CARPENTERSVILLE, IL – June 4, 2014 – A team led by Technology Metals Research, LLC (TMR) has been awarded $1.2M in funding from the US Army Research Laboratory (ARL), part of the US Department of Defense (DOD), via a subaward agreement with Worcester Polytechnic Institute.

The project, involving a dozen companies and research institutions in the United States, Canada and Australia, will focus on the development of the key components for a domestic rare-earth supply chain, for heavy and other critical rare-earth elements (REEs).

REEs are vital ingredients in many high-tech components used in defense, industrial and green-energy applications. In recent years the REE sector has been dominated by China, which provides approximately 90% of global supply. The heavy REEs dysprosium and yttrium were recently mandated for inclusion in the DOD’s National Defense Stockpile, despite not presently being produced in the USA, from US-based sources.

Project partners include Innovation Metals Corp. (IMC) and researchers at Argonne National Laboratory, the University of Illinois at Chicago, the University of South Australia and the ARL itself. A number of ‘stealth-mode’ companies and researchers with promising new technologies will also participate in the program.

“As well as validating IMC’s process-flow diagrams for the bulk solvent extraction of heavy and critical REEs,” said Gareth Hatch, co-founder of TMR, President of IMC and the Principal Investigator for the 12-month program, “this award from the ARL will allow the team to evaluate new process technologies that have the potential to revolutionize the speed and efficiency of REE extraction and separation. These are exciting, materials-science-based approaches that have not been seen by the rare-earth sector before.”

In addition to process development and validation, TMR will work with leading REE geologists and mineralogists to characterize promising sources of critical REEs in the continental United States, beyond those currently being commercialized. The company will also look at the development and validation of computer simulation tools, for the accurate modeling and rapid optimization of existing and new REE separation processes.

“We’re very interested in the possibilities that the TMR-led project will bring to the rare-earth supply chain,” commented Dan McGroarty, President of the Washington, D.C.-based American Resources Policy Network. “The program has the potential to advance the development of a robust domestic production capability for critical REEs that is ultimately accessible to the DOD, the defense supply chain and beyond. The program activities constitute a unique, vertical approach – across every point on the supply chain from the supply to demand-side, from extraction through separation to end-users – addressing the issue of U.S. dependence on foreign-controlled entities for critical REE processing and production.”

“Private capital has made extraordinary investments in the rare-earth supply chain over the past few years,” added Jeff Green, Executive Director of the Strategic Materials Advisory Council (SMAC), “but absolutely critical gaps in the US supply chain remain — gaps that would seriously undermine the defense industrial base and essential civilian programs during a peacetime supply disruption or contingency scenario.” Mr. Green continued, “The fact that the ARL is pursuing this project with industry leaders like TMR shows exactly how serious they are about this issue. It is a most welcome first step in re-shoring the current state-of-the-art while fostering the next generation of rare-earth innovators in the United States. The SMAC is proud of the efforts by Council Member Dr. Hatch and applauds the Army and the DOD for its leadership.”

In addition to coordinating the existing program activities, TMR remains open to looking at additional processes and to collaborations with other groups, which could contribute to the overall objectives of the project.

About Technology Metals Research, LLC
Technology Metals Research, LLC (TMR) is an independent market-intelligence and analysis firm, focused on rare earths and other critical and strategic materials. TMR provides research management, due-diligence assistance, and other advisory services to public and private companies, institutional investors, government agencies and other market-intelligence firms.

Forward-Looking Statements
This news release contains statements that may constitute “forward-looking statements” within the meaning of applicable United States laws. Forward-looking statements may include statements regarding the future plans, objectives or performance of Technology Metals Research, LLC (“TMR”), or the assumptions underlying any of the foregoing. In this news release, words such as “may”, “could”, “would”, “will”, “likely”, “expect”, “intend”, “plan”, “goal”, “estimate” and similar words and the negative forms thereof are used to identify forward-looking statements. Such statements are subject to risks, uncertainties and other factors beyond TMR’s control, and which may cause the actual results, activity or performance of TMR to be materially different from those expressed or implied by such forward-looking statements.

I am delighted to announce that TMR will be hosting a live 60-minute conference call and Q & A session with Dr. Dambisa Moyo, an international economist and one of the world’s leading experts on macroeconomics and global affairs. She is the author of the recently published book Winner Take All: China’s Race For Resources And What It Means For The World.

The live call is scheduled for 9:15 AM EST on Monday, July 16, 2012.

In addition to her new book Winner Take All, Dr. Moyo is the New York Times bestselling author of How The West Was Lost: Fifty Years Of Economic Folly – And The Stark Choices Ahead, and Dead Aid: Why Aid Is Not Working And How There Is A Better Way For Africa. Her work regularly appears in economic and finance-related publications such as the Financial Times and the Wall Street Journal.

Dr. Moyo was named by Time Magazine as one of the 100 Most Influential People in the World, and was named to the World Economic Forum’s Young Global Leaders Forum. She holds a doctorate in Economics from Oxford University and a masters degree from Harvard University’s Kennedy School of Government. Dr. Moyo completed an undergraduate degree in Chemistry and an MBA in Finance at the American University in Washington, DC.

You are welcome to join us on the free call. The focus of our discussion will be the important issues raised by Dr. Moyo in Winner Take All, which include:

• The key drivers behind China’s growing appetite for natural resources and their geopolitical implications;

• What recent events in the rare-earths market can tell us about China’s approach to mineral commodities and other hard assets;

• The rapidly evolving dynamics of the China – Africa relationship;

• What all of this means for the rest of world;

• …and more

In addition to listening in on the discussion, you’ll also have the opportunity to put questions to Dr. Moyo during the call.

If you’d like to participate, reserve your slot by registering here, and we’ll make sure that you get the call-in details. If you’re not sure that you’ll be able to call in, register anyway and we’ll let you know when an audio file of the call is available for listening.

Slots on the free call will be limited – so don’t delay – register today!

Update – July 21, 2012: you can now listen to the completed call by clicking the Play button below.

by Brian Sylvester – The Critical Metals Report – published: Nov 22, 2011

Brian Sylvester: Gareth Hatch, co-founder of Technology Metals Research LLC, gives us the lay of the land in the rare earth sector. Many variables are shaping this developing market, and from calculating global demand to anticipating individual project costs, data makes the difference in determining viable investments. Gareth Hatch gets down to the nitty gritty in this Critical Metals exclusive, and comes up with some promising projects in the works.

The Critical Metals Report: Gareth, Greenland’s natural resource minister said that beginning in 2012, his country will take bids to develop its rare earth element (REE) deposits. What do you make of that?

Gareth Hatch: It was a little surprising, frankly. Of course it very much depends on the existing relationships in place between the private-sector companies and the government there, and how they intend to exploit those resources, but I might be a little concerned if I were one of the private companies and the government had not approached me first, before making this announcement.

TCMR: Are you talking about companies like Hudson Resources Inc. (HUD:TSX.V)?

GH: Possibly, yes. Of course we don’t know who has talked with whom. Hudson has its Sarfartoq project in the southwest. Greenland Minerals & Energy Ltd. (GGG:ASX) has its large Kvanefjeld deposit in the south, and a handful of others have projects, too. They have invested a lot of time, effort and money into their projects.

TCMR: Molycorp Inc.’s (NYSE:MCP) CEO, Mark Smith, asserts that the 30 thousand ton (kt) REE export quota issued by Chinese authorities for 2011 is equivalent to only 21 kt rare earth oxides (REOs). Considering that ferroalloys are included in the list of compounds covered by the quota, it seems like an even tighter quota than was expected.

GH: Including this new category of materials likely does reduce the equivalent REO to 21–22 kt, but in 2010, without ferroalloys, the equivalent was 22–24 kt. We have to compare the right sets of numbers. I agree that there has been a decline, even if it is not as dramatic as going from 30–21 kt. Whichever way you look at it, it is still less than the demand for rare earth oxides, although of course there are significant quantities of rare earths being exported out of China illegally.

TCMR: Electric vehicles are a key end-use for rare earths, particularly in permanent magnets. Is the recent, highly publicized combustion of Chevrolet’s Volt a threat to the sector?

GH: I don’t think so. If there were systemic safety issues that threatened the rollout of these vehicles, and subsequent market penetration, then there might be some concern about demand. But I think it’s unlikely. On the other hand, from a material usage point of view, if there really is a problem caused by Li-ion batteries, then this could be an opportunity: Prius-class hybrid vehicles use nickel-metal hydride batteries, which contain fair quantities of rare earths. Either way, I don’t see the industry being derailed.

TCMR: In Critical Rare Earths, you say that the world will break even on supply and demand for neodymium oxide by 2013, but not until 2015 for europium oxide. Meanwhile, Byron Capital says there will be 5 kt of annual oversupply of neodymium oxide by 2013, and 309 tons of extra europium oxide by 2015. Whom do investors believe?

GH: There are several differences between our numbers. Byron is predicting lower demand than the U.S. Department of Energy (DOE), whose projection numbers I used in my report. With respect to europium specifically, Byron includes some potential ionic-clay deposits outside of China in its projections. I suppose that one or two of these might exist. Byron assumes that they do and that they can be brought online faster than other sources of supply, which will generally come from hard-rock deposits; I did not factor hypothetical ionic-clay deposits into my calculations.

TCMR: Byron assumes there will be less demand for neodymium and europium because, if they are too expensive, end users find alternatives. In some cases, that has already happened.

GH: The DOE numbers were based on projections completed in the latter half of last year, and prices didn’t peak until this past summer. When the DOE updates its data, it will likely factor in current prices and potential effects on demand. If we look at downstream end uses, the price of raw materials directly affects the price of permanent magnets, for example, and motor engineers are already starting to choose designs that use fewer magnets, because the cost savings outweigh the additional manufacturing challenges of such designs. Thus, I can see current demand projections being quite different from where they were a year ago. Byron likely has a more up-to-date set of assumptions. We are waiting to see what updated figures the DOE puts out before the end of this year, and based on that, I would imagine that in the first half of next year we would revise our surplus/deficit projections accordingly.

TCMR: What numbers are rare earth companies using to project supply and demand?

GH: Most junior mining companies use the data that Dudley Kingsnorth puts out from Industrial Minerals Company of Australia (IMCOA). He typically updates his information two or three times a year. Mr. Kingsnorth recently reduced his demand projection for 2015 from about 190–170 kt of total rare earths. Other companies, most notably Lynas Corp. (PINK:LYSCF) and Molycorp, combine IMCOA’s numbers with their own research, but get roughly similar projections.

TCMR: You also said the grade and distribution of the critical REE (CREE) neodymium has the greatest influence on the rankings by grade, of CREEs present within specific mineral resources. Does that mean the higher the grade of neodymium present, the more likely a deposit is to be developed?

GH: Not necessarily. By mass, you would expect to see more neodymium than any of the other rare earths (i.e. europium, terbium, dysprosium and yttrium) simply because it is a light REE (LREE) and LREEs are more abundant; the other four are heavy REEs (HREEs) and generally occur in much lower quantities than neodymium. That said, there is increasing demand for neodymium-based permanent magnets, and thus neodymium (and praseodymium) and its usage in magnets will be a key factor in the potential development of early-stage projects. However, other factors must be considered, such as first-mover advantage and infrastructure. Some would argue that these are more important than the grade present of a particular element. You don’t have to have a top-five CREE distribution or grade to have a potentially successful project.

TCMR: In terms of the in-situ quantity of individual CREEs, what are the top-five deposits?

GH: If you look at the breakdown of in-situ tonnage of each of the five CREEs, for neodymium, the Kvanefjeld project in Greenland and the Nechalacho project at Thor Lake, owned by Avalon Rare Metals Inc. (AMEX:AVL), ranks highest. They both have well over an estimated 800 kt of neodymium within their respective mineral resources. You’ve also got the relatively new resource estimates for the Montviel project in Quebec from GéoMégA Resources Inc. (GMA:TSX.V) and the Eldor Project owned by Commerce Resources Corp. (CCE:TSX.V; D7H:Fkft; CMRZF:OTCQX). The fifth-ranked deposit by quantity of neodymium would be Strange Lake, owned by Quest Rare Minerals Ltd. (AMEX:QRM).

It’s important to bear in mind the maturity levels for each of the projects in this sector in terms of their mineral-resource estimates. Many of the early-stage exploration projects have Inferred resource estimates only, in contrast to, for example, Avalon’s Nechalacho deposit, which in addition to having a portion of its mineral resources at the Indicated level (which gives a higher degree of confidence in that part of the estimate than data at the Inferred level), is also one of the very few projects out there with an actual mineral-reserve estimate (i.e. a portion of the mineral resource has been independently determined to be economically viable). That gives you a particularly high level of confidence in the overall in-situ quantity data for a development project like that, versus those at a much earlier stage. If you look at europium, terbium and dysprosium, Nechalacho has the most of each in the ground, based on those resource estimates. You have Montviel and Eldor for europium, too. Mount Weld in Australia, owned by Lynas, has quite a bit of europium and terbium and Kvanefjeld again shows up on the list, for europium.

Other names that show up as you go down the line: the Norra Karr project from Tasman Metals Ltd. (TSM:TSX.V; TASXF:OTCPK; T61:Fkft) in Sweden would be one. Norra Karr features quite a bit of terbium and dysprosium, as does Alkane Resources Ltd.’s (ALK:ASX) Dubbo Zirconia Project in Australia. They make the top five for quantity of in-situ dysprosium and yttrium. Some of the same names show up repeatedly, reflecting the overall size and maturity of their rare earth estimates.

TCMR: What were your impressions when you recently visited Tasman Metals’ Norra Karr project? Can it supply European manufacturers with the rare earths that they need?

GH: Well, one has to remember that these materials are fungible, so you can use them anywhere, not just in one geographic region, but certainly, shipping costs do apply. What struck me about Norra Karr was that it’s maybe 400 meters from a major highway that comes southwest from Stockholm. From an infrastructure and accessibility point of view, it doesn’t get much better than that.

TCMR: Is the company planning to produce oxides or concentrate?

GH: The current plans go as far as the concentrate stage. Like a number of other rare-earth projects currently under exploration and development, Norra Karr contains zirconium silicate minerals, so Tasman will have to demonstrate that it can handle what are thought of by some, to be difficult minerals to process.

HREE concentrates are typically going to be separated via different processing circuits than the other concentrates potentially produced at such deposits; so the company may go elsewhere to get its concentrates separated; Tasman is keeping its options open. The company may not necessarily do the separation in-house.

TCMR: Isn’t that where the most value is?

GH: It is. Tasman won’t necessarily sell its concentrates; there are potential opportunities to do tolling or to maintain value and ownership in other ways. The key concept behind Innovation Metals Corp., the company that I recently co-founded with Patrick Wong, is the creation of centralized separation facilities for just this type of scenario—to provide services to companies that have concentrates, particularly HREE concentrates. The companies could toll those materials for a nominal fee, while retaining ownership of the separated materials afterward, all without having to invest extensive capital in big and expensive separation facilities of their own.

TCMR: Like a base-metal smelter.

GH: Yes; this tolling concept is a fairly well known concept in other industries. The key technical challenge of course, is whether you can take in concentrate feedstock from multiple sources. We think we can do that.

TCMR: What struck you when you visited Quest’s Strange Lake deposit in northern Quebec?

GH: Quest has a really nice deposit up there; a number of knowledgeable geologists walked us through the details on our visit. Quest also has a very professional organization and is well resourced. The challenge of course, is that Strange Lake is tucked away in a part of Canada that would require significant new infrastructure, to be able to properly service it and to get materials in and out.

When we were there, the company was just finishing up exploration and was starting the process of “handing over the reins” to the engineering people. Quest is now finishing up its prefeasibility study. The company has also recently added a director to its board with mining project experience. Quest is looking to expand and looking to put the right people in place to make this project a reality, if it can get the next stage funded.

TCMR: Quest President and CEO Peter Cashin has been talking about not only shipping concentrate, but separating the rare earths into oxides. What are your thoughts on the probability of that?

GH: These companies have to make a decision: at what point should they sell: at the concentrate stage or after producing oxides? If they can find the capital to build separation facilities and produce oxides and they have workable processes, then they will of course consider separating concentrates into oxides. Currently there aren’t many alternatives; no one processes commercially significant quantities of heavy rare earths outside of China, which is where a company like Innovation Metals comes in. If Quest doesn’t get into separating oxides, it has to figure out how to maximize its revenues from its concentrates.

TCMR: What other projects have you visited?

GH: I have visited Avalon’s Nechalacho project in the Northwest Territories, which is in the advanced stages of development. The company is currently looking to hire a number of additional production and engineering folks. I have always been impressed with the Avalon management team’s handling of technical development, especially its interactions with the First Nations people who live in that area.

TCMR: Nechalacho has some impact benefit agreements worked out with the local First Nations. However, there could be some issues as people learn about the environmental risks associated with rare earth mining. Do you think that Avalon’s exceptional relationship with First Nations will mitigate that?

GH: The plan for Nechalacho is to mine underground. Visually and physically, underground mining has less impact on the surface, though of course every project has supporting facilities above ground.

TCMR: But there will be tailings, right? And often these deposits have elements like uranium or thorium, which are radioactive. I’m not sure if Nechalacho has these, but it’s common.

GH: Certainly some groups are likely to be concerned about the effects, sure, but that’s not unique to Nechalacho. As I said, I have always been impressed with Avalon’s corporate and social responsibility initiatives; I think that the company has a genuine desire to do the right thing, and yes—it has very good relations with the local people—exemplary, in fact.

We need education on this. Environmental protection is extremely important, but some companies are actually prepared to invest in the technology and careful planning that can be used to reduce and to mitigate environmental impact. The industry as a whole needs to get that story out there. It is also important that consumers realize where the magnets in their cars and hard drives, the phosphors in their computer screens come from— ultimately from minerals that you have to get out of the ground. That is not an excuse to rape and pillage the land, and some companies in the industry are better than others in doing their bit. But this is not just a rare earth issue; it’s a mining issue in general.

TCMR: Among the projects you named, what’s a rough estimate of the average cost of development?

GH: At a minimum you’re talking in the low hundreds of millions of dollars. Larger projects with higher production rates or HREE-rich deposits tend to run from half a billion to over a billion. Projections for the Kvanefjeld project in Greenland, for example, are over $2.3 billion (B). There is quite a range for different types of projects in different stages of development. Of course, if a project has already completed a prefeasibility study, the current cost estimates should be closer to the actual final costs, than those in a scoping study or other earlier-stage estimates.

TCMR: Are any projects going to be developed for under $200 million (M)?

GH: The Tasman folks have said that Norra Karr is looking at $200M for getting to the concentrate stage. Its relatively low number for a HREE project is influenced by the presence of existing infrastructure. Smaller projects, like the Bokan-Dotson deposit in Alaska owned by Ucore Rare Metals Inc. (PINK:UURAF), and the Zeus/Kipawa project in Quebec owned by Matamec Explorations Inc. (MAT:TSX.V; MRHEF:OTCQX ), are fairly modest from a production rate point of view. Assuming these companies can sort their metallurgy and flow sheets out, my understanding is that current estimates for Bokan-Dotson are around $175M for development, and for Zeus / Kipawa, probably closer to $300-350M.

TCMR: Much like Tasman Metals, Matamec is also close to infrastructure and located in a mining-friendly area.

GH: I had the chance to take a trip out to Matamec, and it was pretty close to power lines and logging roads and not far from paved ones. It was a short hop from North Bay, and Quebec is by all accounts a mining-friendly jurisdiction.

TCMR: What are some promising projects in Africa?

GH: One is the Steenkampskraal mine in South Africa, which I visited earlier this year, and is owned by Great Western Minerals Group Ltd. (GWG:TSX.V; GWMGF:OTCQX). It is a former thorium mine with historical estimates of very rich REE grades. It is currently being refurbished. Also in South Africa is Zandkopsdrift, the project owned by Frontier Rare Earths Ltd. (FRO:TSX), which has Indicated and Inferred mineral-resource estimates. It is going through the scoping study for Zandkopsdrift right now, more usually known these days as the preliminary economic assessment (PEA). Montero Mining and Exploration Ltd. (MON:TSX.V) recently published an Inferred mineral-resource estimate for its Wigu Hill project in Tanzania. The other project that some folks will be familiar with is Kangankunde, in Malawi, currently owned by Lynas. Those four have the most public-domain data available on their exploration activities, out of all of the REE exploration projects currently underway in Africa.

TCMR: Frontier and Montero both have deals with Korea Resources Corp. (KORES). Do you think that that gives them an advantage?

GH: It depends on the scope and scale of KORES’ involvement, but in terms of financing and support, there is a potential distinction in the investor’s mind between them and other companies at similar stages of development. Some see it as offering increased confidence that the company will have access to funds and other resources. On the other hand, there is potential concern from the supply chain that once such resources are developed, they won’t be available on the market, so the deals would have little direct benefit to non-Korean end users. I think it’s too early to say, but it is clear that non-private-sector actors are looking to establish long-term relationships with the owners of potential sources of supply, on behalf of end-user companies in their respective countries.

TCMR: Why do you think KORES chose those two deposits?

GH: Their mineral-resource estimates show that they have good grades (over 2%) of LREE materials, contained in minerals that should be fairly straightforward to process. Do remember that LREEs are still required for a wide range of applications; I think that this simple fact gets lost in the stampede of interest in HREE projects sometimes.

TCMR: What is the production timeline for Frontier’s and Montero’s projects?

GH: Montero has just recently defined its resource, so I would be surprised if the company was throwing around production dates yet. Frontier is estimating that its Zandkopsdrift project will enter production in about 2014. Some investors would probably stick their neck out and use such dates, but for me, the scoping study/PEA stages are perhaps a little early for decent estimates.

TCMR: Is there anything you’d like to leave our readers with?

GH: They need to realize that the investor’s point of view is very different from that of the supply chain. Investors are looking to grow their investments through dividends and increased share prices, while supply-chain folks are looking for production—they need metals and other finished goods. They really don’t care which projects succeed in the stock market, so long as some do. They are also not going to wait forever for projects to come onstream, in the face of escalating prices; they will do what they need to, whether that is engineering re-design work, or reducing the per-unit quantities of materials that they need. Therefore, investors need to keep a close eye on demand estimates. The conversation about Byron’s numbers versus mine was a good illustration of that. The supply chain ultimately dictates demand, and understanding the individual rare earths, each with their own demand profiles, will give some clues about where the supply chain is going, and thus the potential future market as a whole.

TCMR: Are you saying there isn’t room for all of these projects to be developed?

GH: TMR is tracking well over 390 different rare earth projects at present; I can’t see more than 8-10 coming onstream in the next 5-7 years. My colleague Jack Lifton recently got some heat for saying something similar recently, but it should be pretty obvious that that’s the nature of the beast. Projects already well past exploration and into the development and engineering stage, and beyond, clearly have first-mover advantage. As demand grows, other projects might become viable.

TCMR: Thank you, Gareth; it’s been a pleasure.

DISCLOSURE:
1) Brian Sylvester of The Critical Metals Report conducted this interview. He personally and/or his family own shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of The Critical Metals Report: Quest Rare Minerals, Matamec Explorations Inc., Ucore Rare Metals Inc., Commerce Resources Corp., Tasman Metals Inc., Montero Mining and Exploration Inc. and Frontier Rare Earths Ltd.
3) Gareth Hatch: I personally and/or my family own shares of the following companies mentioned in this interview: Innovation Metals Corp. I personally and/or my family am paid by the following companies mentioned in this interview: Innovation Metals Corp.

by Krista Zala – Technology Review – Published: October 11, 2011

The find could ease U.S. dependence on Chinese supply, but critics consider the announcement premature.

Molycorp Minerals announced last week that it had found significant ore deposits of heavy rare earth elements near its mine in Mountain Pass, California, and could start production in two years.

If it proves feasible, the discovery would put Molycorp at the forefront in breaking the United States’ dependence on China’s supply. However, speculation remains as to when, or if, the company can deliver.

“You can probably count on one hand the number of rare earth deposits where there are a predominant amount of heavies,” says Jim Sims, Molycorp’s vice president of corporate communications. “Finding terbium and dysprosium is a big deal. It will increase supply for most applications.”

Rare earth metals are often all found together, typically with far more light than heavy elements. Both light and heavy elements go into making LCD screens, compact fluorescent bulbs, and the strong permanent magnets used in hybrid car batteries and wind turbines. Uses in hybrid car batteries and military equipment require adding heavier elements to keep the materials magnetized at their high operating temperatures.

Molycorp began extracting light rare earth metals from the open-pit Mountain Pass Mine in the 1950s. A costly cleanup, combined with low-cost competition from China, shut the mine down in 2002. China currently supplies at least 95 percent of the world’s rare earth elements and up to 99 percent of the heavy varieties. The nation is cutting back exports amid growing demand to the point where some metals are fetching thousands of dollars a kilogram. Many western markets would welcome news of an alternative supply.

Other companies are surveying potential sites in Canada, Alaska, and Australia. Molycorp is the first such company to declare it has a viable source. Sims says measurements of the grade, mineral matrix, and size of the ore deposit appear favorable to commercial extraction. But it is relatively early in the process to go public with it.

“I’m highly skeptical of the real impact of the announcement this week,” says Gareth Hatch, cofounding principal of Technology Metals Research, a firm that advises rare earth metals stakeholders. “We’re being asked to take it on faith that it will happen, but it doesn’t work like that.”

The motivation may relate to the U.S. Department of Energy’s December 2010 Critical Materials Strategy report, which expresses concern about a short-term supply disruption. The announcement asserting the discovery of four of the report’s critical rare earth metals reassures manufacturers that the elements will be available to the supply chain at reasonable prices until other western suppliers start producing them in the next few years. Such a discovery also minimizes the need for engineers to redesign products so they won’t require problematic components.

Molycorp appears to have faith in its light rare earths: it’s spending $781 million to overhaul its equipment and expand potential production to 40,000 tons a year. But the 8-K statement filed with the U.S. Securities and Exchange Commission last week makes no promises as to what it will find once it starts drilling for the heavier varieties: “Molycorp must do extensive test drilling to determine the quantity and quality of the deposit. Accordingly, there can be no assurance as to the quantity or quality of such rare earth deposit or that such deposit will become proven or probable reserves.”

by Geoff Hiscock – The Australian – Published: January 19, 2011

As Chinese President Hu Jintao wraps up his US tour on Friday with business meetings in Chicago, his country’s future role in the global rare-earth trade will be under scrutiny at a Critical Materials investment conference on the other side of the North American continent.

But instead of the usual discussion about Chinese domination of the rare-earth supply chain – it currently has more than 95 per cent of the market – two of Hu’s rare-earth specialists are due to speak at the conference in Vancouver, Canada on the theme “China to join the buy side.”

They are Lin Donglu, secretary general of the Chinese Society of Rare Earths and Dr Chen Zhanheng, director of the society’s academic department.

Chen has spoken previously on how China’s rare-earth industry is beset with environmental problems, and that no new mines could be allowed in China. He has also said it is in the industry’s best interest for a diverse and stable supply chain to be established.

Rare earths, along with other materials such as indium and lithium, are used in clean energy technologies and a host of devices that include permanent magnets, hybrid and electric car batteries, computer hard drives, smart phones, iPods, LED televisions, energy-efficient lights, lasers, petroleum cracking catalysts and sophisticated military items such as night vision goggles and missile guidance systems.

Rare-earth miners such as Lynas in Australia, Molycorp in the U.S. and IREL in India are moving to bring new plants into production as quickly as possible after China cut its 2011 export quotas of the strategic material and the U.S. Department of Energy warned of critical shortages over the next five years.

World demand for rare earths in 2010 was about 127,000 tonnes, a figure expected to reach 188,000 tonnes by 2015 as clean technology usage increases.

China’s Ministry of Commerce announced on December 28 its rare-earth export quotas for the first six months of 2011 would be 14,446 tonnes, a drop of 11.4 percent on the same period a year earlier. Nominal export quotas in 2010 were already down 40 percent on the 2009 figure.

According to the U.S. Department of Energy’s Critical Materials Strategy report released on December 15, five of the 17 rare earths — dysprosium, neodymium, terbium, europium and yttrium, as well as the processed rare metal, indium – are the “most critical” in terms of supply over the next five years.

The big demand drivers are permanent magnets for wind turbines and battery alloys for electric motors; these two applications alone are expected to account for more than 55 per cent of demand by 2014.

Although China dominates global supply from its vast and heavily polluted Bayan Obo mining region in Inner Mongolia, scores of mining companies around the world are racing to bring new plants on stream. Even so, it will take years for more than a handful of them to begin production, given the environmental constraints they face.

According to mining industry analyst Gareth Hatch of U.S.-based Technology Metals Research (TMR), 17 of about 275 rare-earth projects are at what he calls the advanced stage: four each in Australia and Canada, two each in the U.S., Greenland and South Africa, and one each in Sweden, Kyrgyzstan and Malawi.

Two of those – Mount Weld in Western Australia and Mountain Pass in California – are due to start production this year. Three others – Nechalacho in Canada’s North West Territories, Nolans Bore in Australia’s Northern Territory, and Bear Lodge in Wyoming, U.S., could come on stream between 2013-15.

Another possible source is India, where Toyota Tsusho, a Japanese trading house that is part of the Toyota automotive group company, said last month it planned to build a rare-earth processing plant in Orissa state this year. It aimed to begin shipping up to 4,000 tonnes a year of rare earths to Japan from 2012.

Toyota Tsusho’s project partner is Indian Rare Earth Ltd (IREL), a unit of the state-owned Nuclear Power Corp of India. IREL now extracts uranium and thorium from monazite minerals in alluvial ore deposits along the east coast of India. Rare-earth chloride mixtures are produced as a by-product of this extraction process, and these mixtures will be the raw materials for making rare-earth oxides.

According to Nicholas Curtis, executive chairman of Lynas, the Australian listed mining company which owns Mount Weld, China’s decision to limit exports in 2011 is an opportunity for companies such as Lynas to meet the supply deficit outside China.

He said Mount Weld was the world’s richest known deposit of rare earths. The company planned to concentrate ore at a plant on-site, before shipping it to an advanced processing plant it is building at Kuantan in the Malaysian state of Pahang. The first ore is due to be concentrated in early 2011, with the first feed of concentrate to the Malaysian plant in the third quarter of this year.

In November, Lynas struck a strategic alliance with Japanese trading house Sojitz Corp., to be its exclusive distributor into Japan. Japanese companies process about half the world’s rare earths before exporting the finished products to markets such as Europe and the U.S.

New York-listed Molycorp, which stopped production at its Mountain Pass plant in 2002 in the face of Chinese competition and environmental constraints, is spending US$531 million on a plant upgrade and is due to begin mining fresh ore this year.

In December Molycorp announced separate deals with Japan’s Hitachi Metals and Sumitomo Corp covering the funding, supply and manufacture of rare-earth end products, including alloys and magnets in the U.S.

China’s recent actions in the rare-earths market have prompted a storm of criticism about its control of the supply. That provoked a counter-attack last week from a senior Chinese commentator, Chen Weihua, who lashed out at what he called “the sheer hypocrisy” of the West.  Chen, deputy editor of the China Daily’s U.S. edition, wrote that the state of China’s rare-earth industry typified the serious environmental and social costs that China incurred in its role as the world’s “manufacturing workshop.”

“When China takes action to raise its standards, the West cries foul because the moves hurt their selfish commercial interests,” Chen wrote.

U.S.-based industry veteran Jack Lifton said Chen was “mostly correct.” Lifton, founding principal of Technology Metals Research, told The Australian that there remained a vast cultural gulf between profit-oriented Western businesses and China, where the goal was growth to raise the living standards of the masses.

“I think that China will supply its domestic industry’s needs in total and then export only the surplus, because this is how a command economy works,” he said.

Lifton said he also believed China had already cut back rare-earth element production for environmental reasons as part of a restructuring and consolidation of the sector that was now under way.

Despite the proliferation of long-term agreements signed by Western companies in the past few weeks, Lifton said it was hard to believe that “any significant production of anything other than ore concentrates will be underway by the end of 2011.”

“So I think that prices for rare earths will be set on the spot market by Chinese exporters for one or two or even three more years,” he said.

By ABR Staff Writer – Automotive Business Review – Published: January 17, 2011

Toyota is expected to be on the verge of developing an induction electric-car motor which does not require rare earth metals for its electromagnets.

Toyota’s effort on this would allow the company to become less dependent on China, as the country is the main supplier of these metals, and might also defeat the last year’s price rise of these metals due China’s restricted supply.

Toyota global chief engineer Takeshi Uchiyamada was quoted by the Wall Street Journal as saying the technology that would allow the company not to use the magnets and yet to make a high-performance smaller size motor will come soon.

The permanent magnets used in existing electric-car motors are made from a rare-earth mineral called neodymium.

Toyota has taken many steps to decrease its dependence on China for these metals including the launch of a joint venture to explore rare metals in Vietnam.

Technology Metals Research Illinois founder Jack Lifton said the auto industry purchases 40% of the world’s supply of neodymium and Toyota buys more than any other company.

“There is about a kilogram of neodymium in every Prius,” Lifton said.

Earlier today CNBC ran a series of segments throughout the day on rare-earth metals and associated companies. One such segment featured a very short clip of Gareth, shown during the “Squawk On The Street” program. You can see the video by clicking below:

By Mike Ramsey – Wall Street journal – Published: January 14, 2011

Toyota Motor Corp. is striving to develop a new type of electric motor to escape a simmering trade conflict involving China’s grip on a rare mineral.

The Japanese auto maker believes it is near a breakthrough in developing electric motors for hybrid cars that eliminates the use of rare earth metals, whose prices have risen sharply in the past year as China restricted supply. The minerals are found in the magnets used in the motors.

All electric motors rely on magnets to make them work. The new motor Toyota is working on is based on the very common and inexpensive induction motor, found in such devices as kitchen mixers. Induction motors use electromagnets—magnets that only have their magnetic attraction when power is applied to them.

Most motors used in electric and hybrid cars today use a different type of motor that relies on permanent magnets. These magnets always have a magnetic field—akin to the magnets used to attach things to refrigerator doors.

But the permanent magnets found in electric-car motors, unlike those that hold up the school lunch menu, are made from neodymium, a rare-earth mineral that is almost entirely mined and refined in China.

As car companies race to improve electric and hybrid vehicles, their reliance on metals like neodymium and lithium—used in batteries found in electric and hybrid cars—is raising a host of new geopolitical issues over access to the minerals. The supply of many of these minerals is controlled by China.

Toyota has taken several steps to reduce its dependence on China for the materials, including investing in a lithium venture in Argentina and launching a joint venture in Vietnam to prospect for rare metals like neodymium.

The auto industry purchases 40% of the world’s supply of neodymium and Toyota buys more than any other company, said Jack Lifton, a rare earth materials expert and founder of Technology Metals Research in Carpentersville, Ill. There is about a kilogram (2.2 pounds) of neodymium in every Prius, he said. Toyota declined to comment on this figure.

“It would be a big change in demand for neodymium” if Toyota switched to an induction motor, said Mr. Lifton.

General Motors Co., which launched its Volt electric car last month, also is looking into alternative types of motors. “We have ongoing development in those areas and the induction motors do work,” said Pete Savagian, who leads GM’s hybrid powertrain engineering division.

Continental AG of Germany, one of the world’s largest auto parts makers, said it already has developed a rare-earth-free motor that will be used in an undisclosed electric car due out in Europe this year. This motor uses a variation of an electric motor often found in power plants.

Part of the rationale for developing this motor is to avoid rare earth metals, but it mostly is a move to lower costs, said Mike Crane, who runs Continental’s hybrid and electric vehicle programs.

“Even in the best scenario of supply, these [rare earth-based] magnets are very expensive,” Mr. Crane said.

China produces about 95% of the world’s supply of neodymium and last summer the country began restricting exports. In December, China announced a 67% increase in export tariffs on the metal and has declared new limits on exports this year.

Neodymium prices have quadrupled in the past year, according to Lynas Corp., an Australian company developing a giant mine and refinery for the material.

Rare earth minerals are a grouping of 17 chemically similar elements that are usually found together in ore and are refined and split apart. They are used in magnets and semiconductors and a host of other technologies. The U.S. and Australia have deposits of them but lack the expertise in extracting and refining the minerals.

For Toyota, getting around this barrier is crucial. The auto maker at this week’s Detroit car show announced the expansion of its hybrid-electric lineup by adding two new Prius variants and plans to spread the technology to all of its models in the next decade.

“The technology that would allow us not to use the magnets and yet to make a smaller size, high-performance motor will come soon,” said Takeshi Uchiyamada, Toyota’s global chief engineer.

“We currently have such a motor, but controlling the motor is rather difficult,” he said.

Mr. Uchiyamada wouldn’t say when the motor would be introduced.

Toyota spokesman John Hanson said the new motor could come in the “near term.” He added: “It looks like we could reduce cost, weight and mass and avoid the geopolitical issues with the rare earth metals.”

Elias Strangas, an electrical engineering professor at Michigan State University, said induction motors that serve as the basis of Toyota’s work “are cheap to make and as rugged as you can get, but they are not terribly efficient, and they are big.” Improving them “is kind of a holy grail in motors.”

Prof. Strangas said he had heard rumors of Toyota working on an advanced induction motor, but hasn’t seen a published study on the work. “I would like to see the numbers [on the motor’s performance] to say they are convincing,” he said.

The permanent magnet motor took off only in the past decade as car makers tried to find more efficient and powerful motors for electric vehicles and hybrids.

“But then we discovered they are a bit expensive, and the rare-earth places where they are mined are not too many,” Prof. Strangas said. “We are now trying to revisit very old technology and remove the problems” in induction motors.

At the same time, Toyota affiliate Toyota Tsusho Corp., which imports metals, said in October it would begin working with Vietnamese companies to extract the rare earth metals from deposits there.

A year ago, the same company struck a deal with an Argentinean company to develop a lithium mine to secure a direct source for the key element in advanced electric batteries.

The vast majority of the world’s mined deposits of lithium are in China, Chile, Argentina and Bolivia.

There is pressure on the entire automotive industry to develop better supplies of these materials because of a slew of new and planned all-electric cars, including Nissan Motor Co.’s new Leaf.

Electric cars require much larger motors, with more rare earth metals, than hybrids such as the Prius.

By Mike Alberti – Remapping Debate – Published: January 11, 2011

While the recent controversy surrounding China’s almost complete control over rare earth elements may seem to some like an arcane debate over minerals with hard-to-pronounce names, for many experts and economists it represents a concrete example of a broader long-term failure of United States trade and industrial policy.

Rare earth elements are a set of 17 minerals, some of which are crucial to producing a wide array of high-tech products. They are used in iPads and in flat screen TVs, in wind turbines and in hybrid electric car batteries. These minerals are also needed for the tracking systems of missiles and military drones. Until about 1984, the U.S. mined the majority of the world’s rare earth supply; today it produces almost none. Nearly all of the mining now occurs in China.

From the mid-60’s to the mid-80’s, global rare earth mining was dominated by the Mountain Pass mine in California. The mine closed in 2002, after a series of radioactive wastewater leaks raised environmental concerns, and after increased Chinese production — partially due to state intervention and partially due to a lack of environmental controls — had begun to undercut U.S. prices.

Meanwhile, U.S. manufacturers that relied on rare earths found it easier to be closer to the source, and also relocated. In 2004, a company called Magnequench — a huge producer of permanent magnets that require rare earths and that are crucial components in the guidance systems of cruise missiles — closed its plant in Indiana and moved its facilities to China.

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By Emma Davies – Chemistry World – Published January 2011

Last October, China started building the world’s biggest off-shore wind farm in Bohai Bay, a few hours from Beijing. The country is constructing wind farms on an unprecedented scale – surely good news given its insatiable appetite for coal. But each megawatt of power a wind turbine generates requires up to one tonne of rare earth permanent magnets. The elements used in the magnets – neodymium, dysprosium and terbium – are in short supply and the west is in danger of losing access to them as China’s domestic needs soar.

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