Tim Dyhr of The Mines Group is a very old colleague. Today he reminded me of another of those conundrums of mining and environmental protection, namely the need to mine the rare metals needed to make electric cars, or more specifically the batteries for such cars. He writes in an e-mail, in which he quotes the report at this link:
“Each electric Prius motor requires 1 kilogram (2.2 lb) of neodymium, and each battery uses 10 to 15 kg (22-33 lb) of lanthanum. That number will nearly double under Toyota’s plans to boost the car’s fuel economy.”
Yes, but will they let us mine all the rare earths, Cu, PGM, Mo and Fe we need for the electric car, or the infrastructure to deliver it, or shall we just acquire another natural resources addiction to add to our foreign oil addiction. How many people even have a clue what neodymium is? See Wikipedia at this link.
The report quoted by Tim also notes:
Worldwide demand for rare earths, covering 15 entries on the periodic table of elements, is expected to exceed supply by some 40,000 tonnes annually in several years unless major new production sources are developed. One promising U.S. source is a rare earths mine slated to reopen in California by 2012.
The story about the California mine, called Mountain Pass, is at this link. Seems for a long time this mine, previously owned by Unocal, now owned by Molycorp, started in the 1940s to produce rare earths for use in tracers in ammunition and flints for cigarette lighters. Chinese production/competition and water quality problems lead to closure in 2002. Now, armed with a new owner and a new permit, Molycorp is seeking to become a major supplier once again. They say:
Refinement of previously extracted ore at Mountain Pass resumed on a small scale in 2007, two years after Unocal was acquired by Chevron Corp. Last year, Molycorp was sold to a group of private investors. Chinese rare earth production, meanwhile, has swelled to about 97 percent of global supplies, or 139,000 tonnes of refined material in 2008, experts say. Output is expected to reach 160,000 tonnes a year by the middle of the next decade. But global demand is climbing faster, driven by the clamor for clean energy and clean cars, leading to projections of a 40,000-tonne annual shortfall by 2015.
No doubt Molycorp’s publicity department is behind all these news reports about the need for strange metals and predictions of shortfalls. The interesting question is: are share prices rising in response to this publicity campaign? They are privately owned with the investor group consisting Goldman Sachs, Resource Capital Funds, Pegasus Capital Advisors, and Traxyx America. Keep an eye out for the chance to buy if every they go public. Afterall I suspect that is what all this publicity is about.
Certainly the bloggers are blogging. Here are links to and quotes from some recent postings:
China is considering a ban on export of rare earth metals, which are essential to the production of some alternative energy technologies, including hybrid vehicles and wind turbines. At the center of a brewing international conflict, any such action by China could cripple clean tech manufacturers outside of China, giving the nation a virtual grip-lock on global manufacture of batteries for hybrid vehicles, as well as magnets for wind turbines and other electric motors, reports the Telegraph UK. Enter California, once upon a time the world’s leading producer of rare earth metals. Industrialists propose restarting a neglected mine that is considered the world’s richest concentration of such metals, which include terbium, dysprosium, yttrium, thulium and lutetium.
Molycorp Minerals LLC said on Tuesday that it had begun preparations to restart mining operations at its California-based Mountain Pass mine.
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According to geologist David Jessey, the Mountain Pass mine is an igneous intrusion within the gneiss of the original Precambrian rocks that occurred some 1.4 billion years ago. The only other known sources in the world resulted from similar unique geologic events in western China and western Australia.
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This chart shows clearly that the US was the main supplier before China barged into world markets after arresting Madame Mao and putting her in prison. The US market collapsed. It will now revive, if the news that China won’t sell is true. But even if it revives, it won’t replace the Chinese supplies. This means, the US will make oodles of money on these rare earths which will be really rare.
The unincorporated community of Mountain Pass, California, has little to recommend it to tourists. A scraggly outcrop of rocks and Joshua trees alongside Route 15, it has no kitschy landmarks like the 134-foot-tall thermometer that nearby Baker, California, installed in the Mojave Desert, and no casinos like Las Vegas has an hour up the road. But behind a Band-Aid-colored industry. Mark Smith, the CEO of Molycorp, which bought Mountain Pass in 2000, thinks that the environmental problems that have made the mine’s operation so difficult have largely been resolved, and believes the site can be fully revived. Standing on the edge of what is now a 500-foot-deep pit, he touts his successful negotiations with 18 California regulatory agencies to reopen the mine, and points out some of the company’s newfangled environmental safeguards. (One involves interlocked 18-sided plastic balls floating on standing wastewater pools to limit evaporation and prevent salts from building up after the mine eventually shuts down.) “ But Smith’s effort to turn Mountain Pass into an environmentally friendly producer—call it the Whole Foods of premium free-range sustainable neodymium—comes with costs his Chinese competitors don’t have to pay: for starters, $2.4 million a year on environmental monitoring and compliance. Will carmakers really be willing to pay more for local minerals and homegrown magnets? “Absolutely,” Smith says, noting that the mine’s historic customers in the U.S. and Japan have given their assurances.