Rare Earth Metals: Not So Rare, But Still Valuable

November 04, 2008

 

Based on November 2005 figures, the company compared its Nolans resource with some others around the world.

 

Source: Arafura Resources Limited

 

At its Mount Weld project in Western Australia, Lynas Corporation (Bloomberg Ticker - LYSCF:US) completed its first mining "campaign" in May. Based on figures updated in March this year, the company believes its resources at the project now amount to some 12.24 million tonnes at 9.7% rare earth oxide, which will produce some 1,124,000 tonnes of REO.

 

Canada

In addition to Neo Material Technologies out of Toronto, with its operation in China, there are three other Canadian companies involved, to a greater or lesser extent, in REM in Canada itself.

Avalon Ventures Ltd (Bloomberg Ticker - AVL:CN) has its Thor Lake Project near Yellowknife in Canada's Northwest Territories with, according to the company, "[e]xceptional enrichment in Neodymium & Heavy REE."

VMS Ventures (Bloomberg Ticker - VMS:CN), out of Vancouver, has its Eden Lake Carbonatite Complex in Manitoba, where REM were discovered in 2003.

Great Western Minerals Group (Bloomberg Ticker - GWG:CN), out of Saskatoon in Saskatchewan, has its Hoidas Lake Rare Earth Project which, in the words of the company, "...is North America's most advanced Rare Earth Element (REE) property in development..." and "...has the potential to supply at least 10% of North America's consumption of REE for many years."

Finally, Canada's Rare Element Resources (Bloomberg Ticker - RES:CN), has not only gold on its Bear Lodge, Wyo., property, but also, in its words, "significant high-grade rare-earth elements."

For those interested in looking "downstream," there are a number of REM producers internationally, especially in Japan. In the U.S., however, apart from Chevron's Molycorp, both France's chemical company Rhodia (Bloomberg Ticker - RHA:FP), and WR Grace's (Bloomberg Ticker - GRA:US) Grace Davison division are actively involved in processing rare earths.

 

Afterwords

First, it has been estimated that current global consumption of REM now accounts for around 70-75% of their total production. This leads one to believe that considerable quantities of mined REO remain, as yet to be processed.

Second, the mineral ore resources currently mined to produce REM contain different groups of metals, not just particular, individual, metals in isolation. So, instead of some of these metals being by-products of other metals, as, say, rhenium is of moly, and moly is of copper, they are essentially "co-products" - mine for one and the others come free!

The corollary to this, however, is that the economics of mining on such a "volume" basis could lead to it just not being viable to mine such ore resources for one or two REM alone, especially if the other metals contained in the REO do not "pay their way." In future, therefore, the composition of a mine's REO resources - as opposed just to the volume of ore it can produce - may well become critical to that mine's economic viability.

Third, even though rare earth metals are classified as critical minerals in the U.S. National Academies' "criticality matrix," the U.S. National Defense Stockpile at present contains none.

 

Resources

The National Academies

Roskill

Russian Journal of Non-Ferrous Metals

Tienjiao International

U.S. Geological Survey (USGS)

 

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