The Anchor House, Inc.

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!

By Clint Cox

Continued…

DAY TWO (After Lunch)

Pierre Neatby of Avalon Rare Metals shared his thoughts on the supply chain by stating:

• China wants to grow downstream manufacturing
• Japan is the key player and China’s largest REE customer
• 100s of REE exploration companies out there
• Only 4-6 REE properties will come to production (2-3 will be HREE)
• There is no separation capacity in North America

Michael Haueisen of Osram Sylvaia spoke of europium (Eu) and terbium (Tb) being their critical elements in some lighting products.  He also mentioned that Osram will be making more phosphor in China.

Jim Kennedy of Wings Iron Ore, Inc. discussed a cooperative-style approach to refining rare earths in the United States, using grain cooperatives as a model with centralized facilities.

Alastair Neill of Dacha Capital said that Dacha is focused on holding physical REEs.  He also alerted the audience that, “The Chinese have woken up to what power they can yield”.

Shuk Rashidi of Tridus Magnets stressed the importance of “Balance, balance, balance” in the rare earth marketplace (referring to keeping supply and demand in balance for each of the individual elements).

Tracy Weslosky of Pro-Edge Consultants moderated the next panel entitled, “Equity and Investment Banking Perspectives on Opportunities in the Rare Metals Value Chain”.  This is a hot topic, as ever-increasing amounts of capital are flowing into the sector for investment.

Byron King of Agora Financial, LLC proclaimed that he would rather take a medium-good ore body with good management over a great ore body with bad management.  He also said that investors want REE companies, so that’s what they are being given.

Jon Hykawy of Byron Capital Markets gave his 3 criteria for evaluating a rare earth project:

1.    In situ grade—higher the better

2.    Mineralogy—can you extract it economically?

3.    Location

Hykawy also stated emphatically that rare earths are “in a bubble”.

Patrick Pittaway of URAM SA compared today’s REE market to that of the uranium (U) market of 2004.  He also stated that only 4 or 5 REE companies will get to production.

DAY THREE

Wednesday morning started with a fantastic panel called, “Technology Options in Addressing Rare Metals Supply Challenges” moderated by King.

Steven Duclos of GE Global Research placed one of the best charts I’ve seen on the screen for his discussion of supply chain issues.  The x-axis contained three columns labeled “Sourcing”, “Manufacturing”, and “Engineering/R&D”.  Under sourcing he had methods such as diversification and hedging; under manufacturing he listed options such as use of recycled materials and minimizing use of at-risk materials; and under engineering/R&D he had items like material substitution and designing for ease of recycling.

Peter Dent of Electron Energy Corporation shared some great perspective on the magnet market.  He mentioned that the Japanese are doing a lot of research on technology to reduce the use of dysprosium (Dy) in NdFeB magnets.  His most salient point was that his company has an extremely difficult time finding qualified technicians and engineers who are from the USA.

Gareth Hatch of Technology Metals Research, LLC had some great quotes.  Even though it has become increasingly clear that the US has lost some of it’s dominance in the REE space, Hatch stated that “There are pockets of excellence in the United States” and that “It’s not so much the money, as the right people that matters”.  I’d say he’s on to something there!  He also briefly touched on the disconnect between the academic and industrial communities.

Keith Delaney of Rare Earth Industry and Technology Association (REITA) gave a comprehensive talk labeled, “Challenges Facing New Global Rare Earth Separations Plants”, in which he described both supply chain issues and the difficulties in solving technical and commercial issues in a viable way.

In the last set of presentations Yaron Vorona of the IAGS TREM Center gave an overview REEs in Defense applications, and reminded the audience that the Department of Defense REE survey is due out soon.

Jeffery Green of J.A. Green & Company gave the final presentation of the conference (and it was excellent and very well received). He helped the audience to understand how Washington works, and how the rare earths have been perceived and approached by the various agencies in DC.

Overall, it was an exceptional conference, especially for hallway conversations and the presence of industry players, government groups, analysts, and junior exploration companies.