TREND: Markets and Critical Materials
While China seems determined to exploit its current control over the market for rare earths and other minerals critical to high-tech and green energy technologies, and while governments engage in conventional hand-wringing and head-scratching, markets appear to be reacting in the ways that markets are supposed to react.
China, which currently accounts for about 97% of the worldwide production of rare earths (which, it turns out, aren’t all that rare), announced that it will soon put forward a second round of quotas on the amount of rare earths it will export. The country put its first controls on exports of the minerals last December. China Security News said Commerce Minister Cheng Deming made the announcement of a second round of export controls, further tightening China’s grip.
China’s export policies quickly resulted in price spikes for rare earths and critical minerals. Mining Weekly.com, reporting from Johannesburg, said rare earths were experiencing "tremendous gains" in prices, a circumstance the publication likened to a uranium price bubble a couple of years ago. That uranium price hike resulted in a burst of exploration and production and a rapid fall of U prices back to pre-bubble levels. The publication quoted Australian analyst Trent Allen as saying that prices for 10 rare earth oxides were up 679% in commodities markets.
In Japan, prior to the earthquake and tsunami, major firms were announcing recycling and recovery programs. Research analyst Euan Sadden reported that Shin-Etsu Chemical will pull rare earth minerals from discarded air conditioners and recycle them into magnets. Hitachi is working on techniques for recycling materials from hard disk drive motors, and chemical maker Showa Denko has opened a plant in Vietnam to recycle dysprosium and didymium in an 800 ton/day factory.
Green Technology Solutions (GTSO) of San Diego has mounted a joint venture with Rare Earth Exporters of Mongolia for a new rare earth mine in the Asia country’s Tuv Province, on China’s border, to produce a variety of rare earths. GTSO President John Shearer said, "We’re also in negotiations already regarding other rare earth mining properties in Mongolia, as well." GTSO is a mining technology company.
In Colorado, the Gunnison Times reports that the firm Colorado Rare Earths is looking at a known deposit—identified by the U.S. Geological Survey—in Gunnison County in the west-central part of the state, which includes rare minerals germanium, indium, and titanium. A Canadian mining company, Teck Cominco, owns minerals rights in the area, the newspaper reported. Colorado Rare Earths President Greg Schifrin said his company is looking to mine the minerals "and ship out concentrate for processing elsewhere. The intention is to have a very low impact, environmentally conscious, minimal footprint operation in Gunnison County."
Canada’s Vancouver Sun predicts that an Australian mining company will topple China‘s monopoly position in the world market with a new refining plant in Malaysia. The Australian firm, Lynas Corp., plans to ship ores from its massive Mount Weld mine in the state of Western Australia to the new plant. Some critics have charged that Lynas is willing to ship the mineral ore 4,000 kilometers from the mine because Malaysia’s environmental protections are weak. The plant at Gebeng on Malaysia’s east coast, the newspaper reported, will meet about a third of world demand within two years. The plant is scheduled to begin operating this year, and Lynas says it will be environmentally benign and "sustainable."
In Canada, Quantum Rare Earth Developments Corp. says new geological analysis confirms a large niobium deposit in southeast Nebraska and the company will look further into developing a mine there. Niobium is used in steelmaking and hasn’t been produced in significant amounts in the U.S. since the 1950s. Today, 84% of the world’s niobium comes from Brazil. The Nebraska deposit is some 500 feet underground, so the economics of mining are not clear, the company said. The U.S. Geological Survey identified the Elk Creek, Neb., site as a potential for other rare earth minerals as well. It is the same survey that highlighted the deposits in Gunnison County, Colo. If Elk Creek pans out, says University of Nebraska geologist Matt Joeckel, "This deposit could be a game changer."
—Kennedy Maize is MANAGING POWER’s executive editor.