Having worked on a very detailed project covering Rare Earth deposits, production, manufacture, and end use for over two years, I am amazed at the touts who pitch various companies associated with Rare Earths as the next big investment opportunity. There are a number of reasons why the companies they mention by name will have a very difficult time ever turning a resemblance of a profit. Let me begin with just a few basic premises in this post (which I hope to develop into a series of topics related to Rare Earth) that are somehow being completed ignored by the touts, but hopefully will not be overlooked by investors.
–Not all Rare Earth Elements are created equal. There are 17 Rare Earth Elements (REE) in the periodic table; 15 lanthanides (elements 57-71) plus scandium and yttrium (21 and 39), which are included because they are very often found in the same mineral deposits. Each has different chemical properties. Typically, REE are in one of two groups, Light or Heavy. Lanthanum and Cerium are Light REE used to make refractive glass, battery electrode, camera lenses and as fluid cracking catalysts by oil refineries. Neodymium and Samarium, also Light REE, are used to make permanent magnets. Heavy REE, such as Gadolinium, Dysprosium and Erbium are of prized interest for their uses in specialized magnets, lasers, and phosphors. Because of their unique properties and uses, Heavy REE are very desirable. There are also found in the smallest quantities, some not all in every deposit.
–Not all Rare Earth Mineral Deposits are created equal. It shouldn’t be a surprise to anyone that individual deposits of rare-containing minerals hold vastly different amounts of each of the 17 elements. With the exception of the Ion Absorption Clay Chinese mineral deposits known as the South China Clays, which are almost exclusively heavy REE, all other deposits have not only far more of the Light elements, but very little of the most desirable heavies. In addition to the actual rare earth element content of various deposits, there are differences in the minerals in those deposits that contain the rare earth elements themselves. Monazite, the most common rare earth containing mineral in the United States can contain anywhere from 6% on up of Thorium, a radioactive element that must be handled, and somehow disposed of, during the initial concentration phase of the separation process. The major deposit in Australia, at Mt. Weld, is actually a super-gene monazite, which not only has a relatively high thorium content but also is more difficult to separate owing to the stronger molecular bond. The majority of identified deposits in Canada are silicates, which have molecular bonds that are even more difficult to separate. The monazite deposit in South Africa has such a high radioactive thorium content, up to 18%, that workers in the planned open pit mine will not be able to work more than 2-hr shifts due to radiation concerns. Contrasted, outside of the ion adsorption clays in southern China, the primary rare earth containing mineral in China is Bastaesite, which contains no radioactive elements and as a result, tailings from the phase 1 concentration are easier to handle.
So, the first questions one need to ask when researching these touted companies are: What is the base mineral of your deposit and how does it assay (light versus heavy). If Monazite, the typical Monazite-CE ore contains 45-48% cerium, approximately 24% lanthanum, about 17% neodymium, 5% praseodymium, and minor quantities of samarium, gadolinium, and yttrium. If a company has a monazite mineral deposit, for example, and it assays at .05 praseodymium, that company will need to mine 20 metric tons of ore to end up with 1 ton of praseodymium. Not bad you say. What if that deposit assays at .001 for Yttrium (a very desirable element for use in military lasers). Now, the company needs to mine 1000 tons of ore for 1 ton of Yttrium. At a conservative average of 6-12% thorium content for Monazite ores, you will also have 60 to 120 tons of a radioactive material (thorium) as a bonus to do something with. Permitting for ordinary mine tailings disposal (gold/silver) is difficult enough but disposing of radioactive materials is a whole different adventure. The super-gene monazite deposit at Mt. Weld Australia is another story by itself. The company working this deposit must transport the ore 1,000 km to the port of Perth. A separate facility had to be built because of the high radioactive content (Thorium). Then the ore is shipped an additional 2,000 km to Malaysia for processing. Here is where it gets interesting. The firm indeed obtained a permit to build the processing facility (over the protests of locals who remember the last time this processing was done in Malaysia by the Japanese.) BUT, has yet to obtain a permit to operate the facility. So just how much processing will be done this year???
Moving along, how (and where) do these companies plan to concentrate and separate the individual elements? Currently there are ZERO facilities in the United States, Canada, Australia (hence shipment to Malaysia), Europe, or South America to chemically separate the individual elements. There is one small facility in Estonia and the rest are in China. While I said, “chemically separate” most people involved with the process will agree that there is an equal amount of alchemy involved in the extremely complex process of separating each individual element from its neighbor. Just like with separating PMGs whereby you remove the Rhodium, next the Iridium, then Ruthenium and Osmium, the Palladium, leaving the Platinum, REE elements are separated one by one. This results in a whole lot of time, a lot of chemicals (sulfuric acid or nitric acid if you are Russian), and a lot of adjustments along the processing line. Have any of the touts seen one of these facilities? They range from several hundred separate processing tanks to over a thousand. The concentrate moves from tank to tank to be worked and for the last elements separated, it can take 12 months! If all you are looking for is Lanthanum, you can conceivably quit after the first separation and dump the remaining ore. If, however, you wish to gather up the small amount of Erbium that happens to be in the ore, you need to first separate 11 other elements. These elements are one atomic number apart from each, have strong bonds and it takes a pretty good amount of acid boiling to separate. Much like oil refineries are geared up to process specific types of crude oil feedstock, all current rare earth separation facilities (even in China) are set up for specific ores traditionally fed to the plant. For example, the lone non-Chinese separation facility in Estonia has processed loparite ore tailings from the Russian Kola peninsula Titanium mine since its inception. The process line (stainless steel tanks into which nitric acid is poured and heated at different temperatures along the way) is geared for that specific ore which has a known and specific element content. Much as a refinery geared to refine Bonnie Light Crude from Nigeria would find it almost impossible to refine Heavy Saudi Crude, this Estonian separation plant cannot process monazite ore without a massive change in the process line. Talk of multiple ore refining capabilities, a “washing machine” type dial to process any and all ores containing rare earth elements just is not feasible despite what is being touted.
In summation, Rare Earth “wannabe producing” company stocks are being hyped with little regard to the inherent differences they possess in mineral bodies, REE content by element, and permitting problems. In future posts, I will put forth research behind such premises as: “Can a Stand Alone RE Producer actually survive” (China is moving to an integrated Re market whereby the country’s largest steel producer, copper producer and aluminum producer are each taking a piece of the RE market), “What is China Really Trying to Accomplish with Rare Earths”, “Recycling versus Re-use”, “RE Stockpiles or Take-Aways, the Biggest Bang for the (taxpayers’) Buck”, and “Thorium, Can it Replace (or at least supplement) Uranium as a Nuclear Fuel Source and Give Life to the U.S. RE Industry at the Same Time?”