Lynas, Molycorp lead the rare earth advance BY: GEOFF HISCOCK From: The Australian June 18, 2012 3:27PM
FOUR of the world's most prominent rare earths contenders outside China - Lynas, Molycorp, Great Western and Stans - have reported business advances in recent days as they prepare for increased demand from the makers of permanent magnets and automotive catalysts.
By 2016, world demand for rare earth elements is expected to reach 160,000 tonnes, up from about 105,000 tonnes last year, according to estimates released earlier this year by Perth-based industry consultant Dudley Kingsnorth of Industrial Minerals Co of Australia (IMCOA).
Magnets – found in hybrid and electric vehicles, wind turbines and electronic components such as smartphones - and catalysts, which are used in petrochemical cracking and vehicle emission control, are the two major end uses of rare earths. Other significant applications are in metal alloys, polishing, glass, phosphors, ceramics, medical imaging and defence.
So far, Chinese producers have dominated the rare earths industry, but by 2016, about 60,000 tonnes of supply will come from non-Chinese sources – primarily Lynas Corp’s Mount Weld mine in Western Australia, and Molycorp’s revived Mountain Pass operation in California. The most influential people in Sport
Great Western Minerals Group’s Steenkampskraal mine in South Africa is also expected to be a significant contributor, along with mines in India, Vietnam, Kazakhstan, Australia (Alkane Resources’ Dubbo project) and Kyrgyzstan, where Stans Energy announced last week that its Kashka rare earth processing plant would be ready for operational testing next month.
In December 2009, Stans acquired a 20-year licence to operate the old Soviet-era Kutessay II mine in Kyrgyzstan, and a year ago bought the associated Kashka plant to handle processing from Kutessay. By the end of August, it hopes to produce a small amount of heavy rare earth oxides from concentrate left in the plant’s holding tanks.
In recent months, mainstream vehicle makers have announced plans to produce more hybrids and electric vehicles, which will require more batteries and more rare-earth inputs. One sign of the way the automotive world is moving came in the results from this weekend’s Le Mans 24-hour endurance race. Audi, which won the race last year with a diesel engine, repeated its 2011 triumph but this year won with a hybrid-diesel.
In addition, World Health Organisation researchers last week warned there is a “causal link” between exhaust fumes from diesel engines and cancer in human, raising expectations that calls for cleaner engine technology will further boost rare-earth demand.
While the lighter rare earths such as lanthanum and cerium are relatively abundant, the heavier and harder-to-produce rare earths such as dysprosium, yttrium and terbium are expected to be in short supply by 2016. Europium, a mid-weight rare earth used in LEDs, LCDs and energy efficient lights, will face the most significant shortage, according to Kingsnorth’s April 2012 estimate.
Another industry expert, Technology Metals Research co-founder Jack Lifton, told The Australian recently that it was very hard to find the most important rare earths in the right proportions. Speaking at a New York investment conference last month, Lifton said the supply situation for dysprosium was not going to get any better, while for neodymium it would get worse. Permanent magnets, which use neodymium and dysprosium, represented the key item in rare earth values, he said.
Of the non-Chinese frontrunners, Lynas Corp looks to be on track to achieve a temporary operating licence (TOL) for its Malaysian processing plant after Malaysia’s Minister of Science, Technology and Innovation last week dismissed an appeal against the Atomic Energy Licensing Board’s earlier approval of the licence.
Lynas said yesterday it had “readily available solutions” to satisfy new conditions imposed by the minister covering radioactive elements in the residue and an emergency response plan for dust released from the residue.
"Lynas has passed every review it has been subject to, and we now look forward to the issuance of the TOL,” Lynas executive chairman Nick Curtis said in a statement.
Lynas has about 11,000 tonnes of rare earth oxides stored at its Mount Weld site, ready to be shipped to its advanced materials plant in Kuantan, Malaysia, for processing. By next year, Lynas aims to be mining and processing 22,000 tonnes a year.
Last week it announced that a scoping study of its Duncan deposit, next to its Central Lathanides Deposit (CLD) at Mount Weld, showed a distribution “biased more towards high-value heavy rate earths.” It said that if the company eventually were to proceed with the Duncan deposit, it would be a four-year $600 million project, with production of about 13,000 tonnes a year of rare earth oxides.
In California, Molycorp announced on June 11 that it had completed its C$1.2 billion takeover of Canadian-based Neo Material Technologies, giving it a full “mine to magnet” capability. Molycorp’s flagship Mountain Pass mine – revamped this year after being mothballed in 2002 - produces rare earth oxides, while Neo has processing capabilities, various patents and plants in North America, Germany, China and Thailand.
The deal included Neo’s subsidiary Magnequench, which makes bonded permanent magnets at the Chinese and Thai facilities.
Molycorp CEO Mark Smith said that as a result of the Neo takeover, the company’s expanded product line up - particularly in the heavy rare earth category - and its patented technology would make it a “formidable player” in global markets for years to come.
Toronto-listed Great Western Minerals Group (GWMG) said last week its Steenkampskraal mine in South Africa was showing very high grade rare earth assay results from its latest samples. It found a higher distribution of neodymium, dysprosium and terbium compared to the historical data it used when it bought the mine.
Steenkampskraal, located about 350 km north of Cape Town, produced thorium in the 1950s and 1960s, when it was owned by Anglo American Corp.
GWMG expects to begin rare earth production there in the first quarter of 2013, with annual output of 5000 tonnes of rare earth oxides.
GWMG’s two subsidiaries, Less Common Metals Ltd in Birkenhead, UK and Great Western Technologies in Troy, Michigan, already produce specialty alloys used in battery, magnet and aerospace industries.
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