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Rare earths the new frontier

Lynley Donnelly

South Africa has to start developing strategies to take advantage of its deposits of limited metals, similar to China.

The world’s largest economies are at each other’s throats at the World Trade Organisation. The reason? Rare earth elements or rare earth metals, which are key ingredients used in a host of technological applications that define our modern world.

These include advanced magnetic materials for wind turbine generators and other renewable energy applications, according to Leon Kruger, manager of hydrometallurgy at Mintek.

Rare earth elements are also used in catalytic materials for vehicle engines and the creation of phosphors used in energy-efficient lighting, light-emitting diodes, liquid crystal and plasma displays in cellphones, laptops and television sets. Certain rare earths are also used in the manufacture of military weapons systems, according to a report from the United States Congressional Research Service released last year.

Earlier this month the US, Japan and the European Union filed a dispute against China at the World Trade Organisation related to China’s export restrictions on rare earth elements.

China holds about 50% of the world’s rare earth reserves, according to a report last year by consultancy firm Ernst & Young, and it is the dominant producer.

China dominating supply
To the disgruntlement of other economic powerhouses, China has used this dominance to retain a stranglehold on the supply of rare earths.

The name rare earth elements is misleading, said Kruger, pointing out that they occur in the same abundance in the Earth’s crust as nickel, cobalt, tin and lead and were widespread across the globe.

But because of their geochemical properties, they are typically dispersed and not often found in concentrated and economically exploitable deposits, hence the term “rare”.

The geology associated with most rare earth deposits was also complex, which made even the economically viable ones difficult and costly to process, Kruger said.

A total of 17 rare earth elements exist, according to the congressional report, with spectacularly enigmatic names such as cerium, europium, dysprosium and thulium, to name a few. They are divided into light or more abundant rare earth elements and heavy or less abundant ones.

South Africa and Canada have “significant rare earth elements potential”, the report notes, and reserves are also found in Australia, Brazil, India, Russia, Malaysia and Malawi.

China has several “world-class” assets, according to Kruger, notably at Bayan Obo in Mongolia. It is the largest deposit in the world and, thanks to its size, full economic benefits can be achieved from it. In addition, much less consideration—and subsequently much less expenditure—was given to environmental concerns and waste treatment compared with a typical Western mining operation, said Kruger.

“This means that Chinese production costs are much lower than anywhere else and they have used this advantage very effectively in the last few decades to suppress rare earth projects or developments outside of China.”

Countries scamper for resources
But countries want to secure supplies of rare earth elements because they are increasingly treated as a strategic resource.

Most of the industrial majors outside China—Japan, South Korea, the US, Europe and Australia—have all declared rare earths strategic metals, according to Kruger.

As South Africa ramps up its green-economy drive, including efforts to develop sustainable technologies locally, rare earth elements are likely to become increasingly important.

Although they did not discuss rare earths in detail, recently released ANC policy documents on state intervention in the minerals sector noted that “increasing political interest in the industrialised countries has been focused on metals such as — the rare earths” that “have a relatively low economic value but are difficult to substitute and play a strategic role in the economy of these countries”.

South Africa’s reserves were given as about one million tonnes of contained rare earths by the US Geological Survey, said Kruger, but this was probably “vastly underestimated”.
“A realistic estimate is that South Africa is likely to be in the top five worldwide,” he said.

Thorium, an alternative nuclear fuel, is often associated with rare earth elements. It is chemically similar to rare earths in its behaviour and found in the same monazite deposits that contain them.

The Steenkampskraal mine in the northern Western Cape, formerly a thorium operation, had among the highest known concentration of rare earth elements in the world, said Kruger. The mine has been bought by Canada’s Great Western Minerals Group, which is working to return it to production by 2013, according to its website.

In July last year the company announced an agreement with Chinese company Ganzhou Qiandong Rare Earth Group Ltd to build a rare earth separation plant near Steenkampskraal.

South Africa had a unique opportunity to take advantages of its rare earths resources, said Kruger.

“Taking all the potential sources and the elemental distribution of rare earth elements in Southern Africa into consideration, processing in South Africa, as a hub, is probably the only other viable production option besides the US and Australia, outside of China,” he said.

“To realise this potential, South Africa will have to provide incentives for the development of these deposits, while at the same time developing a cost-effective refining facility through which the value of the different deposits in Southern Africa can be maximised.”

A refinery could cost in the region of $750-million. Given that most rare earths miners are not among the world’s majors, they are unlikely to have sufficient capital to invest.

But, Kruger argued, entities such as the Industrial Development Corporation could be brought on board to develop such an operation.

Kruger said there were only two rare earths refineries outside China—one in Malaysia built by the Lynas Corporation of Australia to process ore from Mount Weld in that country and a recommissioned unit in Mountain Pass, California, owned by Molycorp.

“If South Africa can get this right, it should be well positioned to fill the gaps in supply, especially in the longer term, and provide a reliable source of supply to Europe and the East [to countries such as Japan and South Korea],” he said.

The department of mineral resources’ beneficiation strategy for South Africa’s minerals sector does not identify rare earth elements as strategic. It has, however, identified thorium as a critical energy commodity, given its nuclear capability and the fact that it is three times more abundant than uranium.

Peter Craven, general manager of business development at Mintek, said that, although they had not been identified as strategic, rare earth elements had major potential. They were particularly important as part of the energy production value chain because of their role in the manufacture of renewable energy technologies.

Both Mintek and the Council for Geosciences have been active in identifying viable rare earth element resources in South Africa.

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