TORONTO (miningweekly.com) – Following the global economic downturn of 2008/9 and a series of events and press reports in 2010 that coined what some referred to as the “rare-earths crisis”, there has been a glut of new rare earths projects starting out, yet few have progressed up the value curve, and rare earths supplies in the West still largely depend on Chinese production.
During 2010, there was global concern when China cut its rare earths exports and appeared to be restricting the world’s access to rare earths, sending the rare earths market into a flurry of action and rare earths prices sky high. This led to a growing realisation that an almost total US dependence on China for rare-earths elements, including oxides, phosphors, metals, alloys and magnets, was a matter of national security.
Some policymakers also expressed concern that the US had lost its domestic capacity to produce strategic and critical materials, and queried what implications this had for US national security.
Strategic management consultancy Cansource International president and CEO Ron MacDonald recently told Mining Weekly that solving rare earths supply security still remained an issue.
He pointed to a time three years ago that saw a big surge in new projects coming to the fore when rare earths prices shot up as a result of China’s clamping down on rare earths export (which in some commentators’ views was a political move), but said most of these had now stalled owing to a lack of funding to move them further up the value curve.
“The financing market for juniors has all but collapsed,” he said.
MacDonald expressed concern that there was currently little primary exploration taking place, which would eventually result in new production being delayed by years. He likened it to the start of a technological food chain, and expressed concern that there was little happening in the world at present to sustain this growing demand.
Produced mainly in China, rare earths are essential for making high-tech items such as smartphones, tablets and hybrid vehicles, and are also used in automotive catalysts.
“It is the critical first step to produce almost every product we know, and owing to the misalignment of primary exploration and increasing demand, including the question of securing these supplies, it would still take even more time for the primary exploration industry to get back on its feet,” he said.
MacDonald said there should be a more coordinated effort to encourage junior rare earths explorers to develop projects. While government incentives such as tax breaks for junior projects are one way to encourage investment in the sector, which is so critical for all future technological development, governments should be wary of not skewing the playing field with overinvolvement.
MacDonald suggested governments should look at a more holistic “North American approach” to securing an adequate rare earths supply, independent of Chinese production and processing. He pointed out that while the US and Mexico had limited opportunities for new rare earths projects to come on stream, Canada had a number of projects with potential.
Another way in which governments could make it easier for junior rare earths companies to get into the market was to assist with research and development (R&D) initiatives.
As a result of rare earths being found in diverse geological formations, there are only a few proven and trusted process-plant flow sheets for extracting the minerals in an economical way; for certain of the best- understood geologies, a plethora of other rare earths deposits are excluded from development, owing to the development of such processing being too costly.
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