An Outlook on the Rare Earth Elements Mining Industry - 2016

Rare Earth Deposits & Mining

Barakos, and 4 additional German co-authors reported in 2016 that the dependency on China’s export policies deters analysts from forecasting REE prices and future trends. In 2009, when China was found to violate international trade rules, the WTO was asked to intervene. However, the WTO did not resolve this conflict in a timely manner. It was 2014 when a decision was finally made and China was forced to compromise. The time and trade lost during mediation of this dispute contributed to the intensity of the 2010 crisis and 2011 price spike. Such issues call for the need to quicken the decision-making procedures in international trade disputes. Moreover, long-term agreements and the establishment of a REE stock exchange, which would set prices in a transparent manner, may be required and are being demanded by an increasing number of REE importing parties (European Commission, 2014).

But even if prices were to remain stable, the balance problem of REEs should be carefully assessed (Binnemans et al, 2013). If the REEs in higher demand have a lower abundance within a particular deposit, the minimum quantity that needs to be mined, processed and separated must be at least the amount required for critical applications as defined by the consumer market. As a consequence, elements of higher abundance and lower criticality will be produced in larger than required quantities and due to the surpluses they will have to be stockpiled, thus increasing the costs of mining, processing and storing. This is the main reason why the Mountain Pass project seems to have failed despite high expectations.

A global diversification of the rare-earth resources with respect to the demand and supply of the individual REEs may address such supply balance issues. REEs may possibly also be extracted from alternative sources, such as industrial wastes, and by recycling end-of-life REE-bearing products such as consumer products or lighting. Substitution especially of the less common REEs is another important option. An entirely different but equally relevant issue concerns the environmental impact of REE mining and beneficiation. Of particular concern is the common association of REE with thorium and uranium and thus the need to strictly control the dispersion of radioactive elements into the environment (Barakos et al, 2015).

This pertains in particular to the treatment and disposal of tailings. Rather lax legislation in China has resulted in significant pollution, especially related to illegal mining (Kiggins, 2015). The arguments against the LAMP facilities in Malaysia show that people are already prejudiced against REE mining development and processing, despite the fact that the public engagement experience on this industry sector is limited outside of China (Ali, 2014). In some cases, however, an abundance of thorium and uranium may have a positive impact on the feasibility of a REE deposit, since both may be exploited as by-products. The REE industry needs to convince the public that REE mining development should not be considered as a threat, but that rare earth elements [and uranium/ thorium] are essential ingredients for clean energy and a green economy.

The separation of REEs is a primary technical issue for the global REE industry, with competency still centred mostly in China. A few separation plants are settled in the Western world, such as the Molycorp facilities in Estonia and the Rhodia plant in France. However, there are numerous current research and development projects that focus on the development of extraction and separation technologies that are resource-and energy-efficient as well as environmentally benign. But extraction and primary beneficiation of REEs are likely the easy steps to take. But rare earth oxides or carbonates are still useless to original equipment manufacturers. Such companies are not equipped to convert them into metals, alloys, and magnets. What is needed to supply end customers in the Western world is a complete value chain, from mining to manufacturing.

China is currently the only country that has developed this complete value chain – comprising of hundreds of independent companies dedicated to rare earth research and production, each providing highly differentiated technologies, processing, formulation, or component-specific applications. By taking into account the economic relevance of the complete REE value chain, the economic value of the REE oxides market, which currently is less than US$4 billion per annum globally (Roskill, 2015), turns into an industrial global market of all rare earth-dependent goods that exceeds $7 trillion in value (Kennedy, 2015). As standalone mining companies cannot replicate a complex REE value chain, this remains the biggest challenge on the path towards a REE-industry in the Western world.