Rare Earths: Market Overview, Broader Context, and CMI
Roderick G. Eggert
Professor, Mineral and Energy Economics Program, Colorado School of Mines, and
Deputy Director, Critical Materials Institute
UQ Rare Earth Minerals Symposium, May 31, 2013
Rare-earth elements (REEs)
2 Source: www.australianrareearths.com
Rare-earth oxide prices, FOB China (6 January 2006 – 28 May 2013)
3 Source: metal-pages.com
Market overview
Demand: ‘vitamins’ of many modern materials
4
270 Years of Progress in Magnet Technology
Each magnet produces
half a Joule of magnetic
energy, yet the size has
decreased by a thousand
fold.
• Lodestone
• Ferrite
• Nd-Fe-B
1735
1952
1985
Source: Alex King (Ames Laboratory)
Phosphors in Advanced Lighting
Red (Eu, Y) + green (Ce, La, Tb) + blue (Eu) phosphors yield white light
6
Sources: sylvania.com; en.wikipedia.com; home.howstuffworks.com; shattershield.wordpress.com
Rare-earth applications by element
Element Principal Applications
Lanthanum Ni-metal-hydride batteries, optics, petroleum cracking catalysts
Cerium Catalysts, UV light absorption in glasses, polishing media
Praseodymium Additive to Nd-Fe-B magnets
Neodymium Nd-Fe-B permanent magnets (motors, hard drives, cell phones, wind turbines, other)
Samarium Sm-Co permanent magnets
Europium Phosphors (the color red in TVs and fluorescent lamps)
Gadolinium Host for phosphors, MRI contrast agents, X-ray screens
Terbium Phosphors (green color) in fluorescent lamps, monitors and TV screens, LEDs, other
Dysprosium Additive to Nd-Fe-B permanent magnets to improve high-temperature performance, increase coercivity
Yttrium Host for phosphors, others
7 Source: Gschneidner 2011
Potential demand growth (+ 20%)
8 Source: Kingsnorth 2012
2012 Actual (tonnes REO)
2016 Forecast (tonnes REO)
% Growth
Magnets 22,500 36,000 60
Metal alloys 22,000 26,000 18
Catalysts 21,000 25,000 19
Polishing 19,000 25,000 32
Glass 7,500 9,000 20
Phosphors 9,500 12,500 32
Ceramics 6,500 9,000 38
Other 7,000 20,000 186
Total 115,000 162,500 41
Market overview
Demand: ‘vitamins’ of modern materials
Supply: dominated by China, this is changing albeit slowly, not all deposits created equal
9
Source: minerals.usgs.gov
The supply chain and its geography
Stage Location of Production
Mining & concentration >95% China
Separated oxides >95% China
Reduction to metal ~100 China
Production of alloys and magnet powders
75-80% China 20-25% Japan
Manufacture of NdFeB magnets
75-80% China 17-25% Japan 3-5% Europe
11
Source: Buchert (2011)
Chinese production, consumption, and exports, 1990-2012 (tonnes REO)
12 Source: U.S. Geological Survey; Chen 2011; and other sources.
Chinese policies
Begun prior to 2010
Production targets (Baotou, Sichuan, Ionic clays)
Export quotas and taxes (started with concentrates, over time extended to intermediate products)
Recent
Industry consolidation into 3-4 major companies
More stringent environmental permitting
National invoicing system
Stockpiling
13
~400 non-Chinese exploration & mining projects, of which. . .
Two are in the construction and start-up phase Mountain Pass, California (Molycorp)
Mount Weld, Australia (Lynas)
Perhaps 20 others are in advanced exploration or engineering, of which 5-10 might come into production by 2020, including (but not limited to): Nolans Bore, Australia (Arafura)
Dubbo Zirconia, Australia (Alkane)
Steenkampskraal, South Africa (Great Western Minerals)
Bear Lodge, Wyoming (Rare Element Resources)
Norra Kärr, Sweden (Tasman)
Nechalacho, Canada (Avalon)
Kipawa, Canada (Matamec)
Zandkopsdrift, South Africa (Frontier)
Bokan Mountain, Alaska (Ucore)
14
Varying Distribution of Rare Earths (%)
Mountain Pass,
California
Bayan Obo, China
Longnan, China
Xunwu, China
Bear Lodge,
Wyoming
Strange Lake,
Canada
La 33.8 23.0 1.8 43.4 30.4 4.6
Ce 49.6 50.0 0.4 2.4 45.5 12.0
Pr 4.1 6.2 0.7 9.0 4.7 1.4
Nd 11.2 18.5 3.0 31.7 15.8 4.3
Sm 0.9 0.8 2.8 3.9 1.8 2.1
Eu 0.1 0.2 0.1 0.5 0.4 0.2
Gd 0.2 0.7 6.9 3.0 0.7 2.5
Tb 0.02 0.1 1.3 trace 0.1 0.3
Dy 0.03 0.1 6.7 trace 0.2 8.2
Y 0.1 trace 65.0 8.0 <0.01 52.8
15
Sources: US Geological Survey, 2010; Castor, 1986.
Market overview
Demand: ‘vitamins’ of modern materials
Supply: dominated by China, this is changing albeit slowly, not all deposits created equal
Prices: 2-tier pricing, significant differences among REEs
16
Chinese domestic and world prices for rare-earth oxides, February 21, 2013 (US$/kg)
Oxide 99% min purity Chinese domestic FOB China
Lanthanum 7.36 10.00
Cerium 7.36 11.00
Praseodymium 56.00 82.50
Neodymium 51.20 77.50
Samarium 7.44 22.50
Europium 816.00 1550.00
Gadolinium 20.40 47.00
Terbium 600.00 1250.00
Dysprosium 328.00 615.00
Yttrium 15.20 35.50
17
Source: metal-pages.com. Note: Exchange rate of 6.2 RMB/US$ used to convert Chinese domestic prices into US$ prices.
Dysprosium oxide, 11/15/2007 – 2/7/2013)
18 Source: metal-pages.com
Europium oxide, 11/15/2007 – 2/7/2013
19 Source: metal-pages.com
Neodymium oxide, 11/15/2007 – 2/7/2013
20 Source: metal-pages.com
Terbium oxide, 11/15/2007 – 2/7/2013
21 Source: metal-pages.com
Yttrium oxide, 11/15/2007 – 2/7/2013
22 Source: metal-pages.com
Market overview
Demand: ‘vitamins’ of modern materials
Supply: dominated by China, this is changing albeit slowly, not all deposits created equal
Prices: 2-tier pricing, significant differences among REEs
Market balance: availabilities of Nd, Eu, Tb, Dy, Y are of greatest concern
23
2016 projected market balance, Kingsnorth (tonnes REO)
Supply/Production Demand Balance
Lanthanum 49,500 34,300 15,200
Cerium 77,750 70,500 7,250
Neodymium 28,000 30,025 -2,025
Europium 450 500 -50
Terbium 250 500 -250
Dysprosium 1,100 900 200
Yttrium 7,300 13,600 -6,300
24
Source: Kingsnorth (2012)
2016 projected market balance, Kingsnorth (tonnes REO)
Supply/Production Demand Balance
Lanthanum 49,500 34,300 15,200
Cerium 77,750 70,500 7,250
Neodymium 28,000 30,025 -2,025
Europium 450 500 -50
Terbium 250 500 -250
Dysprosium 1,100 900 200
Yttrium 7,300 13,600 -6,300
25
Source: Kingsnorth (2012)
Outline
Market overview
Broader context
CMI
26
Broader context
‘The periodic table is under siege’
Observations
Demand growing quickly. . .supply is fragile:
Insecure, or
Slow to catch up with demand growth, or
Constrained by fundamental geochemical scarcity
Leading to high or volatile prices, physical unavailability (or both)
‘Critical’ element: essential in use, subject to supply risk
27
28
Source: Energy Critical Elements, American Physical Society & Materials Research Society, 2011.
British Geological Survey, relative supply-risk index, 2012 (1=low to 10=high)
Index
Rare earth elements
9.5
Tungsten 9.5
Antimony 9.0
Bismuth 9.0
Molybdenum 8.6
Strontium 8.6
Mercury 8.6
Barium 8.1
Carbon (graphite)
8.1
Beryllium 8.1
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Index
Germanium 8.1
Niobium 7.6
Platinum group elements
7.6
Cobalt 7.6
Thorium 7.6
Indium 7.6
Gallium 7.6
Arsenic 7.6
Magnesium 7.1
Tantalum 7.1
Selenium 7.1
Source: British Geological Survey (2012)
Each element has its own story…
Concentrated production: small number of mines, companies, or countries Sometimes linked with geopolitical risks
Import dependence is the wrong way to measure risk
e.g., Be, rare earths, platinum group
30
Each element has its own story…
Concentrated production
Geologic scarcity
average crustal abundance
nuances
degree of concentration above the average by geologic processes
extent of historical exploration
e.g., Re, Rh, Te
31
32
Source: U.S. Geological Survey
Each element has its own story…
Concentrated production
Geologic scarcity
Reliance on byproduct production
Supply may be (a) unresponsive to increased price of byproduct and (b) very responsive to reduced price of main product
e.g., In/Zn, Te/Cu, Ga/bauxite
33
Broader context
‘The periodic table is under siege’
Each element has its own story
Criticality is dynamic—what is critical today may not be critical tomorrow (and vice versa)
34
35 Source: Mark Johnson (DOE)
36 Source: Mark Johnson (DOE)
Broader context
‘The periodic table is under siege’
Each element has its own story
Criticality is dynamic—what is critical today may not be critical tomorrow (and vice versa)
Small, fragmented, non-transparent markets volatility; risks to investors, producers and users
37
Broader context
‘The periodic table is under siege’
Each element has its own story
Criticality is dynamic—what is critical today may not be critical tomorrow (and vice versa)
Small, fragmented, non-transparent markets volatility; risks to investors, producers and users
Market forces provide powerful incentives to alleviate criticality, but governments have essential roles
38
Outline
Market overview
Broader context
CMI
39
40
- An energy innovation hub, U.S. Department of Energy - ‘Eliminating supply risks, enabling energy technologies’
CMI overview
What: Research to reduce supply risks for materials essential to clean-energy technologies; up to $120 million over 5 years
Why: To remove impediments to technology development and deployment, to accelerate innovation
How: Develop technologies to (a) increase & diversify supply and (b) reduce demand
Who: A consortium of 18 institutions, led by the Ames Laboratory
41
42
43
The CMI Partnership
44
- What is ‘critical’ depends on who, where, and when you ask - CMI’s initial focus:
- 7 elements - 4 technologies
- magnets - phosphors - batteries - photovoltaic materials
45
- Research across the supply chain to: - Diversify global supply chains - Develop substitute materials - Enhance efficiency of use, re-use, & recycling - Support the activities above
‘Produce More, Use Less’
CMI today and in the future
Mantra: eliminate supply risks, enable energy technologies
How?
Innovate to produce more, use less
Develop the next generation of scientists and technical experts
Anticipate rather than respond to material-supply crises
Finally: develop mutually beneficial international collaborations
46
Final thoughts
Market overview, broader context, CMI
Among the key overall points
Rare earths are one of several ‘critical minerals’
Rare earths are not rare in a geologic sense, rather their supply is fragile because of geographically concentrated production and immature process technology
Market forces will go a long way to solving ‘criticality’ (but take time); governments play several essential roles
47
References and additional information
Critical Raw Materials for the EU, Report of the Ad-hoc Working Group on defining critical raw materials, European Commission, 30 July 2010.
Eggert, Roderick G. “Critical Minerals and Emerging Technologies,” Issues in Science and Technology, Summer 2010, pp. 49-58.
Eggert, Roderick G. “Minerals go critical,” Nature Chemistry, vol. 3, September 2011, pp. 688-691.
Energy Critical Elements: Securing Materials for Emerging Technologies, a report by the APS Panel on Public Affairs and the Materials Research Society (American Physical Society and Materials Research Society, 2011).
Kingsnorth, Dudley. The Global Rare Earth Industry: Poised for Growth, IMCOA, November 2012.
48
References and additional
information (continued)
National Research Council. Minerals, Critical Minerals, and the U.S. Economy (Washington, DC, National Academies Press, 2008).
United States Department of Energy, Critical Materials Strategy, December 2010.
United States Department of Energy, Critical Materials Strategy, December 2011.
United States Geological Survey, China’s Rare-Earth Industry, Open-File Report 2011-1042.
United States Geological Survey, The Principal Rare Earth Element Deposits of the United States—A Summary of Domestic Deposits and a Global Perspective, Scientific Investigations Report 2010-5220.
49
Contact information
Roderick G. Eggert
Division of Economics and Business
Colorado School of Mines
Golden, Colorado USA 80401
E-mail: [email protected]
Phone: +1 303 273 3981
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