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What are Rare Earths?

Navigator Resources Limited

Which are the rare earth metals?

The rare earth metals include the fifteen lanthanide metals (which appear as part of the fold out section at the bottom of the periodic table) and two other metals - scandium and yttrium, which occur with the lanthanides geologically and have very similar properties. The fifteen lanthanides are lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium and lutetium.  Of the fifteen lanthanides, all occur naturally apart from promethium, which is an element that has to be artificially produced in laboratories.

The rare earth metals are frequently divided into "light" and "heavy" groups, where the light rare earth metals are lanthanum to samarium and the heavy rare earth metals are europium to lutetium.  They can also be divided into "light", "middle" and "heavy" rare earth metals, where the light metals are lanthanum to neodymium, the middle metals are samarium to holmium, and the heavy metals are erbium to lutetium.

Periodic Table

------ Intro to REE periodic table

Rare earth metals are used in key modern and future technologies

Rare earth metals are used in a variety of modern technologies with applications in the military, medical, scientific, aerospace and consumer sectors, as well as the increasingly important "green" sector.  The relatively recent discovery of rare earth deposits and subsequent increased availability of rare earth metals means that for many of their applications, there has been limited research into alternatives, and for many rare earth metal applications there is currently no known appropriate substitute.

Over 70% of rare earth oxides (by value) are consumed to make either magnets or phosphors.  In 2008, 38% of rare earth oxides (by value) were used for the production of magnets which in turn are used in CD, DVD and MP3 players, portable mini-hard discs and in hybrid cars.  Rare earth magnets are small, lightweight, and have high magnetic strength so have become a key part of the miniaturisation of electronic products.  The key rare earth metals in magnets are neodymium, praseodymium and dysprosium.

The same year, 32% of rare earth oxide consumption was for phosphors mainly used in TVs and monitors, be they of the cathode-ray tube, LCD or plasma variety.  Europium for example acts as the red phosphor in TVs and monitors.  There is currently no known substitute for europium as a red phosphor.  Phosphors are also important in the medical sector, where they are used in MRI machines.

The next major use of rare earth oxides is in metal alloys, which accounted for 13% of 2008 (by value) consumption.  High performance alloys involving rare earth metals have a wide variety of important uses ranging from aerospace and military hardware, to hybrid cars, high performance sports equipment, superconductors and computer memory chips.

Rare earth metals are important in the glass and ceramics industries, where they are used either to add colour to the glass or ceramic, or for polishing glass.  This end use sector accounted for 9% of 2008 demand by value.  Nearly all glass produced for TV and monitor screens (CRT, LCD & plasma), telescopes, camera lenses, x-ray tubes or lasers (and masers) have to be polished by a rare earth metal abrasive, usually cerium, which polishes both chemically and mechanically.  Rare earth metals (particularly erbium) also act as laser amplifiers in increasingly important fibre optic communication cables.  In the ceramic sector rare earth metals are also important in the production of ceramic capacitors.

The other 8% of 2008 (by value) consumption was for a wide variety of nonetheless important uses.  One of the most crucial is REO use in catalysts, particularly in the refining of crude oil, but also as catalytic convertors in car exhausts.  Another key environmental use of rare earth metals is for the fast growing "energy-saving" fluorescent light bulb sector.  Finally, rare earth metals have a number of scientific, high technology uses including in scientific experiments involving neutron capture, within "nuclear batteries" that are used to power spaceships and satellites, and even potentially in cancer treatment.

------ Intro to REE pie chart

A green economic future demands rare earth metals

Over the last few decades, rare earth metals have found an increasing number of roles in environmental applications.  As the world begins to focus on creating a sustainable global economy, rare earth metals are sure to become an ever more important resource.  Rare earth metals have been important in the automotive sector for a while, used in catalytic convertors.  Now rare earth metals are also used in hybrid cars, both in the car batteries and within components as rare earth magnets, where their low weight offers an advantage.

Hybrid cars use considerably more rare earth metals than conventional cars and this trend is one of the key potential demand drivers for rare earth metals.  Demand is likely to be particularly strong for neodymium.  Neodymium-iron-cobalt magnets are not only key in the electronics sector, allowing for the miniaturisation of disk drives, but hold a monopoly on the use of magnets in hybrid and electric vehicles.  It is believed that each hybrid car contains around 450-1,000g of neodymium, where neodymium magnets can be found in the motors for the alternators, exhaust gas recirculation motors, power steering, brake motors, electric suspension and air conditioning.  There is potential for neodymium magnets to be used in other vehicle accessories such as windscreen wipers, seat and window motors, the water pump and cooling fans.  But by far their most significant use is in the lithium batteries that power the electric car motor, where they greatly reduce the weight of the motor and improve the performance and fuel efficiency of the car.  In this particular area another rare earth metal is also extremely important - dysprosium.  Dysprosium is far more expensive than neodymium, but is required in the most demanding magnet applications such as in vehicle drive trains.

Elsewhere in the environmental industry rare earth magnets are also important for the power generating wind turbines that are helping countries increase the proportion of power generated using renewable energy technologies.  The wind turbine motors that sit atop the tall, thin support structure need to be as light as possible to avoid unbalancing the structure in high winds, in this area again neodymium magnets are the leading available magnet to go in the motors.

Rare earth metals are also important for other products that could help reduce carbon emissions by using electricity more efficiently.  They are currently widely used in energy efficient light bulbs, and another key technology could be in magnetic refrigeration.  The heavy rare earth elements have unusually large magnetic moments and could be used as a rival to conventional gas compression refrigeration, which is very energy intensive.  Potentially magnetic refrigeration could be used in refrigeration, freezing and air conditioning, both commercially and residentially.

Magnetic refrigeration also does not require the flammable or toxic refrigerants required in gas compression refrigeration.  This is another area where rare earth metals are contributing to improving environmental sustainability - reducing toxic pollution.  Rare earth metals have relatively low toxicity when compared to some heavy metals used in batteries. For example nickel-cadmium rechargeable batteries are slowly being replaced by lanthanum-nickel-hydride rechargeable batteries in computer and communications applications and potentially could replace lead-acid batteries in cars.  Similarly, lanthanum and cerium are also increasingly being used in red and orange pigments instead of cadmium and other toxic heavy metals.

Toyota Prius Light Bulb Wind Turbine Orange Pigments
------ Intro to REE Toyota Prius ------ Intro to REE light bulb ------ Intro to REE wind turbine ------ Intro to REE orange pigments

Rare earth metals are highly valuable

------ Intro to REE price table

Rare earth metals form complex mixed oxide deposits that require complicated specialist techniques to separate and refine the metals from the oxides.  This complexity means miners usually sell their rare earth material as a mix of oxides to specialist downstream rare earth metals refiners and fabricators.  There is no central clearing or pricing facility for rare earth metals or oxides, which, for example, the London Metal Exchange provides for base metals, so most rare earth oxides are sold through individually negotiated contracts.

Rare earth metal oxides sell for a variety of prices dependent on the individual supply-demand balance of the particular oxide, however, generally most are priced somewhere between copper metal and silver metal on a per unit basis.  The rare earth oxides are thus an extremely valuable mined product.

Not all rare earth metal oxides are equally valuable.  In general, heavy rare earth metals are more valuable than light rare earth metals; and those with odd atomic numbers are more valuable than those with even atomic numbers.  These values reflect the relative geological abundance of the rare earth oxides, with heavy rare earth oxides considerably rarer than light rare earth oxides and odd numbered rare earth oxides generally rarer than even numbered rare earth oxides (indeed odd numbered promethium doesn't occur naturally at all).

Outside the supply side dynamics, the differing end uses of the rare earth metals also considerably affects their relative prices.  Two of the most valuable rare earth oxides - europium and terbium are in high demand because they are used as phosphors in TVs and monitors, with europium providing red and blue colour and terbium providing green colour.  Terbium is also used heavily in energy efficient fluorescent bulbs, providing a good example of the importance of rare earth metals to the green economy, and supporting the long term strong demand side price fundamentals of the rare earth metals.

In general, rare earth metals have performed better than other industrial metals, such as copper, over the last decade.  Whilst the small, illiquid markets for these oxides means prices are volatile, this volatility has provided more price upside than downside, despite the recent financial crisis.  For example, despite large falls in 2008, neodymium has more than doubled in price on an annualised basis, between 2004 and 2009.  During the same period, the annualised price of dysprosium more than trebled.  By contrast even bullish copper only increased by slightly more than half over the same period.

The final factor when considering the price of a mine's rare earth oxides is the blend of oxides in the mine's resource.  Rare earth metal deposits are made up of a complicated blend of rare earth oxides as such the relative abundance of the differing value rare earth oxides, dictates what potential price the rare earth oxide blend can be sold for.  Those deposits with higher abundances of heavy and odd number rare earth oxides, when compared to other rare earth deposits, will be able to capture higher prices when selling their rare earth oxides.  In general when considering the weighted value of individual mines' and projects' rare earth oxides across the world, a tonne of oxide is worth between US$7,500 and US$10,000 (though some exceptional deposits have considerably higher values).  A tonne of rare earth oxide from the typical mine or project then falls somewhere between the general ranges of copper and tin.

Rare earth metal mining is currently dominated by China

Historically, most rare earth metals came from placer monazite deposits in countries such as Brazil, India and Malaysia.  The rare earth oxides found in these deposits were mainly light rare earth oxides, so only applications for light rare earth metals were developed, as such at this stage there was no real demand for middle or heavy rare earth metals, other than scientific curiosity.  Further, monazite can contain up to 30% thorium (which decays into radioactive radium) and 1% uranium, making many deposits exceed legal radioactive working limits.  Over time these deposits came only to be mined in countries with lower environmental standards and fo this reason there are currently no operating monazite placer mines in Australia.

The discovery of the massive Mountain Pass deposit in California, USA in 1949 opened up the rare earth metals market.  The potential now existed to easily supply large volumes of rare earth metals to the world's largest and most technological advanced economy.  The mine eventually started up, partly due to the invention of colour television which stimulated demand for a number of middle rare earth metals, such as europium and terbium, which helped make the deposit economically viable.  Whilst the majority of rare earth oxides, at Mountain Pass were light rare earth oxides the large volumes of oxide mined meant that enough of the relative small proportion of middle rare earth oxides were produced to stimulate technological innovation using these metals, and in turn rapidly increase demand for them.

Placer Mining Mountain Pass
------ Intro to REE placer mining ------ Intro to REE Mountain Pass

Mountain Pass produced most of the world's rare earth metals until the 1990s when rare earth mines rose to prominence in China. Rare earth oxides were mined very cheaply in China, either as a by-product of iron production at Bayan Obo, Inner Mongolia, or artisanally from lateritic rare earth oxide rich clays in southern China.  The large volume of low cost rare earth oxides coming out of China suppressed rare earth oxide prices and soon drove the other rare earth miners out of business, including both Mountain Pass (which shut in 2002) and many of the monazite placer operations.  By the mid-2000s China was producing around 95% of the world's mined rare earth oxides.

Bayan Obo Clay Mine
------ Intro to REE Bayan Obo ------ Intro to REE clay mine

The Bayan Obo mine in Inner Mongolia is currently the largest miner of rare earth oxides.  The majority of rare earth oxides in this deposit again are light rare earth oxides however the rare earth clays of southern China are very rich in heavy rare earth oxides. This new supply of heavy rare earth oxides from China stimulated innovation using these previously relatively unused metals, and as such China has become the key supplier of rare earth metals for many of the world's most recent technological innovations, especially some of those associated with the green economy.

Rare Earth Oxide Production 1950-2008
------ Intro to REE production graph

There are very few rare earth deposits worldwide

To meet the forecast increase in demand of rare earth metals it is becoming increasingly critical to develop new rare earth metal mines.  Even if most countries and companies around the world were happy with one country, China, supplying nearly all of an increasingly vital resource, it is becoming apparent that China itself may not be able to meet rare earth oxide demand.  According to USGS data, Chinese production of rare earth oxides peaked in 2006.  The Chinese government has become increasingly aware of the environmental and social damage of the artisanal mining of the heavy rare earth metal clays and is considering export quotas for heavy rare earth metals to try and discourage extensive mining of these deposits.

Despite the obvious need for more rare earth mines around the world there are in fact very few known projects.  Mining database, Intierra, lists only around 200 rare earth mine projects, of which only about 20 are at an advanced stage with some kind of resource listed.  The majority of these advanced stage deposits are in Canada, Greenland, USA (including plans to restart Mountain Pass), parts of southern Africa (RSA, Tanzania, Malawi) and Australia.  There are just four advanced rare earth projects in Australia (though there are some by-product rare earth projects) including Navigator Resources' Cummins Range; and the Mount Weld, Nolan's Bore and Yangibana projects.

Known Rare Earth Deposits
------ Intro to REE world map

Where will the new rare earth mines be found?

Despite their name the rare earth metals chemically are not that rare.  Within the crust the most common rare earth metals (lanthanum to neodymium) have a similar crustal abundance to the less common base metals (zinc, copper, nickel and tin) and even the rarer middle and heavy rare earth metals are more common than silver.  They are certainly nowhere near as rare as the precious metals, such as gold and the platinum group elements.  To a certain extent this is reflected in the price of rare earth metals which generally fall somewhere in between the price of the rarer base metals and silver.

Rare Earths Scarcity Chart
------ Intro to REE scarcity chart

Though the rare earth metals crustally are not that rare, because of their chemical compatibility they infrequently form discreet deposits, as occurs with crustally less common but more incompatible metals, such as gold and platinum, and are never found as native metals (like the base and precious metals).  The infrequency with which rare earth metals form enriched deposits means that they went longer undiscovered, less uses were developed, demand was lower and therefore there was less exploration for rare earth deposits.  Ultimately all of this means there are currently very few rare earth deposits known of, when compared to the base and precious metals.  In general rare earth oxides are found with other incompatible elements, such as titanium, phosphorus, niobium, barium, potassium, sodium, rubidium, strontium, thorium, uranium and fluorine; and frequently are associated with alkaline magmas.  Rare earth deposits are known to form in about eight to ten different geological environments.

Traditionally rare earth metals were sourced from placer deposits predominantly in Brazil and India, but also Sri Lanka, Australia, southwestern parts of the USA and South Africa.  These deposits were dominated by light rare earth metals and were also prone to high levels of radioactivity.

The majority of rare earth metals in the mid-late 20th century were mined at Mountain Pass, USA, which was a carbonatite rare earth deposit, with high levels of light rare earth metals and modest amounts of middle rare earth metals, along with much lower levels of radioactivity than the placer deposits.  There are also a number of carbonatite associated deposits such as Nolan's Bore, Australia. Lateritic carbonatite deposits also occur and are likely to become another source of economic rare earth mines.  Examples include Mt Weld and Navigator's Cummins Range deposits, both in Western Australia.

Currently most rare earth metals are mined in China, either from the Bayan Obo mine, Inner Mongolia or from numerous artisanal deposits in southern China.  Bayan Obo is a hydrothermal iron-rare earth deposit, which is currently the largest miner of rare earth metals in the world, mining them as a by-product of the iron.  The majority of rare earth metals in this deposit are of the light variety.  The artisanal deposits in southern China are an unusual type of rare earth bearing lateritic clay, that are both easy to mine and contain high levels of the particularly uncommon heavy rare earth metals.  These deposits are currently the major supplier of these metals, as well as the focus of environmental controversy in China.

Rare earth metals are also found as a potential by-product in a number of other types deposits including iron oxide copper-gold deposits, the most famous of which is Olympic Dam, Australia; alkaline felsic magmatic deposits such as the Kola Peninsula, Russia and the Brockman, Australia; pegmatites including some found in the Northern Territory of Australia; hydrothermal quartz deposits, such as at Karonge, Burundi; fluorite veins, such as at Naboomspruit, South Africa; and skarns as typified by the Mary Kathleen deposit, Australia.

The world needs new rare earth mines, outside China, to meet technological demand.  Rare earth metals are crucial for high technology applications and for a more environmentally sustainable global economy.  Rare earth oxide demand is currently, and likely to continue, to be dominated by magnet demand, particularly as to the use of electric vehicles and wind turbines increases.

China currently mines over 95% of rare earth oxides, but exports may be facing restrictions due to environmental problems during the mining of rare earth clays.  It is therefore vitally important that rare earth oxide mine capacity is developed outside of China.  Australia is one of the few countries that has both economic rare earth oxide deposits and the technical and financial mining knowledge to exploit the deposits, so is set to be a key rare earth miner.  Of the major potential alternative rare earth oxide mining countries (Australia, Canada, USA, South Africa), Australia is the nearest to the key high technology manufacturing markets of Japan and China.