Rare Earth Demand Rises, No Supply Increase Seen Outside China

by Admin on February 2, 2010 · 8 comments

in Event Reviews, In The Media, Rare Earths

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by Jade Davenport – MINING WEEKLY– Published: Feb 1, 2010

Demand for rare-earth metals was increasing “exponentially”, primarily driven by demand for new technology, independent consultant and commentator Jack Lifton said on Monday.

He told delegates attending the 2010 Mining Indaba in Cape Town that 2010 was already shaping up as the year of rare metals.

Rare-earth metals are critical technology metals used in the manufacturing of hybrid cars, super alloys used in the defence industry, cellphones, large wind turbines, missiles and computer monitors.

Lifton said that rare-earth metals were the “newest great interest” amongst investors, primarily the result of growing demand.

The demand for rare-earth metals had resulted in a significant increase in the number of junior miners.

In the last year alone, Lifton stated that more than 100 junior miners have announced over 150 different rare-earth mining plays.

These were just the private ventures that have gone public as initial public offerings, or have changed the direction of their existing listed entity, to take into account rare earth “discoveries” or acquisitions.

Interestingly, Lifton noted that the rising demand had not increased supply.

The probability of an actual supply increase is dependent on at least a dozen variables, none of which had to do with the share price of the junior miner being analysed, he said.

The supply of rare earths during the next decade, could only be maintained and increased by those which were already producing rare earths, or those that had produced them before and could reactivate their mines, or miners that had been developing good properties for many years already.

Significantly, Lifton predicted that there would be no increase in rare-earth metal production outside China. The Asian giant currently accounted for 95% of rare earth-metal production.

Copyright © Creamer Media (Pty) Ltd

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1 Jack Lifton February 2, 2010 at 8:32 am

I’ve had a couple of emailed comments querying the penultimate sentence of the article above, in which I was quoted as predicting “that there would be no increase in rare-earth metal production outside China”.

I was of course referring to the short term. Over the next decade, any increase or addition to REE production will only come from a short list of producers, former producers, and producers already in progress. Which of them will be commercially successful I don’t know, so I make my estimates based on my knowledge of these companies, their operations and their deposits. The world surely needs their product to avoid a reversal of global economic expectations, which in the past has been a precursor to international envy and ultimately armed conflict.

2 Andrew February 2, 2010 at 9:07 am

Thanks Jack. Are there any REE mines being talked about in South Africa?

I think we also need to talk about certain Rare Earth’s like dysprosium, which may become in short supply, and is key for hybrid vehicles, wind power, etc. What deposits have enough of these really rare rare earths? Do the Mongolian deposits have enough terbium and dysprosium for our future needs?

Also which deposits make sense? Where are the best grades of HREE and can these be easily refined and brought to market? It almost seems like the Western world woke up to this problem of supply a little to late. With enough investment can we make up for lost time?

Also can we mine these RE deposits in a “green way”? What has China done to the Mongolian landscape and rivers providing these elements for our green technologies. Can they be brought to account?

Keep up the good work!

3 Don Gratz February 2, 2010 at 2:40 pm

Thank You for your updates. What is your opinion of Hudson HUD.

4 Byron February 2, 2010 at 8:00 pm

Hello Jack,

Thank you for your update. Now , a few questions for you, Obi Wan:

1. What refining and alloying facilities are currently available to the rare earth industry OUTSIDE of China for processing rare earth ores?

2. What is the status of any plants outside of China and their potential processing capacities which are currently mothballed/planned/or under construction?

3. What time frame is required to bring any of the above facilities online?

4. Can the same refining facility process both heavy and light rare earth ores?

Best regards,
Byron

5 geoff alford February 2, 2010 at 9:50 pm

Dear Jack,

Some people in OZ are confusing “production” with “mining” REEs, and hence write you off as a self-confessed expert.

Perhaps it would be useful to use “production (i.e. processing and concentrating)” in order to avoid confusion.

Regards,

Geoff Alford

6 Wendy Durham February 3, 2010 at 11:32 am

Andrew –

Depends what you mean by “OUR future needs”. China may be mining enough HREEs for their own needs, but the whole difficulty is that (a) export quotas are being reduced annually, (b) there is a real possibility that the HREEs most in demand may not form part of future export quotas as China’s own demand for them grows and (c) demand is growing exponentially outside China as well as within, and there is as yet no non-Chinese source of any REEs to speak of. And don’t forget (d) there are virtually no facilities outside China for the downstream processing of REOs into the useful metals, alloys and components that are now in so much demand.

This is the point Jack makes over and over – even if the West can bring copious supplies of REOs onstream from new or existing mines over the next 2-5 years, what are we going to do with them? To the best of my knowledge (which may be flawed) only Great Western in Canada currently have “outside-China” downstream mine-to-market value-adding capability which can take the output of a rare earth mining and processing operation and turn it into something useful.

Not only has China taken the economic and technological lead in rare earth mining and processing, it has also taken over the value-adding downstream chain as well.

7 Tek February 3, 2010 at 9:04 pm

Byron,
Regarding your questions about processing facilities, I’ll jump in here and tell you what I’ve derived from reading a listening to the experts in this field, like jack Lifton. Much of this technical explanation is done in much greater and clearer detail by Jack and other professionals, through their many conferences, letters, and articles. So sit back and click on Articles icon, and enjoy a few hours of nice winter reading time. Then go to Rare metal blog and spend a few more hours. THEN,go to the various companies’ websites and review their videos, projects, managements, mission statements, press releases, and stock/financial charts. By the end of the week, you will be getting up to speed. Right now there is no central clearinghouse for all this information and you just have to get down and do it if you want to be informed.

1. The only ones I know of in the North American Stock exchanges are Less Common Metals and Great Western Technology Inc, both subsidiaries of Great Western Minerals Group (TSX V.GWG or GWMGF.PK)

2. Molycorp of Mountain Pass, California has a mine crrently being scheduled for reopening, and they have refining capabilities, though it is not a publically traded company.
Great Western is planning to reopen the RARECO mine in South Africa within the next 24 months to supply its subsidiaries.
Arafura and Lynas of Australia will ship their concentrates to Malaysia or China for processing. The smallest company,Alkane Resources has a small pilot plant in Australia.
There are other small mines scattered around the world, but they comprise maybe 5% total of the world production.

3. 3 to 5years for a new mine and/or processing. Maybe less than two years to reopen an existing mine. New advances and increased efficiencies in processing might take a year off , if all the funding, siting, and evironmental permitting were already in place.

4. The general answer focuses on the difficulty of the metallurgy of the ore bodies, and how radically they differ. But a single line facility cannot refine one day from a clay based ore body, and simply switch over to a milled hardrock ore body with a completely different chemical and physical structure the next day or week. Nor is it likely they can switch from a predominantly LREE ores to a HREE ores. Though the physical equipment is much the same, the chemical processing and formulas are completely different for each mine/ore body. Perhaps a multi line facility, esssentially three separate operations under one roof, could provide some flexibility, but the whole industry is essentially at a scratch start right now, and building such facilities is quite expensive, especially when you’re looking at small cap companies. On top of that, there aren’t many engineers left in this field since China has owned the REE world for the past 10 years. New engineers have to be brought up the learning curve too.

8 Jason Bufford January 3, 2011 at 8:51 am

I got the rare earth for sale, kindly interest please send me an email for appointment.

Jason

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