The Anchor House, Inc.

By Clint Cox

It’s late at night and you’re sitting in front of your computer wondering what you can do to expand your brain.  Go to the US Patent Office and look up really cool inventions! Search by keyword. A friend of mine got me started on this.  Of course, I chose keywords related to rare earth and found some pretty cool stuff:

Super Shiny Stripes on the Street

Marvelous Microspheres! Rare earths are really coming to light — and reflecting it back to you! Courtesy of 3M, we have reflective pavement marking from Patent #5,853,851:

Another desirable component of the glass compositions of the present invention is a rare-earth metal oxide, such as La.sub.2 O.sub.3. Lanthanum oxide (La.sub.2 O.sub.3), for example, promotes glass formation, aids in melting, and helps raise the refractive index while not deleteriously affecting the acid resistance or crush strength.

Tiny lanthanum microspheres — coming to brighten a street near you?

Goodbye Kidney Stones?

I have heard that kidney stones are excruciatingly painful.  I am a big fan of relieving pain, so I bring you Patent #7,192,609:

This invention relates to a method of preventing or treating urolithiasis (kidney stone disease) by administering rare earth salts, e.g., Lanthanum salts, to bind dietary oxalate and preventing its absorption into the gastrointestinal tract.

Rare earths are known to have a variety of medical uses, but this is the first time I had seen a description of this patent.

Go-go Golf Balls

The merits of neodymium for use in magnets is well known, but who knew that we could smack the neo down the fairway? The Callaway Golf Company is employing the merits of rare earths in Patent #6,739,985:

Golf ball cores formed from blends of neodymium and cobalt synthesized high molecular weight butadiene rubber

I am under no illusions that rare earths will provide the solution to my hideous golf game, but I am glad to know that golfers may be getting better with a little help from neodymium!

By Clint Cox

How well do we truly understand risk in the rare earth market? Most people who invest in the mining sector understand that there are risks inherent with mining operations.  These risks include (but are not limited to):

•    country—will that dictator really allow you to take all those diamonds out of his country?
•    pricing—will rhodium be $10,000 or $500 when that mine gets to production?
•    environmental—will the mess the last company left be the new company’s responsibility?
•    management—is the management really hoping to find gold bricks while sitting on the beach in Tahiti?

Mining is extremely risky, and for junior exploration companies to find “the next big one” is like looking for a sweetpea painted silver in a ball bearing shop.  As risky as mining is, in general, I would like to argue that the Rare Earth sector has its own special set of risks.

The risks are not confined to this list, but these provide a starting point:

1.    Competition. The Chinese are blessed with great resources and focus. The market tends to look at the junior exploration companies listed in Australia and Canada as the great hope for REEs outside of China. But don’t forget the big players that aren’t junior exploration companies.  There are private companies and interested parties from the top to the bottom of the supply chain. For example, recent press releases have shown that the Japanese (such as Toyota, Mitsubishi, JOGMEC and others) are looking for resources. These are players that intimately understand the market and its future requirements.

2.    The Numbers. Rare earths are quantified in a variety of ways: %REO, ppm, element distribution, % Heavies versus Lights, % recoveries, $ of rock in the ground, etc.  Some of these numbers are important, and some mislead. Some of the most important numbers are rarely available to investors! It is difficult to understand the absolute truth about what the numbers tell us. Just when I think I comprehend an answer – another snafu appears. Don’t be complacent with the numbers. Know that you know that you know.

3.    Experts. There are a lot of new “experts” emerging in the rare earth industry! The number of qualified experts in this field is small. There are some great geologists out there – but just a very small handful that have the expertise to claim that they specialize in this. Be sure that the expert whom you are banking on has the proper credentials and context necessary to speak the truth about rare earths. Remember – assay results alone don’t make experts!

4.    Whiplash. The day the NdFeB magnet was revealed, the market was rocked dramatically. The South China ion adsorption clays stunned the geos who thought you had to have significant %REO. The United States used to dominate this market.  Buckle your 5-point harness and put on your helmet! This market can be reshaped so fast that the cutting edge becomes dull and obsolete almost overnight. (If I’m mixing my metaphors, it’s only because this market is so perplexing!) What we think about the realities of this complex market today will undoubtedly be transformed by tomorrow.

The picture of the week: Rare earth metals oxidizing for your viewing pleasure:

By Clint Cox

1.  Rare Earth Elements (REE) come as a by-product from Bayan Obo iron ore operations. The rare earths are so plentiful at Bayan Obo, that until recently, they only recovered a fraction of the REEs.  This makes mining the REEs relatively cheap — as long as they mine iron ore, they will have REEs. Approximately 50% of the world’s total rare earth production comes from Bayan Obo. Also key is that bastnaesite is a rare earth mineral with a high theoretical 75% REO.

Bayan Obo Bastnaesite

2.  The South China Clays are unique. These clays have fantastic rare earth distributions that are intensely skewed toward the heavy rare earths (HREEs), and are the main supplier of HREEs to the world market.  They have a very low REO% but they are able to be processed very cheaply with a relatively low degree of technology.  They are, however, faced with the challenge of preserving these resources while providing needed material to the marketplace — these are not limitless resources by any means.

3.  The Chinese are focused. Baotou alone has over 20,000 workers dedicated to the rare earth industry in one form or another.  Regional government agencies, as well as Beijing, are well aware of REEs as a strategic resource.  Research takes place in a methodical manner, and rare earth resources are managed on multiple levels.  The Chinese have specific, long-range plans to develop their rare earth sector, and there is a system of licenses, tariffs and export quotas in place to help protect the Chinese REE industry.  They have implemented a number of incentives to attract foreign investment.  In addition, the Chinese are very aware of developments outside China and have proven willing to participate beyond their borders.

Small portion of scale model of Rare Earth Development Zone in Baotou

By Clint Cox

I am often asked for additional websites or resources that people can use to further understand the REEs.  In light of this, I would like to include a few links to some sites and books that may be helpful as a starting base for additonal rare earth research.  Some of the readers of this site may already be familar with these resources, so I apologize for the redundancy, but I hope to provide more resources in the future as well.

A good starting point is the US Geological Survey. Jim Hedrick has done some excellent work over his career at the USGS and his papers and charts are often quoted and used:

More at the USGS

An excellent overview by Hedrick and Stephen B. Castor can be found in Industrial Minerals & Rocks: Commodities, Markets, and Uses, 7th Edition published in 2006 and edited by Jessica Elzea Kogel, Nikhil C. Trivedi, James M. Barker, Stanley T. Krukowsk. The chapter can be found in PDF format at the bottom of the page at:

Castor & Hedrick

I have recently recommended “A Lanthanide Lanthology” by Barry T. Kilbourn — this is published by Molycorp and comes in two parts — Part 1, A-L and Part 2, M-Z.  It can be found in PDF format (scroll to the bottom of the page) at the following link:

Lanthanide Lanthology

A nice, quick read with good-looking pictures is The Lanthanides by Richard Beatty.  This a very short, basic book, but it is easily accessible — which can be a big plus for this complex topic! More can be found at:

The Lanthanides

And finally, a tough to find book with a great history of rare earths section, The Rare Earth Elements by D.N. Trifonov (translated and published in 1963 by Pergamon Press). Quite a bit of it is outdated, but the history and basics are a great read (if you’re into rare earths, of course!). More info is here — but it is hard to find:

The Rare-Earth Elements by Trifonov

That’s it for this week, but let me leave you with a picture. This is Über-instrumentation from the University of Manitoba — a SIMS (Secondary Ion Mass Spectrometry):

By Clint Cox

Rare Earth a “No Show” at WTO!

By Clint Cox

There are many ways to measure the abundance of the elements. We can look at the universe, the solar system, the sun, the moon, the seawater, even the backyard of a guy I know!

For example, the moon has a large amount of REEs.  According to G. Jeffrey Taylor:

The Procellarum KREEP Terrane (PKT) dominates the nearside of the Moon. “KREEP” is an acronym for lunar rocks that are high in potassium (K), rare earth elements (REE), and phosphorous (P).

It’s difficult to see the REEs from here!

The article is quite interesting and provides some compelling info about rare earths on the moon, but we may be getting (decades?) ahead of ourselves here. Let’s dig a little closer to home.

Let’s focus on the earth’s crust (called “crustal abundance”) because that is where we find all of the good stuff that we scoop up and transform into the latest improvements that we refer to as our “standard of living”.

Thulium (Tm) is the rarest of the rare earths.  There is less than one hundredth of the amount of thulium in the earth’s crust as cerium (Ce).  For those of you out there who are big fans of parts per million (ppm), Tm clocks in at approximately o.5 ppm while Ce achieves about 66 ppm.  As a whole, the REEs total about 220 ppm in the earth’s crust.

Thulium and Cerium in metal form — vacuum sealed to avoid oxidation!

When rare earth oxide (REO) is expressed as a percentage, such as 3.5% REO, this can be converted to 35,000 ppm. This offers some guidance when looking at exploration companies that have difficulty attaining the crustal abundance of 220 ppm. But please remember, there is more to a potential rare earth project than just the ppm (as explained below)!

Now for some comparative perspective.  Thulium — as rare as it is — is more abundant than silver or gold.  Cerium is more common than lead or tin, and about even with copper in the earth’s crust. So why the hoopla?  A LOT of copper has been mined over the years.  And people just don’t seem to get as excited over those new lead discoveries as they used to. If rare earths are everywhere, do they deserve to be deemed “Rare”? I think so, for one simple reason: It is rare to find an economic “Rare Earth” deposit.

I won’t get into what makes an economic deposit here, but it is exceedingly difficult to find the right concentration of the right REE mineral with the right element distribution in the right location with the right metallurgy and the right market balance at the right time. Yikes!  That sounds pretty tough to find, and it is!

10… 9… 8… 7… 6… 5… 4… 3…

References

Lide, D.R. (1997) Abundance of elements in the earth’s crust and sea, CRC Handbook of Physics and Chemistry, 78th edn., CRC Press Boca Raton, Florida.

By Clint Cox

All rare earth minerals are not created equal.

Some have a light rare earth (LREE) distribution of elements, some are more heavy rare earth (HREE) laden.  Some are carbonates, some are silicates, or phosphates.  Some have a high percentage of REEs within the mineral, some do not.  Some have been processed, and some have not.  And — quite frankly — some are pretty, and some are not.

This week we’ll focus on the lightweight (LREE) division of the rare earth world, and start with the creaky past champion, now sprawled on the sidelines hoping for another shot at the title: monazite.

Monazite

Monazite used to rule the market, being readily available in placer deposits around the world — from the United States, to Australia, India, and beyond.  Here is a shot of some monazite from a placer deposit:

Monazite is a phosphate mineral mostly enriched in the LREE, and has a theoretical REO% of just under 70% (which means that if you have monazite, you may have up to 70% rare earths in the mineral).  However, even monazites may vary wildly, with some having elevated levels of neodymium (Nd) or other elements. One of the current drawbacks to monazite is that it can contain high levels of thorium (Th), which is radioactive and must be handled with environmental care.  It is possible that Th may become a viable nuclear fuel in the future, which may change the future outlook for this mineral. But for now let us reminisce and a take a look at some good-looking monazite from the Smithsonian:

And finally, some monazite (mixed in there somewhere with the magnetite!) from the Deep Sands Project in Utah:

So what happened?  Why was monazite knocked from its throne?  The new light weight challenger was discovered in California.

Bastnaesite

Known by multi-spelled variations of the same name: “bastnaesite”, “bastnesite”, or “bastnäsite” is a carbonate mineral that came to prominence at Mountain Pass in California, and then gained further stardom at Bayan Obo, and then Sichuan in China. Bastnesite (I will try to give each spelling it’s share of the spotlight!) has a 75% theoretical rare earth percentage, and has a nice distribution of the LREEs. Let’s take a gander at some bastnäsite from Mountain Pass:

Nice looking stuff from the Birthday claim located a short distance from the eventual minesite at Mt. Pass. One of the differences between the Mountain Pass bastnaesite and the Bayan Obo bastnaesite, is that the Mountain Pass mineral was the primary ore while Bayan Obo is a by-product of iron mining.

The Bayan Obo bastnaesite (at least, that is what they told me on the tour — my Chinese is not so good!):

Here is a shot of some bastnaesite from Thor Lake in Canada (it’s the reddish stuff):

There are a number of other locations around the world looking at bastnaesite.  Thor Lake has it, a number of locations in China has it. Bear Lodge in Wyoming lists bastnaesite as one of its target minerals.

There are a number of LREE contenders, but these two minerals have dominated the LREE division of rare earths for decades. However, keep in mind that even as monazite was eventually knocked aside, bastnaesite may also be blindsided by another LREE mineral in the future.

The thrills just keep coming!

Please feel free to use the Contact page for questions or comments about rare earths.

By Clint Cox

Is the West just bluffing or is the rare earth industry headed for a bitter showdown? It’s a bit melodramatic, but let’s examine the facts:

First, there was the lead-up. The rare earth industry has known for some time that China has supplied the majority of Rare Earth Elements (REE) to the world. Projections have shown that this will likely remain the case for the foreseeable future. China also consumes an increasing amount of their own REEs. China has export quotas and tariffs on rare earths. The West needs these resources, but has very few options outside of China. The tension is getting more palpable. A few weeks ago the opening gambit was played — it was announced that the US and the EU were preparing to launch a formal complaint with the World Trade Organization (WTO):

http://www.eubusiness.com/news-eu/1244719922.23

According to the EUbusiness article:

“The materials include tungsten, copper, bauxite, antimony, yellow phosporous, magnesium carbonate, molybdenum, rare earths and indium.”

http://in.biz.yahoo.com/090623/137/batrx8.html

According to the above Reuters story published at Yahoo Finance India™:

“The materials expected to be covered by the case include yellow phosphorous, antimony, bauxite, coke, fluorspar, indium, magnesium carbonate, molybdenum, rare earths, silicon, talc, tin, tungsten and zinc.

In a move that may have been an attempt to forestall U.S. and European action, Beijing said on Monday it was cutting export taxes on a range of materials, including some used to make steel.”

It is interesting that Beijing is already responding to the WTO threat. It is also interesting that the US and EU went ahead with the formal complaint:

http://china.globaltimes.cn/top-photo/2009-06/439234.html

The Chinese are not happy with the complaint, and Mei Xinyu called it “ridiculous and unacceptable.”  Interesting!  The article also states:

The US and the EU have “staged such kind of shows” several times before, Mei added.

But US Trade Representative Ron Kirk said in Washington yesterday that “China’s measures appear to be part of a troubling industrial policy aimed at providing substantial competitive advantages for the Chinese industries using these inputs.”

“We are going to the WTO today to enforce our rights, so we can provide American manufacturers with a fair competitive environment and put more American workers back on the job,” Kirk told AFP.

A little back and forth. Bloomberg reported China’s counterpunch (although, for some reason, they failed to mention the rare earths!):

http://www.bloomberg.com/apps/news?pid=20601089&sid=aYIqDM13REqY

Today, China called for a WTO probe of U.S. restrictions on poultry imports and the trade body’s former chief, Mike Moore, warned that the world is in “dangerous waters” as protectionism increases.

Yikes.  The dreaded “P” word. The industry will be watching this rather closely. Here comes the really fascinating part for Rare Earth fans — if you take a gander at The Office of the United States Trade Representative announcement regarding the WTO case you find the following raw materials included:

http://www.ustr.gov/about-us/press-office/fact-sheets/2009/june/wto-case-challenging-chinas-export-restraints-raw-materi

The dispute filed today addresses various unprocessed and processed forms of nine inputs of key interest to a wide range of U.S. industries:  bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus and zinc.

Where are the Rare Earths?  I don’t have an answer right now, but it looks like they are not there! Are they included in the complaint?  The WTO doesn’t have the complaint listed yet, but I will keep checking. Is this much ado about nothing? That is quite possible.

The US and EU are obviously upset about raw materials, but what about Japan?  They are a substantial consumer of REEs from China. Will they be joining the fray? According to a story at www.steelguru.com (as sourced from www.platts.com):

http://steelguru.com/news/index/2009/06/26/OTk5MTg%3D/Japan_unlikely_to_follow_US_and_EU_in_WTO_filing_against_China.html

Although Japan appears unmoved yet by the US and the EU moves, the Japanese government nevertheless has voiced concerns over China’s production and export restrictions on rare earth. The Japanese trade ministry continues to seek talks on a bilateral basis, as it was more important for Japan to understand the ultimate aim behind China’s export restrictions, possibly leading to a joint solution.

It appears that Japan will continue to dialogue with China. Indeed, the title of the article is “Japan unlikely to follow US and EU in WTO filing against China”.

More on China’s response can be found at the English version of People’s Daily Online entitled “Absurd double standards on China’s resources”. I think the title says it all. They are not happy.

What does all of this mean to the market?  Not much, at this point — we’re not even sure that rare earths are included in the complaint!  There is lots of posturing, but the market continues to function.  There will be increased dialogue while the WTO encourages all concerned parties to work out their differences.  This process can take several years, and the entire sector may look different by the time the powers that be have concluded their arguments.

We will continue to track the story and see if REEs will be a “No-Show” or smack in the middle of a nasty WTO Showdown.

Please direct comments or questions to the Contact page.

I am working on a new format that will (hopefully) serve the Rare Earth community better.  The new format will be up by June 22nd.

Thank you for your patience!

By Clint Cox

Back in May I visited the Bear Lodge rare earth property of Rare Element Resources.  I have wanted to visit the site for quite some time, so it was a highly anticipated trip.  In the end (and throughout), it was quite enjoyable, and incredibly educational.  I was able to spend the better part of two days with several top-notch geologists who had many years of experience with rare earths.

I flew into Rapid City, South Dakota and drove from there to Sundance, Wyoming.  This is a great part of the country with the Black Hills, Mount Rushmore, Crazy Horse, the Vore Buffalo jump, and plenty of outdoor distractions.

We stayed in Sundance, and it was short drive on paved roads and then another short drive though the property on gravel roads to reach Bull Hill, the primary target of rare earth exploration at Bear Lodge:

Bull Hill at Bear Lodge

In its recently released 43-101 report, Rare Element Resources stated that they have over 9.8 million tons (this is 8.89 million metric tonnes) at 4.1% REO.  The primary rare earth minerals are ancylite and bastnaesite.  The infrastructure is very good at Bear Lodge, and we will watch the company closely as they look to develop their understanding of the property further.  We await the results of their metallurgical work, as they are trying to be the first to process ancylite as a primary REE mineral.

Special thanks to Don Ranta (President of Rare Element Resources) and Jim Clark (my host, and Vice President of Exploration) for allowing me to visit the site!