Rare earths: U.S. government to back domestic rare earth exploration and development to secure strategic and critical metal supply.

Roskill view: The U.S. government declared this month that it would support domestic rare earth exploration and production development with US$40M put up by the Senate Armed Services Committee. The report by the U.S. Senate calls for “commitments to purchase [domestic] strategic and critical materials” to emphasise an awareness of China’s dominance in the rare earths supply-demand setting.

In the wake of the Chinese-partnered acquisition of the sole U.S. rare earth mine, Mountain Pass, there has been much discussion in the U.S. around securing a domestic supply chain of critical metals. This comes with renewed interest in rare earths this year, following a recovery in certain REE prices and advances in permanent magnets used in new energy technologies.

In June 2017, Rare Earth Salts (RES) started commercial production of purified rare earth oxides at a facility in Nebraska, USA. Production capacity is expected to ramp up to 18t per month of primarily yttrium, europium, terbium and lanthanum oxides to a standard purity of 99.9%. The estimated annual 200tpy capacity of RES falls far short of the historical production of Mountain Pass (over 3,000tpy), but the Company plans to utilise its proprietary production method to reduce the cost of REE processing and production to below that of the solvent extraction techniques used predominantly in China.

RES has begun production of selected rare earths recovered and purified from recycled cathode fluorescent lamps (CFLs). With the global decline in CFL consumption, replaced by more energy efficient light-emitting diode lamps (LEDs), there is unlikely to be a long-term sustainable recycling chain from this source. However, RES is reported to be capable of processing a variety of light and heavy rare earth concentrates as feedstock to produce the full range of rare earths. This is geared specifically towards producing critical elements such as neodymium and praseodymium used in permanent magnets.

Low quantities of rare earths in commercial products and the difficulty of the separation process remain barriers to large scale recycling. This leaves a broad scope for growth in separation and purification of recycled or concentrates of rare earths with the fast evolving technologies that utilise critical metals, especially with competitive production costs compared with primary mine productions.

Roskill’s Rare Earths: Global Industry, Markets & Outlook report will be published in October 2017.

To discuss the rare earths market with Roskill, contact David Merriman: merriman@roskill.com or Suzanne Shaw: suzanne@roskill.com