, pub-3787448768440954, DIRECT, f08c47fec0942fa0 [google-translator]

Rare earth elements market under the spotlight

“Canada and Australia are probably the leaders at the moment. However, it’s still very challenging to turn rare earth deposits into economically-viable mines.”

Demand for rare earths is projected to increase as much as ten times between 2030 and 2040, and many countries have designated them as critical and strategic minerals, according to a panel on the rare earths market at The Northern Miner’s Global Mining Symposium this week.

The panellists included Mark Chalmers, president and CEO of Energy Fuels (TSX: EFR; NYSE: UUUU), a leading U.S. producer of uranium and an emerging player in the REEs space; Clint Cox, founder of The Anchor House, an investment advisory firm specialising in rare earth markets; and Chris Grove, president of Commerce Resources (TSXV: CCE; US-OTC: CMRZF), an exploration and development company focused on advancing its Ashram Rare Earth and Fluorspar project in Quebec.

Rare earths comprise a group of 15 metallic elements plus scandium and yttrium. They are vital materials for our modern world and are used in electronics such as smartphones, digital cameras, computer monitors, and flat-screen televisions and for the magnets in electric vehicles and wind turbines — the technologies necessary for global efforts to decarbonise.

“Rare earths have made technologies smaller, lighter, faster, and stronger,” says The Anchor House’s Cox. “Cars contain somewhere between 150 and 200 rare earth magnets, with REEs also used in car seats, windshield wipers, and mirrors. They are also used in the aerospace and defence industries for the magnets in satellites and guided missiles for defence systems.”

Cox notes that while the global market for REEs is “relatively small at about US$5 billion to US$10 billion, they directly impact somewhere between US$5 trillion to US$10 trillion in global GDP, so they have an outsized impact, and that’s why countries are designating them as critical and strategic to ensure better availability globally.”

While not considered ‘rare’ in the same way that other valuable commodities are such as gold — even the rarest REE, thulium, is about 125 times more common than gold, and cerium, the least-rare REE, is 15,000 times more abundant than gold. Mineralogists consider them rare because they occur in deposits at relatively low concentrations.

“It all comes down to economics,” says Grove from Commerce Resources. “And that’s particularly true for REEs as although they occur in deposits that can often host up to 150 different mineral types, only four of these minerals — loparite, xenotime, bassetite, and monazite — are commercially mined today.”

Monazite is the most important of these minerals because it contains the highest distribution of neodymium, praseodymium, europium, and terbium — the REEs used to manufacture permanent magnets and accounts for the single largest use of rare earths.

According to Grove, the world’s largest source of REEs is the Bayan Obo rare earth mine in the Inner Mongolia region of China. Owned and operated by the Chinese state-owned Baogang Group, the mine accounts for more than 40% of the total known reserves of REEs globally and nearly half of the global rare earth production.

“China also has the most significant downstream market for manufacturing rare earths and sources most of it REEs from mines in Myanmar, Vietnam, North Korea, and the United States,” he says. “Putting China in the odd situation of being a net importer of rare earth elements.”

Rare earths are often found in commercially-viable concentrations at uranium deposits, which can lead to Environmental, Social, and Governance (ESG) issues around handling radioactive materials, says Energy Fuels’ Chalmers.

Energy Fuels’ strategy “is to replicate what the Chinese are doing with monazite sands, but to process these sands in the United States using methods that meet ESG standards,” he says.

“We’ve retrofitted a uranium mill that has all the necessary infrastructure and licenses to deal with radionuclides such as uranium and thorium, while also being able to process monazite sands for rare earths,” says Chalmers.

The company “has plans to emerge as a significant global producer of low-cost rare earths outside of China, with production costs in the lowest quartile globally,” he says, noting that the main challenge it faces is securing more supplies of monazite sands.

According to Cox, several jurisdictions are currently being explored for new sources of rare earths. These include Canada, Australia, South America, Africa, Southeast Asia, and Russia.

“Canada and Australia are probably the leaders at the moment,” he says. “However, it’s still very challenging to turn rare earth deposits into economically-viable mines.”

Rare earths production line at Lynas Rare Earth’s plant in Kuantan, Malaysia. Credit: Lynas Rare Earths.

Turning to some of the key factors currently impacting rare earth markets, Cox noted that restrictions imposed due to the Covid-19 pandemic put significant pressure on the supply of rare earths from Myanmar (a primary source of heavy REEs) to China.

“The next biggest factor is global GDP,” he says. “While the global economy is recovering well from the pandemic, the economic downturn from the global financial crisis of 2008 had an immense impact on rare earth markets.”

He warned that with demand for rare earths projected to increase as much as ten times between 2030 and 2040, there will be “significant upward pressure on prices.”

This, he says, could lead electric vehicle and wind turbine manufacturers to switch from using permanent magnet drive trains to induction motors and substituting rare earths with less expensive materials.

“With end-users willing to pay more for sustainable-sourced rare earths, supply chains with lower carbon footprints will become more attractive and are likely to drive prices even higher,” he says.

Wrapping up the discussion, the panel agreed that support from western governments for companies operating within and across rare earth supply chains would be crucial for securing new supplies of REEs outside of China. (Northern Miner)

Show More

Related Articles

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Back to top button, pub-3787448768440954, DIRECT, f08c47fec0942fa0