Rare Earth Elements
Earth, as used in “Rare Earth Elements” (“REE”) is an old term for oxide. Thus rare earths were historically called rare oxides. Back in the day they were a very secretive and complex group of elements. It took 153 years and numerous scientific inventions and discoveries before they were all isolated.
Yttrium was the first to be isolated in 1794, from a mineral discovered at a mine near Ytterby in Sweden. Promethium was the last to be isolated, in 1947. They are also characterised by long and strangely spelt names.
The group comprises the 15 lanthanides along with Scandium and Yttrium. Click here for their position in the periodic table. The latter two are included as they have similar chemical properties and are often found in the same deposits as the lanthanides. Rare earths are generally categorized as light rare earths (“LREE”) and heavy rare earths (“HREE”) 1 .
The principle difference is that heavies have what is known as “paired” electrons (that is a counter-clockwise spinning electron is paired with a clockwise spinning electron) whereas the lights have unpaired electrons. In general, it is the differences in electronic configurations that give the rare earths their value in a modern economy.
There are hundreds of uses for rare earths and more are being discovered every year. Uses include aluminium alloys, lasers, glass and lenses, lighting, magnets, batteries, capacitors, chemicals, catalytic convertors and petroleum refining.
Rare earths are used in so-called green or clean energy technologies. Particularly solar cells, wind turbines, electric vehicles and lighting. Should demand for these technologies dramatically increase, and many predict that it will, then demand for some rare earths will skyrocket.
Take the case of neodymium, used in magnets in wind turbines and magnets and batteries in electric cars. Demand for neodymium oxide was around 20,000 tonnes in 2010 and is projected to increase to around 30,000 tonnes in 2025 without significant development of clean energy. However, according to the US Department of Energy, if clean energy take-up is at the high end of expectations, by 2025 there will be demand for an additional 70,000 tonnes. Click here for the DOE Critical Materials Summary.
The world is not short of rare earth resources, there are well over 100 projects being investigated today with several already under development. But it is short today and will be for the next few years.
The total market is small, around 150,000 tonnes of rare earth oxides (or would that be rare oxide oxides?) per year. It is absolutely dominated by China, which currently supplies around 95% of the world’s production of rare earths and their oxides. China is also the largest consumer with a market share above 60%.
Over the last few years China has significantly reduced quotas for the export of rare earths. This had the predictable effect: skyrocketing prices, a frantic search for substitution and an absolute scramble to develop new projects. Today, and for a few more years, rare earths are all about China.
The market is somewhat opaque, with prices usually being set between individual parties. There is no publically traded exchange as for other metals, however some entities do publish prices. Click here for some recent prices.
Prices of various rare earths vary widely, both between elements, between countries and over time, the latter largely a result of Chinese quotas. For example: Cerium Oxide fetched around USD5 per tonne in 2009 and USD70/t in late 2011. Dysprosium Oxide fetched around USD100/t in 2009 and around USD2000/t in late 2011.
It should be noted that because rare earths are usually used in very small quantities, high prices do not necessarily have a significant impact upon the end user. The issue is certainty of supply.
Rare earth deposits occur in four primary geological settings 2 . A common feature for all deposits is that the different rare earths cannot be mined and treated separately. This results in stockpiling and low prices for the less used rare earths. Rare earths can also accompany other minerals, such occurrences are not considered here.
Thus the closer the assemblage of rare earths in a deposit is to demand the better. The heavy rare earths tend to be of considerably more value than the lights.
The presence of uranium and/or thorium can be a significant cost penalty. The treatment process itself can be very polluting. For example, in China oxalic acid, among other chemicals, is used in rare earth processing. It is poisonous, can be fatal if swallowed, and is highly corrosive. China is increasing environmental standards which is helping to drive up production costs.
Capital costs to develop a rare earth mine and processing plant are very high per tonne of production. Operating costs can also be very high, depending upon the mineralogy of the deposit.
Historically, development times have been very long, ten years or more. Finally, outside of China, there is very limited technical expertise in the processing of rare earths.
While there has been a lot of, perhaps justified, hype and hoopla about rare earths over the last few years, a more sober assessment is required before investment.
A decision is needed about future growth and production in the rare earth market and its effect upon prices. If we all drive electric cars and the world is forested with windmills and solar panels demand will go through the roof. Alternatively, new production over the next few years may serve to suppress prices.
Compare the assemblage with demand and look for higher value elements, particularly the heavies. Confidence is needed that the deposit can be economically processed. This can be determined to a degree if pilot plant test work has been successfully completed or it is near-identical to a deposit in production.
High capital cost and long development timelines means less return on investment. In particular be cautious of optimistic timelines. Finally, on-board technical expertise is a must.
Light Rare Earths
Lanthanum (La, atomic number 57), Cerium (Ce 58), Praseodymium ((Pr, 59), Neodymium (Nd, 60), Promethium (Pm, 61), Samarium (Sm, 62), Europium (Eu, 63), Gadolinium (Gd, 64). Scandium (Sc, 21)
Heavy Rare Earths
Terbium (Tb, 65), Dysprosium (Dy, 66), Holmium (Ho, 67), Erbium (Er, 68), Thulium (Tm, 69), Ytterbium (Yb, 70), Lutetium (Lu, 71).
Yttrium (Y, 39) is grouped with the heavies because it has similar chemical characteristics. However Scandium (Sc, 21) is not classified with either.
- Bastnasite, a carbonate-fluoride mineral which contains mostly lights in its lattice.
- Ion absorption clays are the product of weathering of rare earth rich host rocks, can host both lights and heavies.
- Monazite, hosting lights and heavies, but often also significant uranium and thorium.
- Loparite, common in Russia, and also dominantly light