Market Basics » Rare Earths
Description
Rare earth elements / metals (REEs) generally refers to all of the lanthanides, yttrium, and scandium. Lanthanides are the group of elements on the periodic table starting with atomic number 57 though 71.
The REEs are lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium and yttrium.
Thorium is sometimes included as an REE because of its elemental associations and strategic value.
REEs are divided into "light" and "heavy" categories. Light REEs include lanthanum, cerium, praseodymium, neodymium and heavy REEs include promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium, yttrium and scandium.
Many of the rare earths can be found in fairly high concentrations in the earth's crust. Light REEs are more plentiful and concentrated than heavy REEs. In general, REEs are actually more abundant than many other minerals, such as silver and copper, but are usually not concentrated in large amounts, thus making extraction very expensive.
REEs are prized as "technology metals" that can improve the material properties for metallurgical alloys, electrical conductivity, and instrument sensitivity. There is also an expectation that REOs can provide a mechanical or physical change in form or function.
Trading unit
Trading units vary by the metal, but many are quoted in U.S. dollars per kilogram.
Units for delivery
Also varies by metal and contract volume.
Pricing mechanisms
Spot prices negotiated in long- or short-term contracts.
Avenues of trade
Just as with minor metals, rare earths are not traded on exchanges. They change hands from producers to users on contracts agreed to by the two parties. Some of the contracts are short-term or spot, allowing the parties to interact frequently, while other contracts are for longer terms - six months or a year.
Supply
According to the U.S. geological Survey, rare earths are relatively abundant in the Earth's crust, but actual mineable concentrations are less common than most other ores. Global rare earth resources are contained primarily in bastnasite and monazite.
Most rare earth metal production comes from China, and there are also deposits in the U.S., Australia, Brazil, China, India, Malaysia, South Africa and Sri Lanka.
World demand for rare earth elements is estimated at 134,000 tons per year, with global production around 124,000 tons annually. The difference is covered by previously mined aboveground stocks. World demand is projected to rise to 180,000 tons annually by 2012, while it is unlikely that new mine output will close the gap in the short term. New mining projects could easily take 10 years to reach production. In the long run, however, the USGS expects that global reserves and undiscovered resources are large enough to meet demand.
Demand
REEs have no known substitutes for their unique chemical, magnetic, electrical, luminescence and radioactive shielding characteristics.
Some of the major end uses for rare earth elements include use in automotive catalytic converters, fluid cracking catalysts in petroleum refining, phosphors in color television and flat panel displays (cell phones, portable DVDs, and laptops), permanent magnets and rechargeable batteries for hybrid and electric vehicles, and generators for wind turbines, and numerous medical devices. There are important defense applications, such as jet fighter engines, missile guidance systems, antimissile defense, and space-based satellites and communication systems.
Environmental concerns also can boost demand of rare earth metals used in reducing carbon dioxide emissions and more energy-efficient light bulbs and batteries.
Extraction, Processing, Refining & Supply Chain
Rare earth elements often occur with other elements, such as copper, gold, uranium, phosphates, and iron, and have often been produced as a byproduct. The lighter elements such as lathananum, cerium, praseodymium, and neodymium are more abundant and concentrated and usually make up about 80%-99% of a total deposit. The heavier elements - gadolinium through lutetium and yttrium - are scarcer but very "desirable," according to USGS commodity analysts.
Most rare earth elements throughout the world are located in deposits of the minerals bastnaesite and monazite.
Bastnaesite deposits in the United States and China account for the largest concentrations of REEs, while monazite deposits in Australia, South Africa, China, Brazil, Malaysia, and India account for the second largest concentrations of REEs.
Bastnaesite occurs as a primary mineral, while monazite is found in primary deposits of other ores and typically recovered as a byproduct. Over 90% of the world's economically recoverable rare earth elements are found in primary mineral deposits (i.e., in bastnaesite ores).
Concerns over radioactive hazards associated with monazites (because it contains thorium) has nearly eliminated it as a REE source in the United States. Bastnaesite, a low-thorium mineral (dominated by lanthanum, cerium, and neodymium) is shipped from stocks in Mountain Pass, CA. The more desirable heavy rare earth elements account for only 0.4% of the total stock. Monazites have been produced as a minor byproduct of uranium and niobium processing. Rare earth element reserves and resources are found in Colorado, Idaho, Montana, Missouri, Utah, and Wyoming.
Heavy rare earth elements (HREEs) dominate in the Quebec-Labrador (Strange Lake) and Northwest Territories (Thor Lake) areas of Canada. There are high-grade deposits in Banyan Obo, Inner Mongolia, China (where much of the world's REE production is taking place) and lower-grade deposits in South China provinces providing a major source of the heavy rare earth elements. Areas considered to be attractive for REE development include Strange Lake and Thor Lake in Canada; Karonga, Burundi; and Wigu Hill in Southern Tanzania.
Rare earth ores are dug from open pit and underground mines using conventional dredging, blasting, drilling, and hauling techniques.
The mined ore has to be treated with acids and bases to make metal oxides. Then the oxides have to be separated to make pure metal, which has to be made into alloys, such as neodymium-iron-boron alloy.
Supply Chain
The REE global supply chain has five stages of mining, separation, refining oxides into metal, fabrication of alloys and the manufacturing of magnets and other components.
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