U.S. initiative to stake claim to world’s rare earth minerals

A Journal of People report

Rare earth minerals have become highly prized issue in imperialist conquest. Competition for rare earths has risen steadily since the middle of the 20th century. Yet there are no alternative materials to replace these elements.

The U.S. is increasingly concerned about securing a stable supply of critical minerals used in car batteries, solar panels and wind turbines. Many of the minerals required for decarbonization are used in other high-demand products including smart phones.

By 2050, 24% of the world’s electricity will be used to power electric cars, and solar and wind energy will provide almost half the world’s electricity, BloombergNEF predicts. The BNEF forecasts nickel demand from lithium-ion batteries alone will grow 15.6 times between 2018 and 2030.

There are a few regions that are have a lot of rare earths, and these are mostly in China.

Many of these resources are located in emerging markets that may be seen as too risky by U.S. investors looking for “best-in-class” standards.

China produces more than 80 percent of the world annual total of 130,000 metric tons. Australia has a few areas with rare earth material. A number of other countries also have a few quantities. The U.S. has a little bit of area with lots of rare earths, but the last U.S. source for them, California’s Mountain Pass Quarry, closed in 2015.

The U.S. State Department has helped launch an online tool aimed at staking U.S.’s claim to many of the world’s rare earth minerals.

The new initiative is designed to address these problems by giving countries with nascent resource industries an online “toolkit” to help them develop assets in a way that will allow them to meet the standards of U.S. investors.

The existence of these resources in emerging markets raises the potential for “two really bad outcomes,” said Francis Fannon, the U.S. assistant secretary of state for energy resources, in an interview. “Either the world will not get the minerals it needs in order to fuel energy transition technologies,” or “that investment would only come from those who are less concerned about governance issues, transparency, corruption, environmental standards and best practices.”

Fannon made the comments ahead of the annual convention of the Prospectors & Developers Association of Canada in Toronto, at which the online toolkit is being launched.

“We know that reliance on one country for anything, or any one source, exposes all customers to a risky supply chain, if there were a supply disruption of any type,” Fannon said. “The Earth’s crust is blessed with good rocks everywhere. It’s what’s above the ground that will help determine whether a U.S. firm — a best-in-class company — will invest in that country.”

The U.S. is deploying drones and other technology as it scours for potential rare-earths reserves at home and abroad to wean the nation off its dependence on Chinese imports.

“We’ve been almost 100% dependent on foreign sources of rare earth elements for industrial applications,” Jim Reilly, director of the U.S. Geological Survey, said. “It’s not only the domestic sources of the resource that we concentrate on. We look for those resources literally across the globe, and then we build collaboration with our partners.”

The U.S. is also in search of “friendly” sources of rare earths overseas that Washington could collaborate with in securing the material, Reilly said in an interview.

The Pentagon is looking for companies that can supply rare earths crucial to weapons systems.

In January 2020, the U.S. Air Force Research Laboratory in Ohio called for proposals from firms showing they are capable of stockpiling a six-month inventory of neodymium iron boron, which makes the world’s most powerful magnets and is used in the Javelin anti-tank missile, Bloomberg Government reported.

In 2019, U.S. rare earth production climbed 44% to 26 000 metric tons from a year earlier, the USGS said in a report in February. The entire output was shipped overseas for processing, according to the agency. Consumption rose 12% to 13 000 t last year, all of which was met by imports, according to USGS.

Ohio-based Materion Corp. said in December 2019 that it is teaming up with Canada’s Ucore Rare Metals Inc. to bid for a US program to build a rare earth pilot processing plant.

Ucore CEO Jim McKenzie said the US Defense Department might fund more rare earth processing plants for weapons development.

In 2019, the U.S. State Department’s Bureau of Energy Resources launched an international partnership, the Energy Resources Governance Initiative (ERGI), to encourage responsible mining of key minerals.

The ERGI has identified 17 rare earth elements and 14 minerals, including copper, lithium and uranium, which are seen as essential for renewable energy equipment and infrastructure.

“Africa is a huge continent for a lot of these critical minerals and the Chinese have been making heavy advances in that area, offering support and offering investment,” Colin Hamilton, managing director of commodities research at BMO Capital Markets, said last week on the sidelines of a conference in Florida. Meanwhile, coronavirus has “crystallized” U.S.’s determination to diversify its supply chain of key materials and products, he said.

The website is the latest part of that initiative. Founding member countries with records of accomplishment for responsible development, including Canada, will share strategies and tips with other nations on project development, production and stewardship, Fannon said. The website includes specific information such as how to create data management systems to quantify a mineral resource, and complex “decision trees” to weigh the costs and benefits of different approaches.

In 2017, U.S. President Donald Trump signed an executive order seeking to protect America from supply disruptions in critical minerals, saying such disruptions represent “a strategic vulnerability” to the country’s security and prosperity.

According to the U.S. Geological Survey, China, which already produces roughly 70% of the world’s rare earth minerals, supplied about 80% of U.S.’s rare earth imports in the three years ended 2018. State-owned Chinese companies have also been active buying up critical mineral deposits outside the country.

At the height of the trade war between the two countries, China suggested it could restrict the export of some rare earth minerals. Those concerns have eased with the signing of a phase-one trade deal, but Trump remains determined to ramp up domestic production and form partnerships with other countries to secure supply. American production rose 44% last year.

Rare earth materials

The rare earth elements are like others on the periodic table, such as carbon, hydrogen and oxygen with atomic numbers 57 to 71. There are two others with similar properties that are sometimes grouped with these. Nevertheless, the main rare earth elements are these 15.

These elements are abundant in the Earth’s crust than many other valuable elements. Even the rarest rare earth, thulium, with atomic number 69, is 125 times more common than gold. The least-rare rare earth, cerium, with atomic number 58, is 15,000 times more abundant than gold.

These are rare because these are “dispersed” — mostly sprinkled across the planet in relatively low concentrations.

Rare earths are often found in rare igneous rocks called carbonatites.

These materials are very expensive. In 2018, the cost for an oxide of neodymium, atomic number 60, was US$107,000 per metric ton. The price is expected to climb to $150,000 by 2025.

Europium, with atomic number 63, is even more costly – about $712,000 per metric ton.

One of the reasons for the high cost of rare earth elements is that these can be chemically difficult to separate from each other to get a pure substance.

Europiumcame in wide demand is for its role as a color-producing phosphor in video screens, including computer monitors and plasma TVs. It is also useful for absorbing neutrons in nuclear reactors’ control rods.

Neodymium, atomic number 60, is a powerful magnet, useful in smart phones, televisions, lasers, rechargeable batteries and hard drives. An upcoming version of Tesla’s electric car motor is expected to use neodymium.

Platinum (Pt) is more scarce than gold, representing .005 ppm (parts per million) of the earth’s crust. Pt is not exploited at even close to the volume of gold. In 2018, the world produced 860 million ounces of silver, 109 million ounces of gold, and only 6 million ounces of platinum. All the gold ever produced in the world would fill three Olympic-sized swimming pools, while platinum would barely cover your feet in one.

During WWII, Pt was declared a strategic metal, and the U.S. government banned its use in jewelry.

Today, it is even more strategic than it was during the WWII.

Pt is hard to get at. There is no surface mining of platinum, although South Africa does have one very small open-pit mine that provides some 8 percent of the world’s platinum production.

Worldwide, estimates are that there are 69,000 metric tons of pt reserves, and 95 percent of that is deep in the earth’s crust in South Africa. Miniscule amounts are to be found in Russia and North America, where it is mined as a by-product of nickel and palladium, respectively.

Pt is critical for everything from computers and catalytic converters to optical fibers. It is used by automakers to reduce harmful vehicle emissions.

The pt jackpot is South Africa’s Merensky Reef, and the biggest producer is Anglo Platinum, which accounted for some 40 percent of all primary refined platinum, and 30 percent of total global production in 2017.

Prices of Palladium, Pt’s sister, have risen an amazing 400 percent since early 2016 due to chronic under-supply and “relentless” industrial demand.

Rhodium is even rarer and more expensive than palladium. It goes for five times the price of gold. It is produced largely as a by-product of platinum and palladium.

Rhodium has a high melting point and is pretty much immune to corrosion. That makes it a key element for use in anything that needs reflective properties, as well as catalytic converters.

Both diesel and gas engines need rhodium – and now more than ever.

Data from S&P Global Platts suggests that over 80 percent of demand for rhodium and palladium comes from the automotive industry.

The biggest producer of Rhodium is South Africa, followed by Russia and Canada.

Cesium was added to the critical commodities list by the USGS in 2018 and has several important uses in modern industry: It is increasingly vital to the oil and gas industry because it is used in cesium formate brines, which act as heavy mud for high pressure, high temperature offshore oil drilling. In other words, it lubricates drill bits and prevents blowouts.

Cesium isotopes are also responsible for the world’s time standard. That is why they are used in atomic clocks for cell phone networks, the internet, Global Positioning Systems (GPS) and aircraft guidance systems. Cesium clocks are the most accurate known to man — accurate to about 1 second in 300 million years.

Cesium bromide is used in infrared detectors, optics, photoelectric cells, scintillation counters, and spectrophotometers, and the metal is used in the glass for military-grade night vision goggles.

According to the USGS, the U.S. relied 100% on cesium imports in 2019. It is hard to get a world market price on cesium because there is not much trading of this strategic metal, but according to the most recent Mineral Commodities Summary, one company offered 1-gram ampoules of 99.8% (metal basis) cesium for $63.00, a slight increase from $61.80 in 2018, and 99.98% (metal basis) cesium for $81.10, a 3% increase from $78.70 in 2018.

Strategic as it is, though, there are only three pegmatite mines in the world that commercially produce it: Tanco in Manitoba, Bitika in Zimbabwe, and Sinclair in Australia. Tanco and Bitika are no longer producing, and the stockpiles at Tanco and Sinclair are largely controlled by China.

So, not only is there limited production – there are a very limited number of companies in the cesium supply chain.

One is Sinomine Resource Group Co. Ltd, based in China and now the owner of the Tanco mine and Sinclair’s stockpiles, but a potential future competitor is now just emerging on the cesium scene: the relatively unknown Canadian junior miner, Power Metals Corp. best known for its major hard rock lithium deposit in Canada.

This company is sitting on what is hoped to become only the fourth commercial mine of its kind in the world, with 100 percent ownership in the Case Lake property in Northeastern Ontario, where it has made a discovery of a deposit which includes some high-grade cesium mineralization.

The company discovered the pegmatites at West Joe Dyke in August 2018, intersecting high-grade cesium mineralization in six drill holes when it was targeting lithium instead.

For cesium, it means the playing field could be strategically shifting away from what has already been lost to China and towards a new North American supply.

The United States effectively relies on foreign imports for 70 percent of its strategic metals, as indicated by a 2017 USGS report. That is no way to win world dominance in an age of advanced technology that would be crippled without these super metals.

These most valuable metals in the world are so rare that they could become a factor in the difference between global technological dominance and military superiority on one hand, and the loss of superpower status on the other. The most powerful nations are struggling to secure a stable supply.

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