length of their stems, or bonds, making them uniquely versatile and reactive. By serendipity, the Evans group also recently achieved the reduction of dinitrogen or N₂, among other small molecules that are critical in the biogeochemical cycling of nitrogen. Also known as nitrogen fixation, this process makes atmospheric N₂ available in the soil for uptake by plants and animals. It has been a bit of a mystery – one of nature’s magic tricks – that apparently occurred only under the influence of bacteria, the occasional lightning strike or the Haber-Bosch process. On the technology front, one of the reduced dinitrogen compounds, N₂^3-, can couple dysprosium ions in a single molecule magnet with record high blocking temperature, which suggests potential application in magnet miniaturization.

When asked about communicating the implications of his work to a non-scientific audience, Evans emphasized the importance of using the right vocabulary. He himself had never even used the term “rare earth” until recently. But it has been Evans’ experience that, “There is not so much a communication gap as a deficiency in contact. The industry session at the RERC was a good start. A focused meeting on the needs of the rare earth industry that academics could help with might be useful.”

Keith Delaney, executive director of the Rare Earth Industry and Trade Association (REITA)

Plenary speaker and executive director of REITA, Keith Delaney, offered a history of the rare earth industry followed by an action-oriented plan to ensure a bright future for the industry and its stakeholders. According to Delaney, the time is now for improvement in unit operations throughout rare earth technology supply chains. Yield improvements in milling, extraction, separation and refining and the rest of the downstream process is key to minimizing cost and sustaining global rare earth resources. Asserting that industry is eager for collaborations, he also described several areas “ripe for global collaboration”

1. Rebuilding our intellectual infrastructure
2. Finding substitutes for dysprosium or engineering magnets that use less
3. Reducing waste
4. Improving efficiencies in both processing and manufacturing
5. Continuing fundamental research on rare earths and their chemical and physical properties

Of course, open collaboration among industry can be a sticking point in many cases. Delaney called for transparency and candor by OEMs when conveying forecasted demand for their requirements. Comprehensive understanding of potential changes in the supply chain and the capacity to diversify accordingly were also addressed.

John Burba, Executive Vice President and Chief Technology Officer of Molycorp, Inc., outlined some of Molycorp’s thinking on environmental protection, including the prospect of using HCl and NaOH as sole process reagents and building a chlor-alkalai plant to recycle waste NaCl into other useful reagents. Molycorp is also recruiting talent and funding research at schools like the Colorado School of Mines and Worchester Polytechnic Institute. This gives future rare earth experts a head start on solving imminent issues in the industry such as efficient separation processes, wastewater and tailings disposal and recycling.

Iowa State University, arguably the birthplace of lanthanide research in the U.S., is expected to announce the establishment of a new faculty position on the science, engineering and technology of rare earth metals within the Department of Materials Science and Engineering (MSE). Karl Gschneider Jr., Anson Marston Distinguished Professor of MSE, whose research has included magnetic refrigeration, alloys and the metallurgy of rare earths, was instrumental in creating the position. Along with Richard LeSar and Vitalij Pecharsky, Gschneider should be contacted by qualified candidates.

Karl Gschneidner, Jr. of Iowa State University, 1991 Spedding award recipient and member of the National Academy of Engineering

Ana de Bettencourt-Dias conducts research in inorganic and materials chemistry at the University of Nevada Reno, specializing in the luminescence of lanthanide ions. With particular applications to bioimaging and sensing, her group’s recent work has revealed pyridine-bis(oxazoline) as a versatile family of ligands or “antennae” that, when coordinated with rare earth complexes, achieve distinctive emission of visible light. This year, she served as RERC Program Chair along with Conference Chair John Sarrao of Los Alamos National Laboratory. When asked how her expertise may dovetail with that at the MacKay School of Mines at UNR, de Bettencourt-Dias suggested that her course in lanthanide and actinide chemistry be offered, perhaps even remotely, to students across disciplines.

Ana de Bettencourt-Dias of the University of Nevada Reno served as Program Chair for this year’s conference.

Lynda Soderholm, senior chemist at Argonne National Lab, conducts research at the  Advanced Photon Source on the aqueous reactivity and transport of lanthanides and actinides in natural systems.  Using high-energy x-ray scattering (HEXS) in combination with solvent extraction experiments, she can probe the chemical form, or species, that are present in solution. This type of work is essential to the development of better technology in waste management and separations, yet some projects still fall into the dreaded “Valley of Death” – where great ideas go to die, unfunded, because they are neither pure science nor quite ready to be patented and commercialized. US Department of Energy’s Mary Neu, formerly of Los Alamos National Lab, indicated that the most pressing issue for environmental remediation remains the clean up of our nuclear weapons legacy.

In the realm of the powerfully small, Vanderbilt’s James Dickerson has been observing exciting magnetic behavior from his lead europium sulfide and europium telluride nanocrystals. The crystals, some on the order of 2 nm in diameter, are applicable in dilute magnetic semiconductors because they can form a completely miscible alloy system with tunable energy band gaps over a wide range. Dickerson has conducted this type of research at Vanderbilt for seven years with eight undergraduate, graduate and post doctoral researchers under his wing. In his lab, students learn not only how to synthesize and characterize these tiny crystals, but also to organize them into a functional monolayer using electrophoretic deposition, or EPD. With this skill set and a willingness to apply it to novel problems, his materials science and physics graduates are well trained for many positions within the rare earth industry.

So how can industry capitalize on this talent? How might we improve the collaboration between the highly cited rare earth chemist and the highly qualified operations manager? Is it possible for industry to take a cue from the academics that rely on each other to improve their science?  Time will tell, but the state of rare earth science and research suggests that we may already possess the capacity to solve some of industry’s most pressing problems.

By Clint Cox

On June 1, Molycorp held a tour for about 100 delegates from the recent Metal Pages’ Metals for Energy and Environment Conference held in Las Vegas. We all met just before lunch at the Green Valley Ranch hotel entrance, loaded up into 4 medium sized luxury-liner buses, and began eating our Panera box lunches  on the way to Mountain Pass — Yeeeee haw!

We were scheduled to have a safety briefing before touring the facilities, but it was really more of a Molycorp presentation with an extensive Q&A session.  Frankly, I was surprised that they let the Q&A go so long — the questions were getting pretty exciting towards the end. I learned a lot during this session, and I was impressed that Molycorp spent as much time answering some tough questions as they did:

They addressed their estimate of China’s cost of production being $5.58/kg — saying that it was the best numbers that they could get for an apples to apples comparison out of China. For reference, Molycorp is claiming a cost of $2.77/kg with Lynas at $10.11/kg. In the end, we will have to wait until both are in production to know the real numbers.

Molycorp answered a question about the viability of XSORBX in the marketplace when cerium was above $11/kg.

They said that Silmet (a recent Molycorp purchase in Estonia) was still receiving feedstock for their operations from Russia, but that Molycorp would be providing lanthanum precipitate concentrate, some residue, and bastnaesite concentrate.

They would not answer questions regarding their flowsheet (completely understandable).

The one question that was not answered, but that I  have now heard asked now at several venues, is “how much dysprosium and terbium will be produced?”

After the Q&A, I had a look at some of the displays in the presentation room. The first was of bastnaesite ore:

The also had a display of oxides and bastnaesite concentrate (lots of pretty colors!):

Soon it was time to throw on some hardhats, load up the buses and head out to the site!

The first stop was at the viewing platform for the pit.  They have changed the platform location since the last time I was there — it used to be on the other side of the pit (at left in the picture), but the view is still good:

We stayed there for about 10-15 minutes and had more Q&A with our Molycorp representatives as we enjoyed the breeze from atop the mighty Mountain Pass! We were told that the feedstock runs about 8-10% REO, but that areas of up to 35% REO exist. Here’s a view of the bus and our nice, shiny blue hardhats:

The next stop was a viewing platform (in the form of a flatbed truck with railings) of the freshly made processing pad:

The pad is a total of 36 acres, and will have separations, CHP (their new power plant), salt recovery and other ancillary facilities.  We were told that they will have a total of 250 mixer/settlers  onsite for their separations operation — with 180 of these being dedicated solely to didymium. Here is a picture of the building that will be refurbished to house the didymium operation:

All-in-all, it was a very worthwhile trip with plenty of Molycorp staff available for questions, and plenty of evidence that they are diligently spending their shareholders money and making some progress. I wish that we had gotten a closer view of the facilities and a walk-through of some active operations, but a hundred people milling around bumping stuff doesn’t sound like a great idea!

Special thanks to Molycorp, their staff, and Nigel Tunna and the Metal-Pages staff. It was a wonderful trip!

The return to Mountain Pass!

By Clint Cox

A number of people have requested a list of upcoming conferences in the rare earth industry.  The list below is by no means exhaustive:

Coming soon:

Asian Metal Rare Earth Summit, Pittsburgh March 14-15

For excellent coverage of rare earths and the US government:

TREM 11, Washington DC, March 22-23

For Minor Metals and Rare Earths:

MMTA’s International Minor Metals Conference, Philadelphia May 4-6

For fantastic papers on REE Research:

26th Rare Earth Research Conference, Santa Fe June 19-23

If you hear of other conferences directly involving rare earths, please let me know!

By Clint Cox

Please accept my sincere apologies for the delay in posting this year.  Regardless of my tardiness, I’d still like to give an outlook for 2011:

2011 should be a pivotal year in many respects. Let’s start with China, the key player…

China Consolidation

First of all, the Chinese are consolidating their industry, and this may mean considerable changes for the entire industry.  There might be 4-6 real winners within China, and depending on how this plays out, it will affect how the industry plays out both within and outside China. Will production be reduced? Become more efficient?  Become more environmentally friendly?  This is something to watch.

Prices Inside China vs. Outside China

There is a HUGE difference right now between prices inside and outside China.  For instance, according to Metal Pages, cerium (Ce) oxide is priced at about $6/kg (converting from RMB) inside China versus about $90/kg outside. That’s a big difference.  Many junior companies are really excited about this price differential, but keep in mind that it is a function of the export quota, and this can change very quickly.

World Economy

Anything can happen in the economy, and the world economic picture is looking fairly unstable.  There is mounting debt worldwide, and rising commodity prices in the face of large unemployment.  If the economy fails, the REE sector will suffer along with it.

Government Involvement

The Japanese government has already stepped in and decided to spread some money around the rare earth sector this year.  Will Europe follow? The US?  Other countries?

Substitution and Efficiency

The Japanese have stated that they want to substantially decrease their reliance on rare earths by trying to substitute or lessen their usage in applications.  This is a great idea, but there is always some amount of sacrifice — be it price, weight, or performance characteristics.  Also, I have heard it said from R&D folks that it is difficult to “schedule innovation”.   There will be some increased efficiency in the usage of REEs, but they will not be replaced this year.  In fact, there may be some new applications that will absorb extra supply.

Unknown Developments

This is always the big humdinger!  Last year it was the dramatic cuts by the Chinese — no one that I know saw the severity of this coming. This year it could be new projects coming on stream that were unexpected (or announcements of new projects).  It could also be further cuts or further dramatic price increases.  Will the Chinese change the rules again?  It will be a HUGE year, I think.

Thanks!

By Clint Cox

Below is my commentary on the market from our posting in January of 2010.  Following each section I give my assessment (in burgundy) of how our outlook seems to be holding up with time…

Happy New Year!

This is more of an exercise in entertainment than it will be informative.  There are so many different directions the rare earth industry could go this year that it would be foolish to make formal predictions (so please consider anything I say here very informal). Enough tip-toeing, let’s dance!

I had no idea how fast the music would play this year!  My feet don’t move that fast!

The Economy

I stated that this would be an issue last year, and I still believe that this can have a great deal of effect on the marketplace for rare earths.  If we have a repeat credit crisis or a currency crisis of any sort, the REE business may be greatly affected. It is good to look at the broader economy as the backdrop for the REEs.

The overall economy recovered (somewhat), and the REEs did the same.  The 2009 dip in the REE market now seems a distant memory…

China Export Quotas

I don’t think China will restrict export of any REEs, but I have been wrong many times before. The quotas may stay flat or go down a bit, but I think the fear of China cutting off the West is not going to happen right now.

Whoa!  China didn’t cease export of any rare earth element, but the quotas plummeted in the second half of the year, and the fear of China cutting off the West has taken a firm grip.  I botched this one!

April 1, 2010 Report

Congress will get its first formal look at the rare earths industry as they have ordered a report studying the REEs due on April Fools Day. I don’t know what the impact of this study will be (or if it will be public information). Depending on its content, and what is done with it, it may have substantial repercussions — at least in North America.

There have been substantial repercussions felt from various government reports that have been released.  The CRS, USGS, and DOE have all released reports of impact.  Legislation is underway, and it will be interesting to see where DC fits into the bigger REE puzzle.

Nonstop Rare Earth Conferences

The media attention placed on rare earths in 2009 sparked tremendous interest, and now there are a number of groups providing new, improved, or watered down ways to learn about REEs! There are some very legitimate conferences that have been around for some years, and there will be some worthwhile newcomers.  However, there is a lot of talk about being “the” rare earth conference. Here is a partial list of currently scheduled conferences (more conferences will be scheduled throughout the year):

SAIMM “Thorium & Rare Earths”, Cape Town

DMTC “2nd Annual Strategic Materials Conference”, Cleveland

SME, Phoenix (both strategic metals and rare earth sessions)

TREM “Technology & Rare Earth Metals for National Security and Clean Energy”, Washington DC

Objective Capital’s “Rare Earths, Specialty & Minor Metals Investment Summit”, London

ICRE 2010 “6th International Conference on Rare Earth Development and Application”, Beijing

Metal Events “6th International Rare Earths Conference”, Hong Kong

This list does not include conferences such as Indaba or the PDAC which will have dedicated rare earths talks or programs.

The above list represents just a trickle of rare earth conferences washing into the marketplace!  Some are certainly much better than others, and the industry is getting weary, but it is also exciting and offers plenty of opportunity for the industry to get together face to face.

The Media

Last year’s MIIT draft out of China was the catalyst that captured the media’s attention.  Since then, there has been substantial coverage of REEs in green technologies and other important applications. This is a true wildcard — I believe that the media coverage will continue, but I also believe that most stories will be ill-informed.  There has been some excellent, responsible coverage, but I anticipate more sensational journalism grabbing headlines regarding the rare earths.

Shah-baaaaam!  Media attention has truly exploded, and has become much more than a wildcard — it has become a main player.  People are reading about rare earths all over the New York Times, Wall Street Journal, Bloomberg, the Economist, and the Financial Times! It has become front page news all over!  And yes, many of the stories are ill-informed, but there are some excellent journalists out there trying to get the story right.

The Development of Sichuan

Most of the talk surrounding the LREE in China revolves around Bayan Obo and Baotou.  However, the Jiangxi Copper Group has made it clear that they will be developing the Maoniuping deposit in Sichuan (also referred to sometimes as “Mianning”). Jiangxi Copper will be spending hundreds of millions of dollars to develop the site, and it is unclear what impact it will have on the market. This should be followed closely, as they have a substantial deposit of rare earths.

Not much has been said here.  Jiangxi Copper is definitely a player here, and there will probably be some serious production, but there hasn’t been a lot of news directly regarding this.

New Projects

When I began covering this industry there were only a handful of junior exploration companies that would claim that they had anything to do with rare earth.  Now there are well over 100.  There will be new projects coming to light in 2010, and we look forward to some surprises.

In March 2010 alone (mostly coinciding with the PDAC) we added over 50 projects to our database!  Yikes!  The number of new projects is staggering, but was predicted by those who know the junior exploration market much better than myself.

IPO Fest?

There may be several players coming into the public market in 2010 — some of these may be significant. Let’s watch and see if this pans out, and how much money they raise.

IPO Fever!  A number of companies had IPOs, but the splashiest by far was Molycorp.  They timed the market almost perfectly (going public around the time of the Chinese quota cut), and have risen steadily throughout 2010.  Several others went public as well, with quite a few cued up for 2011.

The Unknown

Ah! Saved the best for last. There will be unknown events in 2010 that will undoubtedly rock the rare earth market. We will watch with eyes wide open, but we will certainly be surprised like everyone else!

Big quota reduction.  Questions about exports.  Media explosion.  There were plenty of surprises!!!

More to come in early January with our Outlook 2011!

I met Dr. Chen Zhanheng at the recent Metal Events Ltd. and Roskill’s Rare Earths Conference in Hong Kong.  Dr. Chen Zhanheng has been with the Chinese Society of Rare Earths for 18 years, and is in charge of Science exchange and consulting services.  He has published on a number of topics in the rare earths sphere, including (but not limited to):

• The REE market
• Thermodynamic properties of LaCrO₃
• Nanocrystalline Powders
• New REE materials and their applications

Dr. Chen Zhanheng was kind enough to answer some questions that I submitted to him, and he agreed that I could post them here.  He has been extremely gracious with his time and I extend my sincere thanks to him!

Please enjoy, as he provides some interesting insight into a variety of topics. Here is the written interview:

Where did you receive your education?

1985-1989 University of Science and Technology Beijing, Bachelor Degree;

1989-1992 Graduate School, University of Science and Technology Beijing, Master Degree;

2002-2008 Graduate School, University of Science and Technology Beijing, PhD.

Was there a particular person or project that was pivotal in your studies?

Sure, there are many persons affecting my studies, all kinds of medium and experts illuminating my thinking space. As I said at the Hong Kong conference, to study rare earth resources, market, environment and application all are my personal interests. Not any project, but the fantastic advanced rare earth materials related hi-tech attracted me.

How important is the study of rare earths?

Techniques with rare earths have permeated our everyday life, such as consumer electronics, new energy technique and defense system, though most of the people don’t know what rare earths are.

What has been the biggest surprise in your study of the REEs?

The biggest surprise is that China enterprises were left far behind those development countries in design and development of end products. Many capitals were invested in resource industries.

The Chinese Society of Rare Earths is very important in China.  What role does it play in the Chinese Rare Earth industry?

It consists of many rare earth experts; they are the most important intellect resources to support the development of the Chinese Rare Earth Industry. CSRE is just an academic organization; it could provide the government with some macroscopic and constructive recommendation on rare earth science and technology, and also rare earth industry, but does not set any policies, has no rights.

How many members does the Chinese Society of Rare Earths have?

More than 3000 members, including 160 advanced members, and 60 of them are the core members.

How important are the rare earths to China?

China once was proud of its rare earth resources—the biggest one. But the application was left behind.

China is planning to develop 7 new strategy industries, such as electric vehicles, wind powder, energy saving industry as you know, all the seven strategy industries are related to rare earth materials, I think. In fact, in hi-tech industry, the whole world is involved in rare earth materials. So not only to China, but the whole world, rare earths are very important. So I myself strongly recommend establishing a stable multi-supply system.

If China wants to transform the resource growth economies to the technique growth economies like Japan as soon as possible, there are still a long time to go, may be 10, 20, 30….years.

What are the hopes for the rare earths industry in China for the next 5 years?

I hope after consolidation and strict environment management, the industry could recover from disordered development to a reasonable style, the environment and the polluted area are improved greatly, and regional rare earth economies are well established.

How closely do you follow rare earth events outside of China?

I am not that close to rare earth events out of China, for my personal ability and knowledge limitation.

Do you think any new rare earth mines will be opened in China over the next five years?

No new exploitation could be allowed.

Are many Chinese companies looking at rare earth projects outside of China?

No, maybe there is, but I do not know.

How many rare earth research centers are there in China?

Almost all science and technology universities and institutes are related to rare earths, as to the biggest and the most professional, 7-10 I think.

What were the key role, support and programs of the Chinese Government that allowed the rare earth industry to become so successful?

The government paid great attention in rare earth exploration, exploitation, separation and smelting, and provided with huge financial support from basic research to application, and promoted the development and application of rare earth advanced materials.

The rare earth industry in China is really not that successful in my mind, the environment was damaged, the valued resources were wasted and did not create the due value.  I think that it is the basis of science and technology, industry and humanity in China limited its development.

What are some of the misconceptions about China’s rare earth industry?

To describe that China develop rare earth industry is a carefully planned scheme, to make it a political issue and to buzz that China rare earth supply cuts threatened USA defense security.

I am personally against voices of parochial nationalism and extreme patriotism in China. The world should eliminate the politicalized trend on rare earth issue.

What possibilities do you see unfolding in rare earth research over the next decade?

A great progress in application especially on new energy industries will be promoted by the developed and developing countries.  For research, a diversity of advanced rare earth materials will be developed and applied in green technologies.

What is the most exciting thing going on in rare earths today?

The most exciting thing is the application of rare earths will be highly needed in new energy technology, such as EV or HEV, wind powder and an effort to establish a multi-supply system worldwide to avoid China “monopoly” on rare earth supply—but some China rare earth enterprises may not be that happy.

Are you surprised by the worldwide attention that the rare earths have received over the last year?

In fact, I am not that surprised like Ms. Judith [Judith Chegwidden of Roskill, who spoke at the recent conference in Hong Kong], because I know the importance of rare earths to modern hi-tech industry. All of us are benefitting from techniques with rare earths. The problem is that how can our human beings live together in peace.

What advice would you offer to a young engineer or scientist who is interested in the rare earths?

Never give up study, keep curiosity and progressive spirit, and respect the existence value of others.

Thank You, Dr. Chen Zhanheng!

By Clint Cox

Rare earth element (REE) conferences have become so commonplace that it has been said that the people making the most money in this industry are the conference organizers.  While it may be true that there are a number of events trying to lure the rare earth crowd, the undisputed industry event of the year is the Metal Events Ltd and Roskill’s Rare Earths Conference in Hong Kong, which set a new record for attendance at over 250!  Hong Kong is a spectacular backdrop to the event held over 3 days, 9-11 November 2010.

This year’s event was held on the Kowloon side at the Shangri-La.  The accommodations were great, and the buzz was fantastic, as over 250 delegates gathered and mingled to hear presentations, reminisce with old friends, give quotes to the media, and exchange business cards with new contacts.

DAY ONE
One of my favorite features from hotels in China is the Midnight changing of the elevator carpet!  I arrived on Sunday, but the event began Tuesday night with a cocktail reception in the basement of the Shangri-La.  No big speeches or presentations, just cocktail chit-chat and lots of rare earth back and forth banter.  I called it an early night so that I could pace myself for a busy three days!

DAY TWO

The next morning, Rachel Carnac of Metal Events Ltd., convened the conference and immediately turned the stage over two of the industries most prominent voices: Judith Chegwidden of Roskill Information Services and Dudley Kingsnorth of Industrial Minerals Company of Australia (IMCOA).  They had plenty to say, and here are some of the highlights:

• The 120-150 REE companies in China will be reduced to 20-30
• Polishing use has increased faster than anticipated
• REE growth forecast has been reduced to 6-10% per annum for next 5 years
• Multiple announcements by the Chinese has created uncertainty
• There is predicted to be a shortage in 2015 of:

o   neodymium (Nd)

o   europium (Eu)

o   terbium (Tb)

o   dysprosium (Dy)

• The only new projects onstream by 2015 will be

o   Molycorp

o   Lynas

o   Alkane

o   Japanese projects

Kingsnorth and Chegwidden did a splendid job of kicking off the conference!

Nicholas Curtis of Lynas Corporation spoke next, giving a highly anticipated update on the Mount Weld project entitled, “Lynas: Online in 2011 Delivering Rare Earths Globally”. He began by speaking of the media attention that the industry has received lately saying, “We are no longer an esoteric club – we are mainstream”.  He also called for the formation of a global industry association. He spoke about expanding operations and volumes in what he deemed “phase 2”, for which the engineering is already substantially done.  Another good quote from Curtis was, “This is not a commodity industry, this is a chemical industry”.

Next up was Mark Smith of Molycorp declaring the “Mine-to-magnets project is on time and on budget”.  They plan to produce lanthanum (La), cerium (Ce), praseodymium (Pr), Nd, samarium (Sm), Eu, gadolinium (Gd), Tb, and Dy by 2012.  With REEs becoming a political hot button lately, Smith said that he recently spent 10 days educating the White House and State Department.  Smith mentioned what it would take to usher in what he called the “Golden Era of Rare Earths”:

1.    Greater diversity of REE supply

2.    Greater international cooperation

3.    Advances in environmental technologies

4.    New & innovative uses for rare earths

5.    Emergence of rare earth recycling

6.    Greater transparency & honesty from our industry

And that was the end of the power-packed first session.

Here is a view of the venue between sessions:

Gary Ragan of Albemarle Corp. gave a talk about fluid cracking catalysts (FCC) catalysts that I found captivating.  In his words, “The idea is more gasoline out of a barrel of oil”. He gave the history of FCC, beginning with the development of the industry in Baton Rouge in 1942.  He showed a chart with the various technologies used over time and what they have added in terms of efficiency.  He also did a wonderful job graphically displaying how it all works. La & Ce (as well as some others) are the principal elements in use. He addressed the recent quota cuts and its affect on the FCC industry saying that substitution may happen more quickly now, but “We can’t schedule a breakthrough”.

Patrick Chang of BASF further explored catalysis in his “Rare Earths: Strategic Raw Materials for Catalyst Aplications”.  He stated that about 20% of the REE market is catalysts (this extends beyond FCC to autocatalysts as well).  He built on Ragan’s previous FCC talk, stating that La provides thermal stability and selectivity to the fluid cracking process.  Also, in regards to mobile emissions, the key REE ingredients are La, Ce, Pr, and Nd (this is in addition to the platinum group metals, or PGMs).  The startling statistic of day goes to Chang with this tasty bit: “It would take 100 of today’s cars to equal the pollution from 1 pre-1974 car”. Wow!  That’s some serious reduction!

Dimitri Psaras of Neo Material Technologies Inc. illuminated a process that I have always wondered about, but never come close to understanding – customizing materials for end-users of the rare earths.  His talk was entitled, “Development of Value Added Products: Differentiation Between Common and Performance Materials”.  He described how the structure of a molecule can depend on the chemistry applied, and that crystalline characteristics make a BIG difference. In other words, all oxides are NOT created equal – different customers require different molecules to meet their needs.  Then he started talking about quantum dots… I’m going to have to learn more about that before I write about it!  Kudos to Psaras, he really took us one step closer to understanding a complex (and often untold) part of the industry.

Unfortunately, the next speaker, Professor Zhou of the Baotou Research Institute of Rare Earths, was unable to attend, but Yan Wang gave his talk—“Magnetic Refrigeration Technology”—for him.  Ms. Yan stated in the talk that, “NdFeB is an optimal magnetic field for magnetic refrigeration.  Development of magnetic refrigeration materials needs Gd, La, Tb and Er metals”.  Countries that are currently pursuing this technology include:

• USA
• Japan
• China
• France
• Canada
• Switzerland
• Denmark
• Brazil
• Spain
• Italy
• Korea
• Russia
• Slovenia

That’s quite a list!

Anton Manych of Summit Atom Rare Earth Company (Sareco) spoke after lunch about “Sumitomo’s New Rare Earth Project in Kazakhstan”.  Sareco hopes to be producing 15,000 tonnes per annum (tpa) of REO by 2015.  The source feedstock is a combination of uranium (U) ore raffinates and monazite. Lots of work still needs to be done.

Robert Mackay of Stans Energy Corp. gave a similar speech to the one he gave in DC a few weeks ago about rare earths in Russia and the CIS countries (see my posting from that conference).

James Kenny of Frontier Minerals Limited spoke about their carbonatite project, Zandkopsdrift, in South Africa.

Jim Engdahl of Great Western Minerals Group and Trevor Blench of Rare Earth Extraction Co., Ltd. spoke about the South African project called Steenkampskraal.  They predicted production by 2013 from monazite, and they say they are licensed to store the thorium (Th) underground.

Damien Krebs of Greenland Minerals & Energy described their project in Greenland. He spoke a bit about Greenland reviewing its uranium (U) policy, as the project has U that falls under the policy. Krebs also related information about the project’s metallurgy.

As shot of the night market in Hong Kong:

But we returned to business the next day for the finale…

DAY THREE

David O’Brock of AS Silmet did a terrific job of detailing the rare earth separations operations in Estonia.  He began by chronicling the journey of the rare earth-bearing mineral loparite from the mine in Russia, to Solikamsk, and then to Estonia.  He made the point that facilities are important, but “If you don’t have skilled people, they’re just buildings”.

One of the highlights of the Conference was the presentation by Dr. Zhanheng Chen of the Chinese Society of Rare Earths.  He gave a frank and elucidating talk about the state of the rare earth industry in China.  He showed the environmental issues surrounding mining operations in the north at the tailings pond outside Baotou, as well as pollution problems in the south with the ion adsorption clays. The need for consolidation was also explained.

Next up was Yasushi Watanabe of Institute for Geo-Resources & Environment, AIST speaking about “Japan’s Search for Alternative Rare Earths Supplies”. He explained the current status of the development of resources outside China that were being pursued by various Japanese entities, including:

• Dong Pao (Vietnam)
• Tailings of uranium deposits (Kazakhstan)
• Pitinga (Brazil)
• Indian placer (India)
• Grass-roots exploration by JOGMEC
  • Ytterby (Canada)
  • Benson (USA)
  • Laocai (Vietnam)
  • Mabel Creek (Australia), etc.

Another interesting statement he made was that, “we will not need as much dysprosium in the future”.

Professor Weidong Zhuang of Grirem Advanced Materials Co. Ltd. talked about the “Developments & Outlook for the Chinese Luminescent Materials Market”.  This was one of the most thorough talks I have heard on luminescent materials – much of it was way beyond my comprehension, but very informative (and nice pictures!).

Olivier Touret of Rhodia Rare Earths System has given some excellent talks in the past, and this was no exception.  He gave “An Overview of Applications for Rare Earths”.  He listed the 4 driving markets for REEs as:

1. Auto Catalysts
2. Phosphors
3. Magnets
4. Polishing

Regarding the Chinese export quotas he stated, “It is not a surprise – it will continue”. He emphasized that balance in the REE market is critical.

Greg Kroll of Magnequench Neo Powders Pty. Ltd. gave the final talk about “Bonded NdFeB Magnets: Technical Developments & New Apllication Growth”.  He gave a brief history, explained Neo powders, and heralded the advantages of weight and size reduction in many applications.  He also defined the delineated some of the differences between bonded and sintered magnets. The bonded magnet business is currently about 1/10^th the size of the sintered magnet market.

The Shangri-La, Kowloon:

It was a fantastic week, and well worth the time to be there!

Special thanks to Rachel, Jill, Judith and all those involved in putting the conference together!