US Rare Earths Today: Misconceptions, Dreams and Realities - South Dakota Mines GEOL/GEOE/PALEO Seminar Series April 16, 2021
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South Dakota Mines GEOL/GEOE/PALEO Seminar Series April 16, 2021 US Rare Earths Today: Misconceptions, Dreams and Realities David R. Hammond, Ph.D. Principal Mineral Economist Hammond International Group
Discussion Topics: ➢ What are Rare-Earth Elements? ➢ Where are they found? ➢ What are they used for? ➢ What are the critical issues? ➢ Who are the US players? ➢ What are the realistic solutions?
Discussion Purpose:
Bring attention to some of the core issues, problems
and realities associated with current US Department of
Defense initiatives to address needed supply of critical
Rare Earth Elements.
Discussion Order:
➢ REE Characteristics
➢ REE Markets
➢ REE Realities
➢ REE Misconceptions
➢ US REE Dreams
3
Rare-Earth Elements:
Lanthanide
Series
4
Rare-Earth Element Oxides:
Total Rare Earth Oxides
TREO
Heavy Rare Earths Light Rare Earth Oxides
HREO OXIDE CRUSTAL LREO OXIDE CRUSTAL
ATOMIC ATOMIC ATOMIC ABUND ATOMIC ATOMIC ATOMIC ABUND
ELEMENT SYMBOL NUMBER WEIGHT OXIDE WEIGHT Oxide/REE (ppm) ELEMENT SYMBOL NUMBER WEIGHT OXIDE WEIGHT Oxide/REE (ppm)
1 Yttrium Y 39 88.906 Y2O3 225.812 1.270 22.0 1 Scandium Sc 21 44.956 Sc2O3 137.910 22
2 Terbium Tb 65 158.925 Tb4O7 747.700 1.176 0.6 2 Lanthanum La 57 138.906 La2O3 325.812 1.173 30
3 Dysprosium Dy 66 162.500 Dy2O3 373.000 1.148 3.5 3 Cerium Ce 58 140.116 CeO2 172.116 1.228 64
4 Holmium Ho 67 164.930 Ho2O3 377.860 1.146 0.8 4 Praseodymium Pr 59 140.908 Pr6O11 1021.448 1.208 7.1
5 Erbium Er 68 167.259 Er2O3 382.518 1.143 2.3 5 Neodymium Nd 60 144.242 Nd2O3 336.484 1.166 26
Pm2O3
6 Thulium Tm 69 168.934 Tm2O3 385.868 1.142 0.3 6 Promethium Pm 61 145.000 337.824 1×10−15
7 Ytterbium Yb 70 173.040 Yb2O3 394.080 1.139 2.2 7 Samarium Sm 62 150.360 Sm2O3 348.720 1.160 4.5
8 Lutetium Lu 71 174.967 Lu2O3 397.934 1.137 0.3 8 Europium Eu 63 151.964 Eu2O3 351.928 1.158 0.9
9 Gadolinium Gd 64 157.250 Gd2O3 362.500 1.153 3.8
5
Rare-Earth Elements Applications: Source: Dudley J. Kingsnorth, 2016, “The Rare Earth Industry in 2016,” Industrial Minerals Company of Australia.
Rare-Earth Elements in National Defense:
7Rare-Earth Elements Consumption*:
(TONS)
(TONS)
(TONS)
*View as order of magnitude only; values lack confidence due to issues with Chinese data used
Source: Dudley J. Kingsnorth, 2016, “The Rare Earth Industry in 2016,” Industrial Minerals Company of Australia.Rare-Earth Element Production Chain:
Mining Concentration Extraction Refining Alloying Fabrication
Rare Earth TREO REO REE REE REE
Minerals Concentrate Oxides Metals Alloys Products
9Principal REE Minerals:
Mineral Chemical Formula (Ideal)
Bastnäesite REECO3F
Paristite CaREE2(CO3)3F2
Synchysite CaREE(CO3)2F)
Monazite (REE,Th)PO4
Xenotime (Y,HREE,Th,U)PO4
Apatite (Ca,REE)5(PO4)3(F,Cl,OH)
Loparite (Na,REE)2Ti2O6
Allanite A2M3Si3O12(OH)
Of Special Mention!
Eudialyte Na15Ca6(Fe,Mn)3Zr3SiO(O,OH,H2O)3(Si3O9)2(Si9O27)2(OH,Cl)2
10REE Deposit Types:
Association Example
Lateritic Ion-Adsorption Clays Bayon Obo, China
Peralkaline igneous rocks Bokan Mountain, Alaska; Round Top, Texas
Carbonatites Mountain Pass, California; Bear Lodge, Wyoming
Iron oxide apatites Pea Ridge, Missouri
Pegmatites Spruce Pine, North Carolina; Alces Lake, Saskatchewan
Metamorphic skarn Mary Kathleen, Queensland
Stratiform phosphates Mount Weld, Western Australia
Pelagic muds/Mn nodules Minami Tori Shima, Pacific Ocean
Paleo pelagic muds/Mn-Fe nodules Chamberlin, South Dakota
Paleo placers Witwatersrand, South Africa
Heavy mineral sands Cooljarloo, Western Australia
Fluorine-Fluorite associations Hicks Dome, Illinois
11Rare-Earth Minerals Deposits: Source: www.dggs.alaska.gov/webpubs/dggs/ic/text/ic061.PDF
Rare-Earth Mineralization in the US:
La Paz
Round Mountain
Source: Bradley S. Van Gosen, Philip L. Verplanck, and Poul Emsbo, “Rare Earth Element Mineral Deposits in the United States,” USGS Circular 1454 Ver 1.1, April 2019
13Rare-Earth Minerals Production & Reserves
10 Production quota; does not include undocumented production.
Source: USGS Mineral Commodity Summaries 2021 – Rare EarthsRare-Earth Deposits Reserves & Resources:
Current REO “Posted” Prices:
Oxide Specification Price (US$/kg) Price Change
Cerium Oxide 99%min FOB China 1.50-1.53 nochange
Cerium Oxide 99.9%min In warehouse Rotterdam 2.30-2.40 nochange
Dysprosium Oxide 99.5%min FOB China 467.00-472.00 nochange
Erbium Oxide 99.5%min FOB China 32.50-33.50 up
Europium Oxide 99.999%min FOB China 31.50-32.50 nochange
Gadolinium Oxide 99.5%min EXW China 33.50-34.00 nochange
Holmium Oxide 99.5%min EXW China 136.20-136.90 nochange
Lanthanum Oxide 99.999%min FOB China 3.80-3.90 down
Neodymium Oxide 99.5%min FOB China 93.50-94.00 down
Praseodymium Oxide 99.5%min FOB China 79.00-80.00 nochange
Praseodymium Oxide 99.5%min In warehouse Rotterdam 74.00-75.00 nochange
PrNd Mischmetal Pr 25%, Nd 75% FOB China 107.50-108.50 nochange
Samarium Oxide 99.9%min FOB China 19.80-20.30 nochange
Scandium Oxide 99.99%min EXW China 856.80-933.30 nochange
Terbium Oxide 99.99%min FOB China 1408.00-1413.00 down
Ytterbium Oxide 99.99%min EXW China 14.80-14.60 nochange
Yttrium Oxide 99.999%min FOB China 6.40-6.50 down
Yttrium Oxide 99.999%min In warehouse Rotterdam 6.90-7.10 nochange
Source: Asian Metals April 14, 2021
16REE “Market” Prices:
Source: Viviana
Fernandez, “Rare-
Earth Elements: A
Historical and a
Financial
Perspective,”
Resources Policy,
September 2017
17Rare-Earth Critical Issues:
➢ “The Middle East has Oil, China has Rare-Earths”
(Deng Xiaoping, 1992)
➢ Long-term Chinese strategy is to export REEs in value-added products
➢ China now dominates global REE mining, metallurgical processing,
technical research, magnet production, etc., etc. . .
✓ Produces 80% of REE the world’s REE resources
✓ Processes well over 90% of the World’s REOs
✓ Produces 95% of World’s REE metals and alloys
✓ Possesses well over 90% of World REE production capacity and can expand
✓ Holds great majority of modern day REE process & product patents
✓ Increasing imports of REE concentrates and oxides
✓ Increasing investments in REE primary production outside China
✓ Supplies 100% of US defense magnet requirements
➢ China has near total control of global REE supply!
➢ China has 100% control over global REE prices!REE Realities:
1. Global REE industry represents an “imperfect market”
2. REEs are not created equal!
3. The REE Supply Problem is Processing, not Sourcing of REE
containing material!
4. Commercial level REE Processing is very difficult!
5. It will take years to develop new REE mines, processing and
metal fabrication capabilities outside China
6. No major mining companies will get involved with REEs unless
significant by-product from primary production!
19More Realities:
1. China is the major customer for REE resource production since
majority of world's REE metals are produced by Chinese
controlled entities; Chinese companies are aggressively trying
to tie up international REE primary supplies.
2. No matter how great your flowsheet is, you must have tons
AND grade to be an REE supplier that matters; producing small
share of market demand won’t cut it!
3. REE sales will be to intermediate and end-use consumers via
non-transparent bi-lateral long-term supply contracts.
4. The logical potential equity partners for miners & processors
are REE consumers.
5. Lowest possible production costs will be determinant for
consumer partner investment/supply contract decisions.
20REE Misconceptions:
1. I can use market posted prices for my project economics!
2. I can use the REE “Basket” for projecting project revenues!
3. My REE resource can be processed by typical conventional
metallurgical processes!
4. My process chemistry/metallurgy fits theory and works at
bench/pilot scale; it no doubt will work commercially!
5. I have new technology and my costs are going to be lower--see I
proved it in the lab!
6. I can cash-out my project to some big mining company or bring
them in as a venture partner!
Answers: No, No, No, No, No and No!
21So, What is the US Doing About it?
❖ Unfortunately Not Much that has accomplished anything!
• Basically ignored by Clinton, Bush, and Obama Administrations
• DOE university funding grants focused on REEs from coal and AMD over
last decade
• Recently DOE and DOD funding grants for development of process and
metal separation technologies
❖ Critical Materials Institute:
• Government-University-Industry partnership started 2013
• Focused on 34 Critical Minerals/Elements
• Funded by DOE
• Based at the Ames Laboratory, Iowa State University and CSM
• Mission: “To assure supply chains of materials critical to clean energy
technologies – enabling innovation in U.S. manufacturing and enhancing U.S.
energy security.”More Recent Government Actions:
➢ December 2017: Executive Order 13817
➢ August 2018: National Defense Authorization Act—Section 871:
“. . . prohibits sourcing of REM’s from China, Russia, North Korea and Iran . . .”
➢ June 2019: “A Federal Strategy to Ensure Secure and Reliable Supplies of Critical
Minerals”
➢ June 2019: “Presidential Determination Pursuant to Section 303 of the Defense
Production Act of 1950” (DARPA Title III)
➢ July 2019: DOD RFI regarding LREE and HREE Separation and Processing
Capability
➢ December 2019: DOD FOA regarding REE Element Separation and Processing
Capability
➢ January 2021: DOD and DOE funding grants
➢ February 2021: Biden administration directive to agencies to critical mineral supply
chains
23Near-Term Global Demand for Critical
REEs:
2020 2025
(mt) (mt)
Total Rare Earth Oxides 200,000 240,000
Assumed US Requirement 60,000 90,000
Praseodymium Oxide 1,000 1,200
Neodymium Oxide 3,500 5,000
Terbium Oxide 150 250
Dysprosium Oxide 500 1,500
Source: D R Hammond projections for relative comparison of upstream mine production purposes only!!!!!
24Current US REE Resource Prospects:
Coal Dream (too low grade & too dispersed)
Coal Waste Dream ( “ “ “ “ “ )
Coal Ash Dream ( “ “ “ “ “ )
Acid Mine Drainage Dream ( “ “ “ “ “ )
Round Top Dream (extremely low grade)
Bokan Mountain Dream (very small resource; low-grade)
Elk Creek Dream (uneconomic, based on Sc)
La Paz Dream (little info, assume is stock play
Hicks Dome Interesting, early stage
Chamberlin Paleo Nodules Very interesting, early stage
Pea Ridge Potential, REE as Fe mine by-product
Florida Phosphates Potential, enormous resource
Bear Lodge Development, large resource, high grade
Mountain Pass Producer (but only LREEs and for China)
25Current US REE Processing Prospects:
MP Materials Mountain Pass, California: Operating but produces LREE
concentrates only which are exported China, new
metallurgical facility promoted, $10 million DOD grant.
Major Problem: Owned by two hedge funds and Shenghe
Resources
Energy Fuels White Mesa Uranium Mill, Blanding, Utah: Operating, now
processing monazite to REE oxide/carbonate, metal
extraction to be done in Estonia, owned by Energy Fuels.
Major Advantage: has radioactive waste disposal permit!
Lynas/Blueline Hondo, Texas: Planned facility to develop new
metallurgical processing technologies for separation of
LREOs, $30 million DOD grant.
Advantage: potential for non-China processing of Mt Weld
concentrates/oxides
Rare Element Resources Upton, Wyoming: Near-term development for process of
Bear Lodge ore to REE oxides; partnership with General
Atomic et al., $22 million DOE grant.
Advantage: has number of permits in hand
26Conclusions:
☼ China controls US’s current/future national defense supply of critical REEs!
☼ There is NO “free market solution” to the US’s REE problem!
☼ Core issue is NOT the need for new REE mines, rather the need for new
REE refining and metallurgical fabrication capacity outside of China!
☼ Government technical & and economic knowledge of mineral resource
production is lacking!
☼ Defense Department officials have little to no understanding of the mining
business in general and the REE value chain in particular!
☼ Junior venture companies will try to capitalize on this lack of understanding
to keep infeasible REE projects going!
☼ High potential US Government will throw buckets of taxpayer money away
to promoters, abetted by political influence and pressures!
DOD needs a fully independent advisory board of experienced resource,
mining, and processing experts for guidance on the optimal (cost & quantity)
sourcing of critical REE supply!
27Realistic Solutions to the Problem:
➢ Government funding, development, and ownership of
central REE separation and fabrication facility?
➢ REE consumer cooperative to create and operate
downstream REE processing, including Defense
Department participation? (e.g., current Rubio Bill)
What’s not realistic is continuing to rely on Chinese
government kindness for finished REE materials, or to
count on Wall Street to bail us out!
28David R. Hammond, Ph.D.
Principal Mineral Economist
Hammond International Group
2406 Glenhaven Drive
Highlands Ranch, Colorado 80126 USA
mineraleconomics.DrH@gmail.com
303-807-3671
29Supplemental Slides
30Mountain Pass - Producer:
Owner: MP Materials - JHL Capital Group, QVT Financial LP,
Shenghe Resources Holding Co. Ltd.(9.9%)
Deposit Type: Carbonatite with 10-15% Bastnäsite
Resource (5.0% TREO C/O): 16.7 Million mt (P & P)*
In-place TREO Grade: 8.0%
In-place TREO: 1.3 Million mt (83% La and Ce)
Annual Pr Oxide Output: 927 mt (15.4% of 2025 US demand)
Annual Nd Oxide Output: 2,511 mt (16.7% of 2025 US demand)
Annual Tb Oxide Output: Very small production in past
Annual Dy Oxide Output: Very small production in past
Comments: - Currently produces only REE concentrates
- Resource is likely much, much larger than current “reserves”
- Currently produces only REE concentrates which are all
exported to China for processing to metal; this reflects
political strategies, not rational economics!
* 2012 Press Release
31Bear Lodge – Real Potential:
Owner: Rare Element Resources (REEMF:OTC) and General Atomics
Deposit Type: Carbonatite with Bastnäsite
Resource (1.5% TREO c/o): 16.2 Million mt (M & Ind)*
In-place TREO Grade: 8.0%
In-place TREO: 1.3 Million mt
Annual TREO Production: 20,000 mt
Annual Pr Oxide Output: 1,200 mt ( 7.5% of 2025 US demand)
Annual Nd Oxide Output: 4,500 mt (11.3% of 2025 US demand)
Annual Tb Oxide Output: 30 mt ( 4.9% of 2025 US demand)
Annual Dy Oxide Output: 90 mt ( 3.2% of 2025 US demand)
Comments: - Additional inferred resource of 41 Million mt
- Most advanced of publically held US located REE projects
- Entering pilot plant phase with General Atomics
*2014 Feasibility Study and personal communication
32Round Top - Dream:
Owner: Texas Mineral Resources w/ USA Rare Earths Earn-In (OTCQB:TMRC)
Deposit Type: Tertiary peralkaline rhyolite intrusion
Resource: 364 Million mt (M & I)*
In-place Pr Grade: 10.3 ppm (crustal abundance 7.1 ppm)
In-place Nd Grade: 27.9 ppm (crustal abundance 26.0 ppm)
In-place Tb Grade: 3.5 ppm (crustal abundance 0.06 ppm)
In-place Dy Grade: 33.3 ppm (crustal abundance 3.5 ppm)
Annual Mine Production: 7.3 Million mt TPY (20,000 TPD leach feed)
Annual Pr Oxide Output: 70 mt (0.4% of 2025 US demand)
Annual Nd Oxide Output: 182 mt (0.4% of 2025 US demand)
Annual Tb Oxide Output: 24 mt (4.0% of 2025 US demand)
Annual Dy Oxide Output: 207 mt (7.4% of 2025 US demand)
Comments: - Very low REE grades, commercial feasible highly doubtful!
- Projected as a multi-industrial minerals/metals and commodity
chemicals manufacturer, with REEs as by-products
- PEA (2019) claims project will produce 20 products:
Y, Pr, Nd, Sm, Tb, Dy, Lu, Sc and Ga Oxides; Be Hydroxide; U3O8,
Li Carbonate; Al, Fe, Mg, Mn and K Sulfates
*2019 PEA
33Bokan Mountain - Dream:
Owner: Ucore Rare Metals (TSX-V: UCU, OTCQX:UURAF, FSE: U9U)
Deposit Type: Alkaline Igneous Intrusion
Resource (at 0.04 % TREO c/o): 5.8 Million mt (M & I)*
In-place TREO Grade: 0.60%
In-place TREO: 28,000 mt
Recoverable TREO: 22,500 mt
Annual TREO Production: 1,875 mt (1,500 TPD mill feed)
Annual Pr Oxide Output: 71 mt (1.2% of 2025 US demand)
Annual Nd Oxide Output: 274 mt (1.8% of 2025 US demand)
Annual Tb Oxide Output: 12 mt (5.5% of 2025 US demand)
Annual Dy Oxide Output: 83 mt (7.9% of 2025 US demand)
Comments: - Small resource; Dotson Zone geologically constrained
- Adjacent to EPA Superfund site (Uranium)
- Alaska AIEDA commitment of $145 M (but only with a positive
Feasibility Study – that will never happen!)
- 2019 PR claims it will produce the REE “basket” plus Nb, Zr,
Be, Hf, TiO2, V
*2013 PEA plus 2015 Press Release
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