Rare earth elements summary

Rare Earth Elements Summary 1

What are Rare Earth Elements?
 Rare earth elements (REE) are the 17 members or a collection of the 15 lanthanide elements
(Atomic Numbers 57-71) plus scandium and yttrium which tend to occur in the same ore
deposits and exhibit similar chemical properties.

 In order of Atomic Number, the rare earth elements are:
1. Scandium (A.N. 21)
2. Yttrium (A.N. 39)
3. Lanthanum (A.N. 57)
4. Cerium (A.N. 58)
5. Praseodymium (A.N. 59)
6. Neodymium (A.N. 60)
7. Promethium (A.N. 61)
8. Samarium (A.N. 62)
9. Europium (A.N. 63)
10. Gadolinium (A.N. 64)
11. Terbium (A.N. 65)
12. Dysprosium (A.N. 66)
13. Holmium (A.N. 67)
14. Erbium (A.N. 68)
15. Thulium (A.N. 69)
16. Ytterbium (A.N. 70)
17. Lutetium (A.N. 71).

 The rare earths are actually metals and not really rare (except for radioactive promethium).
Cerium is the 25th most abundant element, about as common as copper. However, because of
their geochemical properties, they are usually dispersed and economically exploitable deposits
are scarce.

 Rare earth deposits are found in many types of geologic settings – veins, gneisses and
migmatites, skarns, pegmatites, alkalic rock complexes and related carbonatites. They are
essential components of more than 100 different minerals and present in many more.
Unconsolidated secondary deposits, including sea-beach placers, river valley placers and deltaic
placers represent by far the largest number of mineable concentrations of rare earth minerals.
Most consolidated sedimentary rocks have very low REE content, but with some important
exceptions – phosphorites, fossil placers and certain ancient conglomerates.

 Rare earths are used for many purposes. Based on reported data through July 2009, the
estimated 2009 distribution of rare earths by end use, in decreasing order, was as follows:
chemical catalysts, 22%; metallurgical applications and alloys, 21%; petroleum refining
catalysts, 14%; automotive catalytic converters, 13%; glass polishing and ceramics, 9%; rare-
earth phosphors for computer monitors, lighting, radar, televisions, and x-ray-intensifying film,
8%; permanent magnets, 7%; electronics, 3%; and other, 3%.


Where are Rare Earth Elements found and how are they produced?

 Up until 1948, most of the world's REE came from placer sand deposits in India and Brazil.
During the 1950's South Africe was the leading source, from veins of REE-bearing monazite.
From the 1960's until the 1980's, the Mountain Pass mine in California was the main producer.

 China currently produces 97% of the world supply of REE, largely as byproducts from the
Baotou iron mine in Inner Mongolia. However, large amounts of REE are also produced from
illegal mines in Guangdong and the exact situation is unclear. Some REE is smuggled to
Vietnam for re-export. The Chinese government is attempting to control this situation and
develop a strategy for systematic management of REE exploitation.


 More than half of rare earth consumption is also in China.


 Thousands of Chinese scientists are working on REE research and the Chinese government
hopes to concentrate on production of high-value products based on REE, rather than simply
exporting them in mineral form.

 Mining of REE is done using standard methods, but the milling and refining are expensive,
complex, energy intensive and can cause serious environmental damage. A notable problem is
the frequent presence of small amounts of uranium and thorium, which remain as radioactive
tailings. Recovery and processing is the biggest REE problem.

 There are usually three stages to the REE recovery process -

(1) Mineral Dressing –Crushing and grinding
 Froth flotation, magnetic separation, gravity concentration, electrostatic
concentration, etc.

 Typically recovers 80% of REE, upgrades ore grade by 5 times.

 The crushers; grinding mills; flotation equipment; and the magnetic,
gravity, and electrostatic separators are all generally off-the shelf items
but configured in a way that best suits the ore in question. No two ores
respond the same way and so all rare earth mineral dressing plants are
different. If the ore from one deposit were processed through a plant
designed for another ore, recovery would be far below optimum.

(2) Chemical Upgrading -
 Original minerals are chemically attacked to allow further upgrading and
separation of the rare earth elements.
 The chemical attack processes may include roasting, salt or caustic
fusion, high temperature sulphation, acid leaching as required to
decompose the minerals in a given concentrate and allow the rare earth
elements to be dissolved.

 The leach solutions can then be processed using selective precipitation,
solvent extraction, or ion exchange processes to remove most of the
impurities and produce higher grade intermediate chemical compounds
suitable for refining.

 The nature of the final product of the chemical upgrading process
depends on the exact composition of the mineral concentrate, market
demands, and the size of the operation.

 The pieces of equipment used in the chemical concentrator are generally
standard, off-the-shelf, items such as kilns, roasters, agitated tanks, filters,
and solvent extraction equipment. These are put together in a
configuration suitable for processing a particular concentrate. Since each
concentrate has a different assemblage of minerals, the flowsheet of each


chemical upgrading plant is different. A chemical upgrading plant could
be designed to handle feed materials from different mineral dressing
plants provided that they were very similar in mineralogical and chemical
composition. However, such similarities are very unusual and chemical
upgrading plants designed to handle several different feed materials are
not very likely and are not presently used.

 Transportation of mineral concentrates to a distant chemical upgrading
plant is possible if the grade of the mineral concentrates is high and
distances not too great.

(3) Refining -
 The chemical upgrading plant referred to above generally eliminates most
impurities and produces one or more mixed rare earth precipitates. These
have to be further processed to give the 99.9% purity, or higher, products
needed by the manufacturers of phosphors, lamps, magnets, batteries, and
the other products that require rare earths to function efficiently. The
typical rare earth refinery uses multi-stage solvent extraction plants to
effect the necessary separation and purification processes. The refinery
plant can be combined with the chemical upgrading plant described
earlier but can equally well be a totally different plant separated by many
hundreds of kilometers from the chemical upgrading plant.

 The equipment used for purifying and otherwise preparing the rare earths
include solvent extraction units, filters, furnaces, special clean handling
areas, and sophisticated analytical equipment. These are common to all
refining plants but, again, sized and configured for the composition of the
feed material the plant is designed for. Some flexibility in feed
composition is tolerable but there are limits to the range in feed
composition. For example, a plant designed to purify light rare earth
precipitates would encounter difficulty handling an increased proportion
of heavy rare earths.

 The products of the chemical upgrading plants are high grade
precipitates, say 50% rare earth oxide content, that can be transported
great distances without adding much cost to the commodity. Therefore
centralized refining plants are possible and would offer the advantage of
scale. They would need to be flexible with respect to feed composition
and product mix.


What is the China Situation Regarding Rare Earths?
 In 1992, Deng Xiaoping, the architect of China’s economic transformation, declared ―There is
oil in the Middle East; there is rare earth in China.‖. China has about a third of the world’s rare
earth deposits – far more than any other country. This relative abundance, combined with low
extraction and processing costs — reflecting both low wages and weak environmental standards
— allowed China’s producers to undercut the U.S. Industry.
 China feels entitled to call the shots because of a brutally simple environmental reckoning: It
currently controls most of the globe’s rare earths supply not just because of geologic good
fortune, although there is some of that, but because the country has been willing to do dirty,
toxic and often radioactive work that the rest of the world has long shunned.
 In the early 1990's, Chinese REE exports were of very poor quality, but cheaper than
competitors' products. Since then the quality has improved greatly.
 Processing and extracting rare earth elements is a dirty business. The environmental toll of rare
earth mining in China is high. In Bayan Obo, site of the world’s largest rare earth mine near
Baotou in Inner Mongolia, air is hard to breathe, and toxic and radioactive substances have
stained the soil and contaminated the water supplies. Half of the global supply of rare earths
comes from a single iron ore mine there. After the iron is removed, the ore is processed at
weather-beaten refineries in Baotou’s western outskirts to extract the rare earths minerals. The
extraction cost is very low and historically about three times as much REE was thrown away as
was recovered, being seen as just a minor byproduct of iron mining.
 The Baotou refineries and the iron ore processing mill pump their waste into an artificial lake.
The reservoir, four square miles and surrounded by an earthen embankment four stories high,
holds a dark gray, slightly radioactive sludge laced with toxic chemical compounds.
 Much of the radioactivity associated with rare earths comes from the element thorium, which is
not a rare earth but is typically found in the same ore. With the exception of unusual clay
formations in southern China that contain medium and heavy rare earths with virtually no
thorium, every other known commercial-grade rare earth deposit in the world is laced with
thorium.
 The mines of southern China are essentially free of thorium and have rare earths that are easily
separated from the clay by dumping the ore in acid. But this relatively easy process, and soaring
prices on the world market, has led to the development of many illegal mines, which sell to
organized crime syndicates that pay for rare earth concentrate with sacks of cash.
 Rogue operations in southern China produce an estimated half of the world’s supply of heavy
rare earths, which are the most valuable kinds of rare earth metals. Heavy rare earths are
increasingly vital to the global manufacture of a range of high-technology products — including
iPhones, BlackBerrys, flat-panel televisions, lasers, hybrid cars and wind-power turbines, as
well as a lot of military hardware.

 At least 96 percent of the most crucial types of the so-called rare earth minerals are now
produced in China, and Beijing has wielded various export controls to limit the minerals’ supply
to other countries while favoring its own manufacturers that use them. Starting in 1999, the
Chinese government put increasingly more severe restrictions on the export of REE's, including
export quotas and, during a dispute with Japan, a ban on exports. This caused much alarm in


western countries and industrialized Asian nations.

 A report by the United States Energy Department presents a fairly gloomy assessment of the
United States’ ability to wean itself from Chinese imports. For as long as the next 15 years, the
supplies of at least five rare earths that come almost exclusively from China will remain as
vulnerable to disruption as they are absolutely vital to the manufacture of small yet powerful
electric motors, energy-efficient compact fluorescent bulbs and other clean energy technologies.

 The five REE's are medium and heavy rare earth elements of which China mines an estimated
96 percent to 99.8 percent of the world’s supply: dysprosium, terbium, neodymium,
europium and yttrium.

 Beijing, intent on maintaining its global chokehold on all rare earths, has begun an energetic
campaign to crush the crime syndicates that dominate the open-pit mines in northern
Guangdong Province, home to most of southern China’s mining areas for heavy rare earths.
Prices have soared for rare earth elements mined almost exclusively there: dysprosium,
terbium and europium.

 Meanwhile, China’s own fast-growing manufacturing industries now consume more rare earths
than the rest of the world combined. And Beijing has done nothing to curb that domestic
demand. It is predicted that, at end of 2015, China will no longer be exporting rare-earth
metals.China will essentially have shut off exports of the minerals because its industries will be
requiring everything produced there. Analysts expect demand for the metals to skyrocket as
they are used in hybrid cars to preserve magnetic properties of metal alloys at high
temperatures. China may soon need to import some kinds of REE's.
 China realized the value in its rare earth resources early on. If you look at China’s rare earth
industry, you will see that it has undergone a major transformation. China, which once focused
on exporting rare earths in their raw forms, has shifted its end goal from production to
innovation. In the 1970s, China was just exporting rare earth mineral concentrates. By the
1990s, it began producing magnets, phosphors and polishing powders. Now, it is making
finished products like electric motors, batteries, LCDs, mobile phones and so on.
 Through all the effort that the Chinese government has put into the industry, China has accrued
tens of thousands of experts working on the research and development of rare earth elements.
Meanwhile, the numbers of rare earths scientific experts in the United States has diminished
and pales in comparison.
 The Chinese government has announced plans to develop a unified, systematic policy to make
best use of REE's, balancing economic development, environmental preservation and prudent
exploitation of REE resources. In January 2011, the government announced the establishment
of 11 state-planned rare earth mining zones in Jiangxi Province, The 11 mining zones have a
combined area of 2,500 square kilometers, with rare earth reserves estimated at 760,000 tonnes.
 It seems unlikely that China will continue to be the principal supplier of REE's to the rest of the
world, even at much higher prices, and may become an importer within a few years. Reliable
sources of REE must be developed outside China.


What is the Supply and Demand Outlook for Rare Earth Elements?

 REE's are critically important to the modern economy, especially in the developing ―green
economy‖. Demand is expected to rise steadily, although total consumption will still be
relatively small. 2010 world consumption was about 130,000 tons (about 50,000 tons outside
China). By 2015, world demand could reach 220,000 tons (77,000 tons outside China). It is
predicted that, unless new sources can be developed, the world will soon face a shortage of
40,000 tons/year.

 Over the past few years, the American and European economies have had relatively hard times,
but the price of oil has remained strong. This is because supplies of cheap (i.e. easily recovered)
oil are starting to run out, while China and many other formerly poor countries are demanding
more oil. The same trend, world demand for resources exceeding easily available supplies, is
affecting water, food, copper, iron and many other necessary things. So, it is not surprising that
REE's are in high demand.

 China has the most (37%) and is the world's main supplier of rare earth elements, but will
increasingly use them within China, to create value-added products of greater and greater
complexity. Imports may well be required from other countries.

 Next to China, the country with the largest REE reserves is said to be Russia (19%) , but the
U.S. Dept. of Energy feels that Russia too may restrict the export of REE's for political reasons.

 A 2009 USGS report estimates that Mongolia has 17% of world REE reserves, second only to
China. This sounds reasonable, as the main Chinese production area, Baotou, is close to the
border with Mongolia. The future role of Russia and Mongolia in REE supply is unclear, but
both seem to have large resources.

 The United States and other western countries, as well as the industrialized countries of Asia
have become alarmed by the REE policies of China, which are seen as unpredictable and
aggressive. There is a strong political and economic will to develop sources in more secure
areas.

 The mines most likely to be opened in the near future are owned by Lynas Corporation (in
central Australia) and the re-activated Mountain Pass, California mine of Molycorp Minerals,
LLC. Both are expected to begin operation in 2012. However, both deposits contain mostly
lighter REE's, while the heavier REE's are in greater demand.

 There is particular concern about supplies of dysprosium, terbium, neodymium, europium
and yttrium, which are vital to modern technology, but produced almost exclusively in China.
There is no possibility of secure supply from sources outside China at the present time, and
perhaps for the next 15 years or more.

 During 2010, there was great excitement on stock markets, as many junior mining companies,
especially Canadian companies, announced plans for REE exploration and development. In
2011, investors have been more picky, realizing that only a few companies have serious


prospects. Analysts predict that only about half a dozen companies will survive. Companies that
can come on stream (in full production) within the next 5-6 years will likely have an advantage.

 Quality of ore deposits, metallurgy and processing capability are some of the most important
considerations. Environmental considerations will also be important, as the processing can be
very dirty. This will certainly delay and possibly stop new REE mining and processing in
Canada and the United States.

 At the moment, there is very little recycling or REE's, although large potential reserves exist in
electronic scrap and obsolete computers/mobile phones. This resource will certainly be
developed, but will not reduce the demand for new REE supplies very much.

 There is considerable opportunity for substitution and reduction, so that demand for REE's can
be reduced somewhat. If prices remain high, customers will surely find ways to reduce their use
of REE's. There may be other costs, in the form of reduced efficiency. The example of silver
comes to mind. When the price of silver rose to excessive levels in the early 1980's, companies
soon found ways to reduce their use of it. When the price dropped, consumption of silver rose
again. The same will probably happen with REE's.

 Most likely, new suppliers of REE's will appear within the next few years, pushing the price
down and relieving fears of critical shortages. Already there has been talk of a REE ―bubble‖,
and perhaps this is true. Financing, processing and environmental factors will be almost as
important as geology in the emergence of new suppliers.

 Although presently known reserves are limited, a report by the USGS states, ― Undiscovered
resources are thought to be very large relative to expected demand. A very large resource
enriched in heavy rare-earth elements is inferred for phosphorites of the Florida Phosphate
District.

 When and if the new supply enters the market, analysts expect that China will drop its REE
price and flood the market. This could cause prices to fall below the cost of production for non-
Chinese operations and create considerable havoc in REE markets.

Conclusion
Supply of rare earth elements, especially the heavier elements, is threatened by excessive concentration
and restrictions on export from China. This is difficult to solve quickly, but within 5-15 years,
development of new sources, conservation/salvage/recycling, substitution and new technology will
likely bring REE prices down sharply. However, the long term trend will likely be higher prices for rare
earth elements and many other natural resource products.

Rare earth elements summary

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