North American Companies Involved In The Availability Of The Heavy Rare Earth Metals And The Future of High-Tech Manufacturing

As a nineteenth century British reporter might have put it, I have lately been in receipt of several letters (emails, actually) concerning my recent discussion of the credibility of the recently published document purporting to be a Chinese “plan” to suspend the export of the “heavy” rare earth elements (HREEs). This is part of a general reduction, in progress for the last five years, in the export allocations of all of the rare earths, produced in China – said (continued) reduction to be carried out over the next five-year plan due to be promulgated in 2010 for the period 2010-2015.

I am reliably informed that the procurement area of the US Department of Defense (DoD) takes the position that even if the globe’s sole supplier, the People’s Republic of China, severely reduces, or eliminates, the export of rare earths, the free market will still dictate that increasing price and demand will somehow trump the decisions of the China State Council, even in China. It is believed that the “small” amount of neodymium and the even smaller amounts of dysprosium and terbium needed by the DoD will still be available. Reasoning with the logic that the DoD procurement officers were taught in their Ivy League Business School classes, they actually conclude that “the small” amount of rare earth metals needed for defense production will always be available, because (drum roll) they always have been so far”. I hope all of you, dear readers, feel as secure as I do with reasoning like that driving the DoD’s attitude towards strategic and critical metals procurement.

A letter, yesterday, from a far more thoughtful (more so than any DoD procurement officer, that is) colleague was really the driver for this note. This gentleman, who I believe is the single best mining analyst in the business when it comes to detailing and deconstructing a balance sheet and/or the financial implications of an announcement of the discovery of just what everyone has been looking for (since yesterday) in an old core, or at a new claim, wrote to ask me what all the fuss about HREEs is about.

He wrote “….what do you make of this supposed plan to restrict the export of HREEs from China? there is plenty of HREE outside China, if the will to fund its development evolves (i.e. Thor Lake, Bokan, Kipawa, Strange Lake).” (my italics).

Note well, dear readers, that I believe that my brilliant analyst friend is much more savvy and introspective than the DoD procurement official.

However it must be noted that all of the known deposits mentioned in the quote above are either in Canada or in Alaska.

In regard to the secure sourcing of the technology metals, please do not ever vote for any American politician who says anything detrimental about US/Canada trade. That woman or man is a far worse enemy of the US economy than the People’s Republic of China. Each day we increasingly need Canada’s rare metals and energy minerals, as well as Canada’s attitude towards the development of its natural resources, to feed the deficit in all of those metals, minerals, and attitudes that pervades what passes for long term strategic thinking, among the politicians and financiers of the USA.

In any case, I am going to hazard an educated guess as to the potential of each of my colleague’s above named HREE rich deposits to be brought into production, in time to stave off the total loss of critical manufacturing capacity in the US and Canada for cleantech and military applications of REE-based technologies:

In order of nearest (in time) production:

1. Avalon Rare Metals (Thor Lake, NWT);
2. Great Western Minerals Group (Hoidas Lake, Saskatchewan and other Eastern Canadian deposits);
3. Ucore Uranium (Bokan Mountain. Alaska); and
4. Quest Uranium (Strange Lake, Quebec).

For the most current and best discussions of the financials of the above companies, you should go to Kaiser Bottom-Fish Online; it is a subscription site but well worth it.

As to actually producing the HREE rich ores and refining them it is important to note that no facilities exist today in North America that are extracting and/or refining HREEs to separate and purify them for high technology end uses. All such facilities today are in the PRC. Notwithstanding this fact, note well that all of the mining companies on the list above are aware of this fact and are in various stages of designing and proving processes for the extraction, concentration, separation, and refining of the HREEs.

It will be necessary to develop, prove-out, and construct at least one North American facility to produce the rare earth metals and their alloys, in metallic form, before anyone here in North America can make REE-based permanent magnets for any application. Great Western Minerals Group (GWMG) has a facility capable of producing rare earth metal alloys for battery (nickel metal hydride) production in Troy, Michigan, and a facility producing samarium cobalt and neodymium iron boron magnet “alloys” in the UK. Ideally these facilities could be conjoined in the USA, or Canada, and technologically enlarged to produce rare earth metals and alloys from materials supplied by not only GWMG’s mines but also those of Avalon, Ucore, and Quest. The additionally-needed basic “light” rare earth elements (LREEs) could and will hopefully be sourced from Molycorp Minerals‘ Mountain Pass operations and, in the future, from the operations at Lemhi Pass, Idaho, of Thorium Energy.

Making North America self sufficient in HREEs, and LREEs, will take not only the will to fund the development of all of the public and private deposits named herein but also a determined effort to find and encourage the specialized chemical engineering that will be required.

Gee, if only the DoD would dedicate a few million dollars, of its half-trillion dollar budget (!) to the funding of a rare earth processing development group at a public or private department or institution. Then we could save billions of dollars of industry and defense jobs and secure our safety. We need to elect people for whom those goals are a priority and who see the long term commitments necessary to achieve our goals.