The Anchor House, Inc.

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

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

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.

By Clint Cox

October 25-27 marked the third occurrence of the Conference with the longest name in the rare earth industry—Infocast’s Critical & Rare Metals Summit III:  Rare Earths Outlook: Strategies for Managing Rare Earths and Lithium Supply Risk.

The Conference couldn’t have come at a better time and place for the industry, with all of the questions and confusion over quotas, pricing, product availability, and newfound international political posturing. It was fantastic to gather and contemplate the current state of our favorite section of the periodic table – the rare earth elements (REE)!

With Washington DC as the backdrop, and about 100 participants from the government, end-users, junior exploration companies, investors, universities, and media, we began the Conference on Monday afternoon.

Although other rare metals were covered at this Conference, I will only be writing about the rare earths in the synopsis.

DAY ONE

Reka Sumangali of Lux Research spoke about solar, batteries, energy storage and wind in a talk entitled, “Global Demand Projections for Clean Energy Technologies”.  The most interesting point that she raised is that $4.5 trillion of products are dependent on rare metals (rare earths and other rare elements such as gallium, tellurium, etc.).  I’m not sure how Lux calculated this stat, but it makes for a powerful quote!  Sumangali also stated that Electric Vehicles usage will double in 5 years, but in China usage will not be as popular because China subsidizes gasoline (providing less incentive to drive an E-Vehicle.  She also described some of the challenges that each of the clean energy technologies face.

Eric Noyrez, COO of Lynas Corporation, spoke eloquently about REE prices in “Rare Earth Metals Supply & Price Outlook”. Noyrez is forecasting 2010 supply to be at 114,800 tonnes (t) with demand to weigh in at 136,100t (the shortfall here being 21,300t).  By 2014, he predicts that supply will be 169,800t while demand will be 190,100t (a difference of 20,300t). One of my favorite quotes of the Conference came from Noyrez when he stated that, “The prediction of prices is a sure way to be wrong”.

Robert Mackay, President, CEO & Director of Stans Energy Corp., presented his “Survey of Rare Earth Resources of Former USSR States”.  Mackay gave a history of Russian deposits, and spent a fair amount of time explaining his company’s plan for Kutessay II in Kyrgyzstan. He did mention that their company was the first to get a new mining license after the recent coup.

DAY TWO

Bart Gordon, US Representative and Chairman of the Committee on Science and Technology, gave the Congressional Keynote Address to kick off day two.  He explained that he had first learned of rare earth from the New York Times. He then went on to speak of the possibilities of R&D, exploration, recycling, substitution, loan guarantees, and the power of bringing people together to look at the rare earths issue – both within our country and between allies. It was an honor to have him at the event.

James Bacchus, Chairman of the Global Trade & Investment Practice Group at Greenberg Traurig, LLP; Former Chairman of the Appellate Body of the World Trade Organization (WTO); and Former Member, US Congress, followed Gordon with a riveting description of what the WTO can accomplish.  Bacchus detailed the laundry list of ways that countries engage in protectionism including tariffs, taxes, quotas, non-tarriffs and technical regulations.  He told us that there are 153 countries in the WTO and that it is a powerful tool that can directly affect change. One other point that was made was that no member of the WTO is required to exhaust their natural resources for the benefit of the world.

Diana Bauer of the Critical Metals Task Force from the US Department of Energy gave an update of the progress being made with the DOE’s Critical Metals Task Force (which, we were informed, is still finalizing the DOE’s Critical Materials Strategy).  Bauer listed the elements they are targeting as lanthanum (La), cerium (Ce), neodymium (Nd), europium (Eu), terbium (Tb), dysprosium (Dy), and yttrium (Y). Their topics for strategy include:

• Information
• Financial Incentives
• Research & Development
• Education & Training

After Bauer spoke we moved on to a series of panel discussions. The first was broadly called “International Developments”, and included brief talks from:

• Robert Mackay (Stans Energy)
• Seppo Nurmi (from the Delegation of the European Union)
• Satoru Okubo (JOGMEC)
• Atiq Sediqi (Afghanistan Ministry of Mines).

Nurmi spoke about the comprehensive raw materials strategy that the EU began looking at in 2008.  He also stated that cerium (Ce) is abundant, but that there are shortages in La, Dy, Tb, and Nd.  He stressed the need for more rules to ensure a level playing field.

Okubo elaborated briefly on the four-pronged approach that the Japanese are taking to securing REE supply moving forward:

• Exploration overseas
• Recycling
• Researching alternatives
• Stockpiling

Sediqi described rare earth-bearing carbonatite occurrences in Helmand Province and pegmatite fields in the Northeast of the Afghanistan. For more see http://www.mom.gov.af.

The next topic was “The Clean Energy Boom and Critical Metals Demand”.  The moderator was Keith Delaney from the Rare Earth Industry and Technology Association (REITA) and the panelists were:

• Edward Becker (General Motors LLC)
• James Greenberger (National Alliance for Advanced Technology Batteries)
• Taylor Robinson (Northern Power Systems)
• Michael Wozniak (General Electric Company)
• Brian Wynne (Electric Drive Transportation Association)

Delaney introduced the topic with a short presentation, and then we got various bits of info from the group.

Becker updated us on the Chevy Volt and the process for sourcing materials and parts for the vehicle.

Wozniak gave some great detail on the various forms of lighting that are both available now and those being developed.  When referring to supply issues for REEs, he did state that, “Any disruption could be critical”.  In a later discussion with Wozniak, he also stated that there are substitutes, but these are lower performing non-rare earth containing materials–customers and governments are shifting towards products with RE.

Mark Smith, CEO of Molycorp (our lunch sponsor) spoke just before lunch. He had just spent 5 days in China with senior government officials, and had a number of points to make from that trip:

• China will not completely embargo the US & EU
• Cutbacks on quotas will continue
• China is trying to eliminate illegal mining
• China is very transparent about industrial policy – they are trying to get manufacturing to move to China
• China needs technology
• Reducing the environmental footprint is a priority
• China knows that costs will go up

Smith also advocated for a cooperative relationship with China instead of an adversarial one.

Smith also listed his 7 “Imperatives for Success” for the REE industry:

1.    Diversity of supply

2.    Greater international cooperation and coordination

3.    Environmental stewardship in the production of REEs

4.    REE knowledge infrastructure needs to be rebuilt

5.    New applications for REEs

6.    Emergence of vibrant recycling industry

7.    More honesty about the basic facts of REE resources and production

I liked his quote, “Bad data breeds bad decisions”.  You can take that one to the bank!

(Part 2 will be coming this week…)

By Clint Cox

It was stated at the Technology and Rare Earth Metals for National Security and Clean Energy (TREM) Conference in Washington DC on March 17-18, that there are two modes of energy policy in Washington:

1. Complacency
2. Panic!!!

This may prove true for the rare earths as well. Please don’t misunderstand, the Conference was filled with intelligent and fantastic conversations, but the mood has changed and it is now clear that this issue is beginning to gain some favor in Washington DC.

Now for some highlights!

Dudley Kingsnorth of IMCOA had plenty of insight to share with the audience. At one point, he spoke about the importance of the pilot plant phase for rare earth exploration companies. Pilot plants are built in order to establish the flow sheet and according to Kingsnorth are required to:

• Generate samples for customer approval as basis for sales contracts
• Demonstrate technical viability
• Provide data for bankable feasibility study
• Generate data for environmental impact statement

The real shocker that Kingsnorth revealed didn’t seem to garner much fanfare, but is critical to this discussion and should change the tenor of discussion: Rest of world (ROW) demand has been lower than exports since 2005. In other words, all the hype about China shutting off the rest of the world isn’t necessarily backed by the facts. At this point, the Chinese export quotas have easily accommodated the demand by the rest of the world for material outside of China. This opens up other discussions, but may change the character of some of the arguments being made.

Constantine Karayannopoulos of Neo Material Technologies Inc. offered some great perspective as president and CEO of a company that operates facilities within China. He pointed out that China has one strategy in the rare earth business – employment growth. Provincial governments are judged on job growth.

His final points for the audience were:

• Reduce red tape
• Research & development (R&D) are indispensable

Paul Werbos, the Research Program Director of the National Science Foundation, reinforced Karayannopoulos’ last point. Werbos emphasized that R&D can have a dramatic effect, and he pointed out that new cross-disciplinary research might maximize the probability of breakthrough designs.

Gareth Hatch of Dexter Magnetic Technologies explained some of the issues surrounding new wind turbine capacity and its demand for neodymium (Nd) oxide moving forward. For instance, he pointed out that demand for Nd in wind turbines might reach 2,950 tonnes by 2013.

Peter Dent of Electron Energy Corporation stated that samarium-cobalt is a $300 million industry and that ferrites (magnets based on iron technology) still retain a 90% share of the entire market.

Sheeraz Haji of Cleantech Group LLC spoke of the revolution in financing for green technologies, as the percentage of venture capital that goes into green tech has risen from less than 2% in 2003 to a predicted 27% in 2010. Wow! That is significant. He pointed out that 72% of global cleantech investment is happening in Asia / China. This is very startling.

Haji also stated that Walmart is demanding energy usage, water usage, and waste data from suppliers.

Steven Duclos of General Electric Global Research had some fantastic perspective on REEs and strategic materials. He showed a criticality diagram which displayed the supply and price risk associated with individual elements and their potential impact on General Electric.

He is very aware of the effect of supply issues, and suggested that parallel paths must always be taken because you don’t know which path will be successful.

One of the great charts that he used showed the elements used to make incandescent lamps, fluorescent lamps, white LEDs, and White OLEDs. The surprise? No rare earths at all in the white OLEDs.

David Sandalow, the US Assistant Energy Secretary for Policy and International Affairs, had much to say regarding rare earths.

“It goes without saying that diversified sources of supply are important for any strategic material. So too are substitutes and strategies for re-use and recycling. If rare earth metals are going to play an increasing role in our economy, we need to pursue those strategies. And there’s every reason to believe that rare earth metals could play an increasing role in the global economy as the world transitions to clean energy.”

To address the availability of REEs and other strategic materials, Sandalow suggested a three-part approach:

1. Globalize supply chains for strategic materials
2. Develop substitutes
3. Promote recycling, re-use and more efficient use

He also announced the proposed development of a strategic plan:

“To help address these concerns, I am today announcing that the Department of Energy will develop its first-ever strategic plan for addressing the role of rare earth and other strategic materials in clean energy technologies. The plan will apply the approaches described above and draw on the strengths of the Department in technology innovation. We will build on work on these topics already underway, including in DOE’s national labs, and work closely with colleagues from other agencies throughout the U.S. government. We will solicit broad public input, including from the stakeholders and experts here in this room.”

Sandalow mentioned that there was lots of work underway already, and that there were no firm timelines yet in place.

His talk was well received by the audience, and we look forward to hearing more.

Full Metal Jacket, a panel discussing rare earths from the Pentagon’s perspective, addressed the complexity of assessing the both the Big Picture and specific needs. Some of the issues raised during the panel were:

• Looking at both civilian and military uses for REEs
• The DOD doesn’t buy rare earths – it buys tanks, ships, guns, etc.
• There is no national strategy on REEs thus far
• They are looking at cradle to grave issues with materials

Mark Smith of Molycorp Minerals pointed out on the producer’s panel that it is hard to find qualified people with REE skills.

Congressman Mike Coffman spoke about HR4866 – a new rare earth bill that he had just introduced the day before. From the bill:

A bill to reestablish a competitive domestic rare earths minerals production industry; a domestic rare earth processing, refining, purification, and metals production industry; a domestic rare earth metals alloying industry; and a domestic rare earth based magnet production industry and supply chain in the United States.

Many people in the audience have been watching this closely, so it was great to have Congressman Coffman talk about this with us in person.

Cindy Hurst gave a good talk on the history of China and the rare earth industry. She has written a paper entitled “China’s Rare Earth Elements Industry: What Can the West Learn?”.

We spent the afternoon of the second day in breakout sessions that were both fascinating and illuminating, as this diverse group of participants was able to discuss and debate these issues together.

Special thanks to Dr. Gal Luft and Yaron Vorona for putting together one of the best rare earths conferences I’ve been to!

By Clint Cox

My first rare earth conference of the year was an investment bank conference in Australia in Early February – since then it has been an endless barrage of rare earth conference mania!

The SME, Phoenix, February 28-March 3

The Society for Mining, Metallurgy & Exploration (SME) had three technical sessions that included the REEs—one session on March 1, and two on March 3.  At the conference, there were almost 5000 attendees and over 600 booths. The sessions were well attended, and there was also a cocktail party for the rare earth community.

Here is a brief look at the three sessions:

Geology VI: Strategic Minerals and Materials: Harder, Better, Faster, Stronger.

James Hedrick’s talk was entitled “Rare Earths in Defense Applications”.

Cheryl Seeger gave a talk about REEs Missouri called “Mineralogy and Geology of the Southeast Missouri Iron Metallogenic Province“.

Geology IV: Rare Earths: Extraction, Application and the Market.

Ed McNew presented an excellent talk on processing named, “Mineralogical Considerations in the Processing of Rare Earths Ores to Concentrates“.  This talk was chock full of images that showed quite clearly some of the issues surrounding the processing of the REEs. He also discussed many of the instruments used in identifying minerals and their critical properties for processing.

Les Heymann gave one of the best talks I have ever heard on evaluating rare earth deposits in “The Valuation of Rare Earth Deposits”.  He described the difference between Light Rare Earth Element (LREE) projects and Heavy Rare Earth Element (HREE) projects, and the issues of balance that pertain to both. He concluded that NPV is a good way to evaluate REE deposits.

Stan Trout gave a really informative talk entitled “Rare Earth Permanent Magnets: Raw Materials, Magnets and Opportunities”. Trout is one of the leading experts in the field,  but he is also a professor so he has gotten very good at communicating the complexities of the subject in a fun and very informative fashion.

Dudley Kingsnorth was unable to attend the conference, but he graciously allowed me to give his talk, “Rare Earths: Facing New Challenges in the New Decade”, in his absence.  As usual, Kingsnorth’s presentation was replete with fantastic charts—including an update of the legendary “Dudley Chart”. He also had several slides explaining the 10 steps to commercial rare earths production.

Geology V: Rare Earths: Geology & Exploration

Don Ranta presented “Exploration and Evaluation of the Bear Lodge Rare-Earth Project, Wyoming”, giving the audience a useful update on progress being made at Bear Lodge in Wyoming.

Harmen Keyser did an excellent job detailing the rare earth project at Bokan Mountain in his talk, “The Bokan Mountain REE-U Deposit, Prince of Wales Island, Alaska”.

Dr. Anthony N. Mariano gave an illuminating two-part presentation entitled “REE Deposits on a World Level – Real and Potential: Parts 1 & 2”.  In this talk he touched briefly on historic resources and minerals, as well as potential for future deposits around the world.

In addition to these sessions on REEs, there were also several other talks given on rare earths in other sessions, including two by Mark Smith of Molycorp Minerals LLC, and one by Jim Kennedy of Wings Enterprises.

A link to some of the presentations is found here:

http://www.smenet.org/rareEarthsProject/

PDAC, Toronto, March 7-10

For the first time I have been to the PDAC, the weather in Toronto was actually quite nice in March!  There were about 22,000 attendees and about 1000 exhibitors.  The size of this conference is staggering.

Two years ago I wandered the exhibit halls trying to find anyone who cared about rare earths.  I didn’t find many.  This year “rare earth” was the watchword.  What a difference!

Rare earths arrived at the PDAC in style with two cocktail parties (each attended by over 100 people), one power breakfast (standing room only), one exchange forum session, and one technical session (jam-packed, with folks waiting outside).

The number of junior exploration companies looking at this space has exploded.  Boom.  Seriously — there are now hundreds of hopefuls, but very few who know what they are doing.  Rare earth geologists (the very few that there are) are now experiencing celebrity status.

The hooplah is overshadowed by hype, but the hype is most certainly bypassed by the ballyhoo!

How long this will last is anybody’s guess, but it’s fairly entertaining for now.

More to come on the TREM in Washington—lots happened here, so I want to spend a little more time on it.

By Clint Cox

Metal Events Ltd’s “5th International Rare Earths Conference” was held in Hong Kong in November 17-19, and was attended by about 170 delegates – a new record for the event.

While the delegates engaged in lively discussion over many topics, most seemed to agree on one thing – 2009 was “the year of Rare Earths”.

It was revealed that the conference organizers had contemplated canceling the event earlier because of the questionable economy. What a difference a year makes! Rare earths are now basking in the gleaming shine of the world media, and the REE sector has become an investment darling.

The delegates were a mix of end-users, producers, processors, analysts, researchers, media, junior exploration companies, financiers, and consultants. There were people from all over the world – a testament that this conference is truly a draw for the industry.

The Excelsior Hotel, home of the 2009 Conference

Let’s get right to the luscious content:

Nicholas Curtis of Lynas Corporation threw down the gauntlet in the first talk with several dandy quotes:

“The marginal cost of production has been reached in China”

“The light rare earths are actually the ones in shortage”

“Illegal production from the south – that’s what the industry is relying on”

“Grade is king”

“You’re not looking for a rare earth project, but a bastnaesite project”

This last quote about bastnaesite begs for some context. Curtis was talking about the environmental liability of thorium and uranium (he referred to them as the “actinides” – but these are the actinides typically found with REEs). He stated that only bastnaesite had very little of the actinides, implying that this made it the premier target mineral. This is a fascinating statement, as Lynas has a supergene monazite project at Mt. Weld and a monazite project at Kangunkunde. Curtis is a compelling speaker and provides fantastic sound bites though!

Both Curtis as well as Mark Smith of Molycorp Minerals LLC (see below) emphasized the importance of environmentally sound mining practices.

Ms. Huang Xiawei of Grirem Advanced Materials Company Ltd. gave a technical, yet absorbing talk regarding processing in China entitled: “Progress of the High-Efficiency RE Extraction & Separation Technology in China”.

Mark Smith of Molycorp stated that his company’s goal was “to be the low cost producer in the world”. He gave an eloquent presentation updating the crowd on the present status and future possibilities of Mountain Pass. Two quotes from Smith:

“Ore grade is king”

“The ability to process is very, very critical and very, very complex”

Dudley Kingsnorth of IMCOA presented “Meeting demand in 2014: the critical issues”. Kingsnorth walked us through the road to commercial rare earths production, including the following steps:

1. Prove Resource/Reserve
2. Define Process – Bench Scale
3. Pre-Feasibility Study
4. Beneficiation
5. Extraction of Rare Earths
6. Separation of Individual Rare Earths
7. Obtain Project Environmental Approval(s)
8. Letters of Intent
9. Complete Bankable Feasibility Study
10. Construction and Start-up

He went into greater detail on each of these steps, and it was very informative. Two quotes from Kingsnorth:

“Each ore body is unique”

“There is a looming shortage of dysprosium, terbium, and yttrium”

Kingsnorth also pointed out that the coming climate conference in Copenhagen could have a dramatic impact on the future of the rare earth market, depending on if/what policies are decided upon.

An excellent review of the Chinese REE industry was written by Ms. Song Honghang and presented by Wang Yan of the Baotou Research Institute of Rare Earths, and was entitled “A review of the Chinese rare earths industry – the past 60 years”.  Ms. Wang gave the production tonnage of separated rare earth products from China starting in 1978 at 1000t and finishing in 2008 with 130,000t. That’s a serious increase in production!

Mick Muir of Arafura Resources gave an update on the Nolans Bore project in Australia. Muir indicated that they are targeting a 2012 production date and are seeking strategic partners.

Keith Delaney of the Rare Earth Industry & Technology Association (REITA) described how REITA wants to play a role in the juncture between government, industry, and academia. Delaney spoke about the importance of global supply chains.

Donald Ranta of Rare Element Resources gave an update of the Bear Lodge REE/gold property in Wyoming. Ranta focused on the bastnaesite-group minerals found in the oxide zone at Bear Lodge.

Don Bubar of Avalon Rare Metals gave an update on the Nechalacho (formerly known as the Lake Zone at Thor Lake). Bubar said he expects a new 43-101 resource estimate in January 2010.

Matthew James of Lynas Corporation provided a nice walk through of progress at Mt. Weld and the plant in Malaysia – including a fancy (and informative) fly through video presentation of the plant.

In a new format, five junior exploration companies were each given 10 minutes to detail their projects. Companies that presented were

• Alkane Resources (Dubbo Zirconia Project, Australia)
• Frontier Minerals Ltd. (Zandkopsdrift, South Africa)
• Greenland Minerals & Energy Ltd. (Ilimaussaq, Greenland)
• Mongol Gazar LLC (Mushgai Khugad, Mongolia)
• Rare Earth Extraction Co. Ltd. (Steenkampskraal, South Africa)

The most memorable quote (and most refreshing) from these presentations came from Trevor Blench of the Rare Earth Extraction Co.:

“We are the smallest rare earth project in the world”

Ian Chalmers of Alkane reveals actual rare earth concentrate!

Geoff Bedford of Neo Material Technologies Inc. gave an excellent description of the current status of both the rare earth market and his company. He provided fresh information regarding Neo’s purchase of Recapture Metals and their Pitinga Project in South America. He prefaced the Pitinga update by stating, “We are not miners”, and then went on to describe their collaborative efforts on the project.

In “A review of rare earth applications and innovations”, Olivier Touret of Rhodia Electronics & Catalysis furnished one of the best slides of the conference. He used an exceptional graphic to show the various kinds of hybrid vehicles, their CO2 emissions, and the additional manufacturing costs associated with each type. Touret also illustrated REE polishers. Riveting work!

Hidetaka Honyro of Iwatani Corporation gave “An overview of the Japanese rare earths industry”.  He catalogued Japanese REE demand for specific elements (especially Eu, Tb, Dy, Y, Nd, and Pr), and shared some excellent data.

Takehisa Minowa of Shin-Etsu Chemical Co. Ltd. presented a talk about neodymium (Nd) magnets. He used compelling graphics to explain the difference in strength of various types of permanent magnets – ferrite, alnico, SmCo, and NdFeB. The bottom line here was that NdFeB magnets are about 10x the strength of ferrite, but also about 10x the cost! However, if you want to save weight (which is the primary goal in many technology developments), you’ve got to go with NdFeB!

David Kennedy of Great Western Minerals Group also spoke about rare earth magnets. My favorite phrase of the day was revealed here: “residual flux density”.  Kennedy delivered superb information on the composition of magnets, as well as a description of the ability of how individual rare earth elements enhance performance.

The final talk was given by Judith Chegwidden (co-written with Robert Baylis) of Roskill Information Services Ltd.  Chegwidden addressed NiMH versus Li-ion batteries for the electrification of cars.  This is currently a hot topic, and she proved her thorough grasp of both technologies.

This conference was a great way to finish a great year in the REE market.

Please feel free to contact me through the “Contact” page if you have any questions or comments.

Special thanks to Jill Fitzgibbon and Rachel Carnac for putting together a marvelous conference!

By Clint Cox

I apologize for the delay in getting this story posted!

Let me start by saying that Infocast’s Conference held October 20-22 in Washington DC entitled “Managing Supply Chain Risks for Critical & Strategic Metals: Rare Earth Metals, Minor Metals, Platinum Group Metals, Lithium” had quite a mix of attendees — end users, government, exploration companies, media, consultants, and first nations participants. Here are some pics of the signage and venue:

Holiday Inn, Georgetown

Conference Title and Sponsors

Conference Room, it was standing room only on DAY ONE

The Conference was wide-ranging and was split into separate subject matter for each day. Rare earths were definitely a focus for the Conference, and I heard a number of perspectives that I had not heard from the podium before.

DAY ONE

There was plenty of talk regarding the stockpiling of strategic elements — both pro and con. Anthony Lipmann provided an in-depth look at the history of stockpiles, beginning with the Biblical Joseph and bringing us up to present day. Mr. Lipmann provided the following as the purpose of stockpiles:

1. Fear of resource exhaustion
2. Fear of price distortion
3. Fear of resource wars

From the above, it is clear that fear seems to be the driving force behind stockpiling. Mr. Lipmann also gave evidence that the market can negate the need for stockpiling by recycling or utilizing new mining methods, but the essence of his talk was really, “Do stockpiles work?”

Dudley Kingsnorth made an excellent point that REEs are not commodities, but that they are customer specific. He also showed a slide of the major rare earth projects of the world and when they hoped to be in production.

We also heard from Gary Billingsley (Great Western Minerals), David Kennedy (Less Common Metals — owned by Great Western), Don Bubar (Avalon Rare Metals), and Dave Hodge (Commerce Resources).

Jim Hedrick of the USGS spoke about lower cost rare earths within China because of faster permitting, no export tariffs, cheaper labor costs, and subsidized fuel. He also listed alternate sources for REEs outside of China.

Chris Hartshorn of Lux Research gave a very different view of the markets for strategic metals. One of the most interesting things he said was that there will be no pressure on lithium as a result of hybrid or electric vehicle markets. In contrast, Yaron Vorona of the International Lithium Alliance stated, “If the future is electric then the future is lithium.”

DAY TWO

Gregg Brandyberry of Wildfire Commerce (and former VP of Procurement in Global Systems and Operations, GlazoSmithKline) got us started on day two.  He spoke about supply and demand and they “take care of themselves in the long term”.  He highlighted four key issues influencing supply risk:

1. Scarcity
2. Disaster
3. Politics
4. Financial

His statement that, “There’s never been a riskier time since we’ve been alive,” was striking and seemed to resonate with the audience.  He went on to give some details regarding supply disruption, financial market collapse, corporate reputation, and  brand image.

One of his most engrossing thoughts had to do with the newfound power of NGOs (Non-Government Organizations). As NGOs focus on human rights and sustainability issues, the mining industry needs to be very aware of trends in this regard and be prepared to proactively address them.

Ed Richardson of Thomas & Skinner had my favorite risk quote of the day: “If you manage risk you are typically successful, if you don’t — you typically fail.”

Darrell Rishel of Corning spoke about engineering around rare metals if they can’t guarantee supply.  Rishel also emphasized the importance of understanding the entire supply chain for all materials used in production.

Stuart Burns of Aptium Global explained some of the evolving technologies for recycling REEs — including Prius batteries.

Jeff Green of J.A. Green & Company had an abundance of information regarding the government’s approach to the strategic metals.  He stated that, “We need a secure supply chain”, and explained this in terms of four steps:

1. Mining
2. Refining
3. Alloying
4. Manufacturing

Green also stated that the government likes to talk with groups of companies that have come together with a common cause.

Ivan Herring, former procurement expert at General Motors, said that it was 5-10 times as risky to rely on by-product production for supply.  I find this very interesting, as it shows that end-users view the market differently than exploration companies that tout by-product production on occasion.

DAY THREE

Stephen Freiman of Freiman Consulting provided a fascinating slide showing the history of the use of elements from the periodic table in computer chips.  In the 1980s, just 11 elements were used to make the delicious chips that serve our technological society.  By the 2000s the number of elements had grown to 45 — of these, 15 are rare earths!

The last panel of the morning session was about investment opportunities within the sector. Dudley Kingsnorth moderated the panel with John Kaiser, Tracy Weslosky, and Dr. Philippa Malmgren participating.

Kaiser spoke about the difficulty in evaluating REEs, and that typical mining analysts have trouble applying the discounted cash flow method to get good, relyable numbers for REE companies.  He also discussed the need to understand the difference between economic versus strategic logic.

Kingsnorth walked us through a timeline of steps that need to be undertaken for an REE exploration company.  The basic steps included proving the resource, defining the process (to get the rare earths out of the ore and into the market), and pre-feasibility.

Weslosky highlighted the need for an effective valuation method for companies pursuing the REEs.

Dr. Malmgren spoke about the broader landscape of macro economics and its possible affect on the tangible assets and the rare earth sector. Is deflation or inflation coming next? Many larger funds are looking for inflation on the horizon, she argued (quite persuasively, I might add!). They will move from paper money to hard assets. She said to get ready for increased volatility — its coming.

The afternoon session on Day Three was sparsely attended, but interesting, nonetheless.  John Kaiser and Ivan Herring each spoke at length about “Virtual Hedging”. Kaiser walked us through his 9 steps in Getting to a Mine:

1. Grassroots
2. Target Generation & Drilling
3. Discovery Delineation
4. Infill Drilling
5. Bulk Sample & Metallurgy
6. Pre-feasibility
7. Permitting, Marketing, & Feasibility
8. Construction
9. Production

Herring explained the differences between “Virtual Hedging” and “Synthetic Hedging”.  He had a number of approaches that I hadn’t heard, and some common solutions such as offtake agreements.

All-in-all, very worthwhile.  Here is my parting shot: