{"id":8072,"date":"2024-08-13T13:14:28","date_gmt":"2024-08-13T13:14:28","guid":{"rendered":"https:\/\/northamericanmining.com\/?p=8072"},"modified":"2024-08-13T13:14:31","modified_gmt":"2024-08-13T13:14:31","slug":"state-of-the-ree-industry","status":"publish","type":"post","link":"https:\/\/northamericanmining.com\/index.php\/2024\/08\/13\/state-of-the-ree-industry\/","title":{"rendered":"State of the REE industry"},"content":{"rendered":"\n

North American Mining<\/strong> reviews the current state and recent developments in the North American rare earth elements industry, highlighting its potential for growth and innovation.<\/strong><\/em><\/p>\n\n\n\n

By Jonathan Rowland<\/em><\/p>\n\n\n

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MP Materials\u2019 Mountain Pass rare earth mine and processing facility, San Bernardino County, California. \u2028Photo: Tmy350 via Wikimedia Commons<\/em><\/figcaption><\/figure>\n\n\n

Rare earth elements (REEs) are a set of 17 metallic elements that are essential components in more than 200 products across a wide range of applications, especially in high-tech consumer products, such as cell phones, computer hard drives, flat-screen monitors, and televisions, according to the U.S. Geological Survey. They also have significant defense applications, including electronic displays, guidance systems, lasers, and radar and sonar systems.<\/p>\n\n\n\n

However, their role in producing technologies critical to the net-zero energy transition has recently brought these minerals into the spotlight.<\/p>\n\n\n\n

For example, neodymium (or NdFeB) magnets \u201care the strongest, most efficient permanent magnets commercially available,\u201d said Matt Sloustcher, senior vice president of Communications and Policy at MP Materials, which owns the Mountain Pass REE mine in California. \u201cNdFeB magnets enable the functionality of electric motors, actuators, and generators in hybrid and electric vehicles, robots, wind turbines, drones, electronics, and defense systems. As the economy electrifies and becomes more automated, the importance of REEs and NdFeB magnets will increase.\u201d<\/p>\n\n\n\n

The International Energy Agency (IEA) expects demand for REEs to grow sixfold by 2040. Although not actually rare, China dominates current supplies of REEs. Again, according to IEA figures, the country accounts for over 60% of mine production but up to about 90% of refined REE production. These supply-side issues have made REE supply a political issue.<\/p>\n\n\n\n

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\u201cREEs were discovered in China in 1927,\u201d Greg Gillian, vice president of Mining, Minerals, and Metals at consultancy, Stantec, told North American Mining. \u201cSmall-scale production started in the 1950s. It was not until the late 1980s that the Chinese government became interested in larger-scale REE production, with the Chinese REE industry undertaking significant research into REE chemistry and applications. The Chinese government began adopting export quotas tied to the potential for REEs in future technology sectors.\u201d<\/p>\n<\/blockquote>\n\n\n\n

In the 1990s, \u201cChina established partnerships with Japan, the US, and Canada to support further research and committed government funding for new facilities and scaling innovative technologies. This catapulted China to the forefront of REE production,\u201d Gillian concluded.<\/p>\n\n\n\n

Fast forward a few decades and China\u2019s influence over REE supply is now causing geopolitical headaches for policymakers. While it is true that MP Materials\u2019 Mountain Pass has made the U.S. the second-largest producer of REEs after China, it remains the only operating REE mine in North America. A second, at Vital Metal\u2019s Nechalacho-Thor Lake in Canada, undertook a five-month mining campaign in 2021, but it is not currently operating. The company announced a deal to sell its remaining stockpiled REE material from that campaign to the Saskatchewan Research Council in June 2024.<\/p>\n\n\n\n

There is also only one REE processing facility. However, two more are under development, noted Stantec\u2019s Brian Mashford, senior vice president of Mining, Minerals, and Metals: one in Utah and another in Saskatchewan.<\/p>\n\n\n\n

\u201cFrom a strategic point of view, more domestic REE supply and processing capacity is needed,\u201d argued Donald Swartz, CEO of American Rare Earths, who is developing the Halleck Creek REE project. It is a point Ashley Burke, senior vice president of Communications at the National Mining Association (NMA), agreed with, telling North American Mining that \u201cwe need vastly more mines to come online to supply the growing global need of the world\u2019s hungry manufacturing lines.\u201d<\/p>\n\n\n\n

Securing a North American REE supply chain also \u201cgoes beyond securing raw materials; it includes the entire supply chain down to the component level,\u201d said MP Materials\u2019 Sloustcher, noting China\u2019s additional dominance over the manufacturing of alloys as finished magnets. \u201cDiversifying and creating balance across the supply chain by onshoring production of metals, alloys, and magnets is thus critical.\u201d<\/p>\n\n\n\n

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\u201cWe see the development of domestic supply chains outside of the mines as crucial,\u201d agreed Stantec\u2019s Mashford. \u2028\u201cWithout an established manufacturing sector in North America, the ultimate value of REEs will never be realized.\u201d<\/p>\n<\/blockquote>\n\n\n\n

There has already been movement by the Biden administration here. In May 2024, President Joe Biden instructed U.S. Trade Representative Katherine Tai to impose significant tariffs on Chinese imports, including permanent rare earth magnets and critical minerals (including REEs). \u201cThis is an integral first step toward reshoring the REE industry,\u201d American Rare Earths\u2019 Swartz said. \u201cIt is encouraging to see the Biden administration acknowledge that the US can no longer rely on geopolitical rivals to supply materials essential to national security.\u201d<\/p>\n\n\n\n

In addition, the U.S. government is taking \u201cimportant steps through grants and loans from the Department of Defense (DoD) and the Department of Energy (DoE) to support mining and processing,\u201d said the NMA\u2019s Burke. Indeed, according to figures from the DoD, the department has awarded more than $439 million to establish domestic REE supply chains, including separating and refining U.S.-mined REEs and developing downstream processes to convert those into metals and magnets.<\/p>\n\n\n\n

Yet, \u201cfar too few mines have achieved full federal permitting and advanced to production under this administration, and that has to change,\u201d concluded Burke. \u201cIt will take strong and decisive action from a growing bipartisan group of lawmakers to get things done and streamline the permitting process \u2013 something so many on both sides of the aisle have said is a priority.\u201d<\/p>\n\n\n\n

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Challenges to REE supply chain development
<\/strong>In addition to political hurdles around mineral development, there are \u201ckey economic and technical challenges to developing a dependable and sustainable domestic REE supply chain in North America,\u201d explained Stantec\u2019s Gillian. \u201cWe often find REEs in low concentrations and dispersed in the earth, making them both difficult and expensive to extract, while project and permitting is a lengthy process. These factors make REE projects less attractive to the investment community than other critical minerals such as lithium.\u201d<\/p>\n\n\n\n

The processing of REEs \u201calso takes more energy than other elements,\u201d continued Gillian. \u201cREEs also often exist in and around uranium and other radioactive materials,\u201d added Gillian\u2019s colleague, Mashford, \u201cwhich can release harmful chemicals into the environment, with long-lasting impacts, unless managed carefully.\u201d<\/p>\n\n\n\n

Combining these factors, REE projects tend to have a much higher capital intensity than other mineral projects. \u201cGovernment funding needs to increase to secure domestic resources,\u201d concluded Mashford. \u201cFrom extraction to downstream domestic manufacturing, investment from government agencies may help, especially when other investors are hesitant. We also require more government investment in innovation and technology to overcome the environmental challenges associated with REE mining. This could mean potentially shorter permitting for the REE mining and processing.\u201d<\/p>\n\n\n

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Supersacks of neodymium-praseodymium oxide at MP Materials\u2019 Mountain Pass site. Photo: Michael Tessler<\/em><\/figcaption><\/figure>\n\n\n

REEs in profile: \u2028MP Materials<\/strong>
MP Materials<\/a> is a fully integrated U.S. REE miner, mineral processor, refiner, and magnet manufacturer, owning and operating the Mountain Pass mine. In 2023, the company produced about 12% of global REE mine production and has produced over 40,000 tons of rare earth oxides (REO) in concentrate in each of the past three years. The company has also begun production of separated neodymium-praseodymium (NdPr) and other refined REEs at a newly commissioned processing facility co-located at Mountain Pass. This \u201crepresents a strong foundation from which to build out the downstream permanent magnet supply chain,\u201d said Senior Vice President Matt Sloustcher.<\/p>\n\n\n\n

The company is further extending its downstream business by constructing a fully integrated NdFeB magnet facility in Fort Worth, Texas. This will transform REEs produced at Mountain Pass into metals, alloys, and finished NdFeB magnets, establishing an end-to-end U.S. supply chain. Production of magnet precursor materials is expected to begin later this year, with finished NdFeB magnets anticipated in late 2025 for sale to General Motors and other customers.<\/p>\n\n\n\n

\u201cAlthough we have focused heavily on initiating production of separated REO over the past three years, we have never lost sight of the opportunity to pursue growth in our upstream business,\u201d continued Sloustcher. \u201cOur technical and operations teams have been working to develop and pilot high-return process improvements to our existing concentrator facility that better utilize the entire Mountain Pass resource.\u201d<\/p>\n\n\n\n

The company employs a cutoff grade of 2.5%, which is \u201chigher than many development projects,\u201d Sloustcher said, and \u201cgives a sense of what might have been discarded as uneconomic in the past.\u201d Over the past 18 months, the company has piloted how to extract value from these marginal feedstocks. \u201cWhile it is early days, the pilot data is encouraging. Over the next four years, we are confident we can increase our overall concentrate production by approximately 50% with a modest capital investment.\u201d<\/p>\n\n\n

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Stantec supported American Rare Earths in developing an updated JORC scoping study at Halleck Creek in Wyoming. Photo: Stantec<\/em><\/figcaption><\/figure>\n\n\n

REEs in profile: \u2028American Rare Earths<\/strong>
American Rare Earths<\/a>\u2019 flagship project at Halleck Creek, Wyo., has \u201cthe potential to be a world-class REE project and offers expedited state permitting, as we have designed the mine \u2013 to be known as Cowboy State Mine \u2013 on Wyoming State Mineral Leases, rather than on federal land,\u201d CEO Donald Swartz told North American Mining. \u201cWe recently released the Halleck Creek Scoping Study, which confirmed the low-cost scalability of the project with a Resource of 1.8 million metric tonnes of magnetic REEs.\u201d<\/p>\n\n\n\n

The scoping study outlined the potential to produce at $40\/kg. In comparison, China Northern Rare Earths, the world\u2019s largest integrated producer, recently published operating costs of $50\/kg, noted Swartz. \u201cThese costs make the project very compelling, as it can be permitted, developed, and constructed very quickly in parallel with the phase-in of the most recent tariff announcements.\u201d<\/p>\n\n\n\n

A DoD\/Darpa research project preconcentrated the Halleck Creek ore using conventional technology at a 12:1 ratio. Additional studies have shown the leaching process does not require \u2018cracking\u2019 of the ore. This contrasts with other hard-rock deposits, which require temperatures of 1,000\u00b0C to process. These factors make the project \u201cmore environmentally friendly than others while being competitive even with the subsidized state-owned entities of China,\u201d added Swartz.<\/p>\n\n\n\n

\u201cWe are currently in the next steps of permitting, metallurgy, and proceeding to a pre-feasibility-level engineering study,\u201d concluded Swartz. \u201cWe began another drilling campaign in early July and continue to move forward with plans for a test mine, as well as the Cowboy State Mine, at 400 acres initially, to lower CAPEX for market entry and reduce financing risk.\u201d<\/p>\n\n\n

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A large mineral processing plant in China. China currently dominates REE production and mineral processing. North America needs to develop a more robust manufacturing sector to catch up. Photo: Stantec<\/em><\/figcaption><\/figure>\n\n\n

REEs in profile: \u2028Lynas Rare Earths<\/strong>
In addition to operations in Australia, Lynas Rare Earths<\/a> is constructing a rare earths processing facility in Texas with funding from the DoD. The facility will be located on a 149-acre site in Seadrift and produce both heavy and light REEs for the U.S. defense industry and other commercial manufacturers. Lynas\u2019 Mt Weld REE mine in Western Australia will provide feedstock.<\/p>\n\n\n\n

During the first quarter of 2024, detailed engineering, procurement, and approvals activities continued for the Seadrift facility. Procurement activities are ramping up, with earthworks expected to start at the site by the end of this calendar year, subject to all necessary approvals, and operations scheduled to begin in FY2026 (1 July 2025 to 30 June 2026).<\/p>\n\n\n\n

Lynas \u201cwas established from the ground up as an ethical and environmentally responsible REE miner and producer,\u201d CEO and managing director Amanda Lacaze told North American Mining. \u201cWe invest heavily in research and innovation, focusing on improving our processes and technologies. At our Mt Weld mine, we are investing over $30 million in a state-of-the-art water recycling facility and are in final negotiations for a gas-firmed hybrid renewable power station. We also plan to implement technology at our Seadrift location to recycle approximately 90% of our process water and pilot a chemical recycling system that targets a significant reduction in Scope 3 emissions from chemicals used in our separation process.\u201d<\/p>\n\n\n

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Mountain Pass separations pad. Photo: Michael Tessler<\/em><\/figcaption><\/figure>\n\n\n

REEs in profile: \u2028ElementUSA
<\/strong>In contrast to the other REE projects discussed here, ElementUSA<\/a> is not mining REEs but aiming to recover REEs, among other elements, from the tailings (known as red mud) of alumina refining. This material is \u201cprimarily iron oxide \u2013 hence its color,\u201d Chris Young, chief strategy officer at the company, explained. \u201cBut it also contains residual alumina and other minerals, including REEs. Content depends on the properties of the bauxite, but we have measured 3000ppm REE content at our Gramercy site in Louisiana, including neodymium, praseodymium, and scandium.\u201d<\/p>\n\n\n\n

\u201cCore to the process is converting the iron oxide into metallic iron, which we separate out and for supply into the US steel industry,\u201d explained Young. \u201cThis leaves a slag with a high concentration of REEs. We then remove the neodymium and praseodymium using conventional solvent extraction. None of the technologies used in the process are novel; they are all proven in commercial applications. We are now working to improve the economics of the process, as well as expanding our research efforts and collaboration with other companies to tap into other technologies.\u201d<\/p>\n\n\n\n

The extraction of REEs from red mud (as well as from other industrial residues, such as coal tailings) is \u201ccompelling for several reasons,\u201d concluded Young. \u201cWe are dealing with an economic and environmental liability while providing essential minerals and local jobs. It is also worth noting that there are four billion tons of red mud globally. That is a significant amount of potential value.\u201d<\/p>\n\n\n\n

<\/p>\n\n\n\n

Future of REEs in North America<\/strong>
What, then, of the future? \u201cWe would like to see a more sustainable REE extraction process. This would help improve public perception and could help facilitate new mine permitting and funding,\u201d said Gillian. \u201cWe would also like to see improved engagement with Indigenous communities,\u201d added his Stantec colleague, Mashford. \u201cSince REE deposits are often in remote areas of Canada and the U.S., it will be crucial to engage with these communities early in the process to improve permitting timelines, provide new or improved infrastructure within the communities, and create jobs for local people.\u201d<\/p>\n\n\n\n

Finally, as Mashford concluded, \u201cwe would like to see more support, both via funding and social sentiment, to mine REEs domestically. This will help the North American economy by creating jobs in the mining and manufacturing\/downstream use sectors. It would also allow us to be a strategic global partner in creating resilient and diversified permanent magnet value chains.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

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