This week saw the Technology and Rare Earth Metals for National Security and Clean Energy meeting [TREM’10] take place in Washington D.C.. The meeting comprised two intense, packed days of presentations, panel discussions and candid round table sessions on a variety of themes and topics associated with rare earth elements and other technology metals [in particular lithium].
I tend to scribble notes furiously at such events, and ended up with 30 pages of semi-intelligible scrawl. I can’t simply regurgitate all these notes here today, or hope to cover every single speaker. I will instead share a few quotes, comments and observations made by some of the speakers on the first day, that were particular “personal take aways” for me, some of which may not have had much exposure elsewhere.
From Gal Luft, Executive Director of the Institute for the Analysis of Global Security [IAGS]:
- Energy and security polices must have concurrent materials policies, and the issue of dependence must be addressed. How does such dependence affect foreign policy? As a case in point, 50% of the world’s cobalt comes from the Democratic Republic of Congo, a country that has suffered a war that has lasted longer and claimed more lives than the Holocaust.
From Keith Delaney, Executive Director of the Rare Earth Industry and Technology Association [REITA]:
- China long ago recognized the value intellectual capital – the central government has long supported an advanced curriculum in rare earth sciences which has produced thousands of technical professions now employed in the rare earths industry.
- The growth of disposable income in China is driving internal demand for rare earths; China must also tackle the task of creating 300 million new jobs over the next 20 years as the population continues to grow.
From Clint Cox, President of The Anchor House:
- There have been as few as 5-6 specific rare earth minerals that have been successfully processed in the past. Many of the new deposits being developed at present, contain less well known minerals that do not, as yet, have established methods for processing.
From Dudley Kingsnorth, Executive Director of Industrial Minerals Company of Australia [IMCOA]:
- Constructing rare earth production facilities are capital intensive projects; a capital investment of over $40 is required for each 1 kg of annual production capacity [i.e. a facility capable of separating 10,000 metric tonnes of rare earths per year, would likely require over $400 million of capital investment].
- Heavy rare earths elements [HREEs] are particularly complex to separate; the production of terbium, for example, may require over 1,000 distinct stages to attain the desired purity, and such processing could take over 30 days from start to finish.
From Constantine Karayannopoulos, President & CEO of Neo Material Technologies:
- We are currently in a rare earths bubble, with most of the reported 200 projects or so having little to no chance of ever coming to fruition
- It is important to determine what is and what is NOT part of the so-called rare earth problem: it is the Chinese monopoly in the market that is a problem, not China itself. Capacity in China is also not a problem [at least for light rare earth elements [LREEs] such as lanthanum, cerium and neodymium].
- The so-called Baotou Strategic Reserves will not be drawn from existing final production; currently around 20% of the tailings from the iron ore plants in Baotou are used for the extraction of rare earths. The rest gets mixed with other tailings and stored in large tailing ponds. The new Reserve program gives the producers in Baotou permission to extract rare earths from 100% of the tailings going forward. Any so-called stockpile will actually be in concentrate format.
- Tax payers in the USA should not be paying for the construction of rare earth mines or processing plants; this is a job for the market. If Lynas was able to convince J P Morgan to raise hundreds of millions of dollars for new operations, it can obviously be done.
- In some of these discussions, an important question needs to be addressed: if a company does only a small percentage of its business with the defense supply chain, should the company’s responsibilities to its shareholders get overridden by a perceived responsibility to the country – should companies be forced to lose money, because of larger “national” interests?
From Irving Mintzer, Principal of MEG:
- Just opening new rare earth mines will not be enough to solve ongoing problems; companies will still be lured to China. The Federal government should lead the way by encouraging national laboratories to work on ways to reduce the amount of rare metals needed for particular applications; they also needed to re-energize recycling and recovery efforts.
From Jim Greenberger, Executive Director of the National Alliance for Advanced Technology Batteries [NAATBatt]:
- In order to advance the development of electric vehicles, the issue of battery ownership has to be addressed. One solution could be to get the utilities to see batteries as electrical devices [that are ultimately part of the electricity generation “ecosystem”].
From David Sandalow, Assistant Secretary of Energy for Policy and International Affairs at the US Department of Energy:
- Supply constraints are not static; strategies for addressing shortages of strategic resources are available, if we act wisely. We can invest in additional sources of supply, we can develop substitutes and we can re-use materials and find ways to use them more efficiently. We can consider the use of stockpiles and strategic reserves. Not every one of these strategies will work every time. But taken together, they offer a set of approaches we should pursue as appropriate whenever potential shortages of natural resources loom on the horizon.
- “The Department of Energy will develop its first-ever strategic plan for addressing the role of rare earth and other strategic materials in clean energy technologies. The plan will apply the approaches described above and draw on the strengths of the Department in technology innovation. We will build on work on these topics already underway, including in DOE’s national labs, and work closely with colleagues from other agencies throughout the U.S. government. We will solicit broad public input, including from the stakeholders and experts here in this room.” [ Assistant Secretary Sandalow’s entire speech is available from here ].
From Rick Lowden, Senior Materials Analyst with the Office of the Deputy Under Secretary of Defense for Industrial Policy:
- His office is doing their own study of the uses of rare earths in the defense supply chain, and has engaged the USGS to run the project. They plan to finish up the report by September 2010. The widespread use of “commercial off the shelf” components and sub-systems at all levels of the defense supply chain means that it may be impossible to known the true origin of every metal, material or comment.
- Foreign investments in US companies are not always a bad thing. One viewpoint is that it shouldn’t matter so much who owns a specific production facility, if the production takes place in the USA. If a foreign entity attempted to close down or to re-locate a critical production facility, the US government would have the option to step in.
From Paula Stead, Reconfiguration Program Manager with the Defense National Stockpile Center:
- As part of an attempt to determine the materials requirements of the defense supply chain, the Center deconstructed 24 different weapon systems in order to determine just what was in there.
- The Defense National Stockpile is to be reconfigured into the Strategic Materials Security Program. The goal is no longer to simply massively stockpile critical materials, but to “insert” the Program into the supply chain, when the need arises.
From Chris Henderson, US Department of Defense’s Office of Net Assessment:
- The Department of Defense does not track the usage of technology metals at the elemental level. In the long term China is not going to be a problem, and in the near term, the market will sort the current challenges out.
- The USA as a democracy is not particularly good at implementing “top-down” policies, in the way that China’s central government appears enacts policy; we shouldn’t assume, however, that China does a particularly good job in implementation such an approach either, because of the lack of transparency.
That’s it for the first day of TREM’10. I’ll cover my “take aways” from the second day of the conference in my next article.
[First published at RareMetalBlog.]