The Anchor House, Inc.

I interviewed Dr. Anthony Mariano in person on 6 July 2007. The following are excerpts from our conversation:

Clint COX: So how did you get interested in rare earths?

DR. MARIANO: How did I get interested in rare earths? I worked in a basic research lab with Kennecott Copper, and at that time, I was an earth scientist. I was able to do anything I wanted in research. One day one of the professors at Boston University, Arthur Brownlow, gave a talk. He had just visited the Fen carbonatite in Norway, and the Alno carbonatite in Sweden. He brought back a suite of rocks. As he talked about the mineralogy and the geochemistry of these carbonatites, I became fascinated with the unusual minerals that occur in carbonatites. Arthur Brownlow ended up giving me all of the rocks that he collected. While working for Kennecott in basic research, I discovered that Kennecott had 50% of the Bond zone, the Oka carbonatite in Quebec. I began working on Oka and conducting research on carbonatites from various world localities that were known to contain rare earths, niobium, and tantalum. Shortly after, the chief geologist from Molycorp, John Bryant at the time, (who used to be an ex-Kennecott geologist), invited me to go to Mountain Pass and look at the deposit. I did some research work on the Mountain Pass mineralogy and geochemistry, and also in rocks from Araxa, another carbonatite in Brazil that Molycorp owned. They invited me there in 1968. I continued to do research work –traveling to Africa, South America, and Canada to look at carbonatites. I became fascinated with the carbonatite at Blue River in British Columbia because of its unusual geologic occurrence in active orogenic environment and because of the high tantalum content. [Blue River is now owned by Commerce Resources].

Rare earths have an intrinsic property that allows you to differentiate carbonatites from non-igneous calcium carbonate or dolomite-rich rocks. I just became fascinated with the rare earths in mineralogy and their total geochemistry and distribution.

COX: And here you are, years later.

DR. MARIANO: Yes. But I’ve extended my expertise to include other rare elements that are often found associated with carbonatites, or alkaline igneous rocks. So I don’t just work on carbonatites. The Pitinga Younger granite, the Younger granites of Nigeria, the Thor Lake granite — they are not carbonatites — but they are enriched in rare elements, which now constitute my area of specialization.

COX: What other elements do you look at? What are some of the other rare metals that you follow?

DR. MARIANO: Titanium is not necessarily rare. It’s an industrial mineral, but it’s often concentrated in beach sands. The mineral apatite may also be concentrated in carbonatites. Agricultural apatite from carbonatites is mined in the Kola peninsula, Russia, extensively in Brazil and in Palabora, South Africa, and Ontario, Canada. I get involved in zirconium also — which can occur in substantial amounts in alkaline rocks and in carbonatites.

COX: How would you describe the present state of the rare earth market, or rare earth mining?

DR. MARIANO: There are so many demands now, particularly dealing with the use of the high field strength magnets in hybrid automobiles, and the use of the rare earths in catalytic converters. There are many unique properties of rare earth elements that cannot be substituted for by other elements. Years ago, people were talking about substituting copper with aluminum, but copper has unique properties, and aluminum could never take over the copper market. This is particularly true with the rare earths. The valence electrons of the rare earths are sub-orbital electrons that occur in a lower shell of the electron configuration of the rare earth elements. This introduces properties to the rare earths that are rather unique, and they’re not replaceable. So the demand is always going to be there. Research work continues to be done where we are constantly finding new applications for the rare earth elements. The outlook for the rare earth market is very good, and it’s going to continue to be — especially since rare earth elements and their utilization are of strategic importance.

COX: What do you see as the greatest risks for the rare earth market?

DR. MARIANO: There are 14 rare earths [promethium (Pm) is not usually counted because it does not occur naturally], 15 including yttrium, and if you want to include scandium, you get 16. The demands for the rare earths are very dynamic. One day there’s a big demand for a certain rare earth and tomorrow that demand diminishes and some of the other rare earths gain greater value. One has to be working on deposits that are enriched in the rare earths that are currently in demand. I think the best solution for that is to have a deposit that has all of the rare earths and the sophisticated technology of separating them and being able to produce high-grade products of oxides or metals. You have to be able to provide the world market demands.

COX: What do you think are the common misperceptions about rare earths? What are some of the things that people just don’t get yet?

DR. MARIANO: One of the big misconceptions in exploration is that people see anomalous rare earths in any deposit that they are working on, and then they immediately think they have a potential economic rare earth deposit. That’s the biggest misconception. Keep in mind that during the 70s and 80s, Molycorp — who pretty much had the rare earth market at that time –- would not look at any deposit if it had less than 2% total rare earths. A number of years later, the Chinese made the innovation where they could mine orders of magnitude less rare earths from the ion-absorbed South China clays, which currently play a very significant role in the world market for rare earths. People may discover a deposit, but they’re not able to make proper evaluations on the worth of rare earth deposits.

COX: How dominant do you think China is right now?

DR. MARIANO: They’re totally dominant. Who else is producing rare earths? Molycorp is going to start building up again later this year, hopefully, but their labor costs may still be very high compared to China. They are working on refining their extraction chemistry skills that can make them very competitive with the rest of the world — and that may be very much to their advantage. Right now, the rare earths are all coming from bastnaesite from Bayan Obo in Inner Mongolia, bastnaesite from Sichuan in China, and the ion-absorbed rare earth clays in South China. Also there may be small amounts of monazite or xenotime that may be coming as a by-product of ilmenite and/or cassiterite mining in Malaysia, Thailand, and Australia. But that’s probably on a very small scale.

COX: What are some of the things that have surprised you the most during your involvement in the rare earths?

DR. MARIANO: Well, the thing that surprised me the most was the ion-absorbed clays. That was a fabulous innovation that the Chinese made. When I was a little boy playing with toys, if they were made in China or Japan, you threw them away. You used them a couple of times and then they broke. I think a lot of Westerners developed the idea — although totally incorrect — that the Asians are very good at copying, but they are not innovators. That is absolutely incorrect. And when you consider the research that Molycorp and Rhone-Poulenc put in to rare earths — they were just totally outdone by the Chinese with that fabulous innovation.

By Clint Cox

I interviewed Dr. William H. Bird, President and CEO of Rare Element Resources, on March 4, at the PDAC conference in Toronto. Rare Element Resources was created to develop the Bear Lodge gold/rare earth property in Wyoming.
COX: How did you get interested in rare earths?

BIRD: Well, my career began as an igneous petrologist and mineralogist, particularly the rarer minerals that had some economic interest.

COX: What would some of the examples be of “rarer minerals”?

BIRD: Well, everything from the rare earth elements themselves to gold, and everything in between. And, the base metals, gold, the rare earth elements are much more common in the earth than is gold. And, in both cases, the deposits of these minerals are even more uncommon, and the search for these deposits interested me from the beginning. But, because I came at it from the mineralogical end of things, the igneous petrology end of things, perhaps I had some kind of an early interest in some of the deposits that were created in unusual situations like the carbonatites and things like that. I’ve had a long term interest in carbonatites, and the rare earths are found in carbonatites. So, that’s how I was introduced to them. Interestingly enough, I visited the Bear Lodge deposit before anybody even knew that rare earths were there, or carbonatites were there. I visited in 1963 on a University of Wisconsin summer field course. The professors just took us there just to show us an alkaline igneous complex. At the time we didn’t know about the carbonatites or the rare earths. But, that was my first visit to that property in 1963. It was over 40 years ago. Since that time, I’ve been back as a professor and student several times because of the unusual petrology, the unusual rocks that appeared there, and the unusual minerals. And, in July 2005, I was contacted by the board of directors of Rare Element Resources, and asked to take over the company. And, it was because of my interest in previous knowledge and interest in the Bear Lodge property, and previous knowledge of the rare earth element minerals that I accepted that job. I actually got quite excited about working for this company that is actually looking for these minerals that I’ve had this long term interest in. That’s how I got into it. That’s purely from my academic background.

COX: Nice. And, what do you see is the upside to the rare earth market over the next three to five years?

BIRD: Well, the upside is certainly in the consumer industry. It’s incredible how many different uses are developing for these things: everything from uses of relatively small amounts, and things like unusual lasers to uses in consumer products that could eventually be sold in the tens of millions of items. This is going to be the growth of the industry, and another factor would be the growth of the understanding such as it is in the general population of what these minerals, these elements, are good for.

COX: And, what elements do you see as the most critical to today’s market?

BIRD: Well, all of them are used in critical applications. However, I think the one that’s used in the greatest volume and the most critical application, the combination of those two things, which again requires volume of material is neodymium. And, this is the use in the magnets. Now, also, lanthanum and cerium have the longest history of industrial usages. There are several rather prehistoric uses of the material in glass, these uses: coloring agents in glass and ceramics, and various things like this, all the way down to the use for nickel metal hydride batteries. Right now, certainly the best high tech use for lanthanum and cerium are the nickel metal hydride batteries. But, most of this lanthanum and cerium is still used in more of the old fashioned uses in paints, and pigments, and glass coloring agents, and things like this. But, I think definitely the present element that’s of most commercial interest is neodymium in the magnets.

COX: What do you see as the greatest risk for the rare earth market?

BIRD: The greatest risk in terms of orderly marketing of the material is actually a rarity of the material, an inability to supply. And the opposite end of that risk of course to the producer is that it’s possible that somebody will find a huge supply, or be able to marshal a huge supply, and bring the price down. So, there are those two risks. It’s curious that you could have the risks in both ends of the situation, either not enough of the material to sell, which will drive prices to the moon. And, it would be very good for the producers. Or, conversely, too much of the material floods the market, and the price goes down. And, the market at this point is not well understood enough in my opinion to be able to avoid either one of those risks.

COX: Do you think the investing public will become aware of the situation in rare earths? And, how do you see this unfolding?

BIRD: I don’t know how to judge that. I certainly think awareness will continue to grow. It is the duty and necessity of those of us who are in the rare earth business, whether it’s the exploration business such as Rare Element Resources, or the production business, like some of the Chinese companies that are making this stuff. It’s the business of those companies to educate the public. We have to do that. And, if we are able to do our job properly, I think the public will become more and more aware of this. But, we have to do the job. I don’t think anyone’s going to do it for us. The use of the products is relatively invisible in the consumer industry. No one knows the huge quantity of rare earth elements that are used in the hybrid cars. No one knows about that. If we make a million hybrid cars a year, the use of rare earth elements is going to skyrocket. If we make 10 million or 100 million, which is very likely, there’s no way of knowing how high those prices are going to go. But to start with, we have to educate the public as to how much of this material is actually needed in our daily consumer lifestyle. I mean, everything from iPods to cell phones, television sets, computers, the hybrid car, all of these things use a tremendous amount of this material.

COX: Now, I’ve heard about rare earths in iPods. I know that it’s used in the ear buds for iPods, but is it actually used in the hard drive for iPods as well?

BIRD: Supposedly. I have only anecdotal information on this myself.

COX: You haven’t melted one down yourself?

BIRD: No, I haven’t, and [LAUGHTER] all hard drives in computers use a certain amount of rare earth elements. The motors in these things have to use them. Neodymium, you use them in the magnets. Any time you need a tiny motor with a lot of power, you’ve got to use neodymium. Now, in the case of iPod, you’re not using very much. But, when you scale this thing up to the size of a hybrid car, you’re using tens of kilograms of the material.

COX: How are environmental concerns shaping the output of mines in China today?

BIRD: Well, it’s actually quite gratifying to see that the Chinese are starting to pay attention to environmental concerns. And, we mentioned the shutdown of the south China clays. That sort of thing would be unheard of even five years ago. There are a number of indications that China is coming to terms with these problems just simply because they are entering into the worldwide consumer market, and they know the concern that the rest of the world has for this. And, they realize that their own people aren’t going to be able to put up with a polluted environment in the future. So, as lifestyle and level of income increases in China, the middle class grows, those people aren’t going to be willing to put up with this kind of stuff. They’re going to want to breathe clean air and drink clean water. They seem to be finally understanding us and dealing with it. Same with safety problems in mining. They’re finally dealing with some serious safety problems that they’ve had for years. And, it is going to have to affect the cost of their material that they’re selling, no question about it. So, it’s a good sign. If they take care of their environment in southeast Asia and China in general, it’s going to help our environment. So, we all want them to do this. And, it will add to the cost of producing these elements.