Rare earths supplier Lynas Corporation faces delays for the planned Malaysian plant and will now come on line during the first half of 2012. The Concentration Plant started in May 2011 but stockpiled REO’s on site at Mount Weld. The mine is within the Central Lanthanide Deposit (CLD), a resource of 9.9 million tonnes at 10.7% for 1.1 million tonnes of contained REO’s (Rare Earth Oxide).
Meanwhile Molycorp Inc. of US, the second in the race running the Phoenix Project at Mountain Pass, acquired a 90% controlling stake from AS Silmet in April 2011 and acquired final 10% in October 2011 for 100% control. Molycorp now owns 100% of the Sillamäe, Estonia-based facility, known as Molycorp Sillamäe and has successfully integrated it into the Molycorp supply chain. Sillamäe provides years of expertise in rare earth and rare metal production, particularly in the manufacture of high-purity products and rare earth metals separation. It is one of only two rare earth processing companies in Europe.
Drivers in REE demand are magnets. Roskill explains that new direct drive (DD) wind turbine systems which eliminate the gearbox need NdFeB magnets used to turn blades at same speed as the generator with up to 2t for 8MW installations. Annual growth of 11-13% is expected to 2015 in RE permanent magnets with short term substitution of NdFeB with SmCo where possible, but restricted natural occurrence of Sm.
2010 total demand of 125.000 mt REO will grow to 255.000 mt in 2020 (IMCOA). However, the Chinese commerce ministry set its first tranche of export quotas for 2012, a 27 per cent cut to 10.546 mt (9.095 mt of light compounds and 1.451 mt for the medium-to-heavy category) compared with a year ago. Typically, the first tranche represents exports for roughly the first half of the year, while a second quota is issued around July. It also disclosed a new system that would exclude from the quota mining companies that didn't meet its environmental standards.
REO prices surged in the year leading up to August 2011, in some cases to over 30 times above historical levels, creating a frenzy of interest from investors. But Chinese export prices have since declined from their summer highs due to lower demand from overseas end users, leaving some investors with less confidence in the market. Over the same period, Molycorp shares have fallen 48% and Lynas shares dropped 44%. The light rare earths have experienced the sharpest export price drops approving that the balance of demand and supply within the 17 elements is still critical.
However, Chinese Rare Earth Industries Association reports 381 projects by 244 enterprises from 35 countries related to exploration and development of rare earth other than China and India.
Industrial Minerals Company of Australia (IMCOA) mentioned the development of such projects may take 10 to 15 years with a total budget of up to US$1B each. Every ore body is unique; so the process route is project specific. That is why Kingsnorth stressed at the Beijing conference that Pilot plant studies (for non-Chinese projects) are essential to demonstrate technical viability, generate samples for customer approval as basis for sales contracts, provide data for a bankable feasibility study and generate data for an environmental impact statement at the earliest stages possible.
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> Pilot Plant Processing at Anzaplan