Molycorp Chief Offers Glimpse Inside Rare-earth Industry

Rare-earth elements will still be hard to come by, but the supply situation is improving, particularly for U.S. companies that rely on those materials, according to the top official of the only rare-earth mining company in the western hemisphere. Mark Smith, president and CEO of Colorado-based Molycorp Minerals, shared his views on the rare-earth industry as keynote speaker on April 7 at the “Symposium on Rare Earth Materials” sponsored by the ISU chapter of the Materials Research Society.

ImageIn a wide-ranging presentation that covered supply and demand for rare earths, company history and insights into the renovated processing facility Molycorp is working to bring back on line in Mountain Pass, Calif., Smith also talked about the dire need for education and research in the field.

“If you have an engineering or geology degree, we’ll hire you,” Smith told the audience, which included a number of undergraduate and graduate students.  “When we went out to find people for our research and development program a few years ago, we were shocked that there were ZERO courses offered in the U.S. on rare-earth chemistry or processing.”

Smith said that a recently signed cooperative research and development agreement with the Ames Laboratory is intended to serve as the “nucleus” in helping rebuild R&D and academic interest in the field. He added that the ingenuity and innovation shown by students from American universities is unmatched and will ultimately help the U.S. retain its top spot in development of new rare-earth materials and technology.

While there are multiple demands for rare-earth materials, Smith said the largest demand is for permanent magnet generators for wind turbines, particular those in off-shore wind farms because reliability is a bigger issue due to the difficult conditions in making repairs.

“We’re talking with three different wind turbine manufacturers,” Smith said, “and they require about 15,000 tons of rare earth magnets per year to meet their projections. When we bring our Mountain Pass facility on line, our initial production of rare-earth oxide will be 20,000 tons or about 3,200 tons of neodymium-praseodymium. That’s not enough to fulfill even one of these wind turbine manufacturer’s needs.”

The hybrid car market is also placing huge demands for rare-earth materials. According to Smith, it takes about 20 kilograms of rare-earth oxide to outfit a Toyota Prius hybrid. Demand for rare-earths for hybrid cars is expected to increase roughly 19 percent per year for the foreseeable future.

With that level of demand, Smith predicted that prices for rare earths will continue to rise through at least the end of 2011, possibly by another 40-60 percent before eventually relaxing to where they are at currently.

“With high prices and instability in the supply it becomes a matter of survival,” Smith said of the companies relying on rare-earths for their products. “If you can’t keep those industries alive in the short term, then demand will go away.”

Smith talked at length about the company’s renovated Mountain Pass mine which is scheduled to go back into production later this year. The entire operation has been revamped to improve efficiency and be environmentally sound.

“When we began the redesign process, we told our staff we had to have THE lowest-cost of production and be environmentally superior,” he said. “They said ‘you can have one or the other, but not both,’ but we stuck with it and came up with new technologies that met both goals.”

According to Smith, the new process uses less than half the amount of raw ore to produce the same amount of rare-earth oxide. It also uses less than half the amount of water, eliminating the need for evaporation ponds, which cost $2-2.5 million per acre to construct.

The new extraction process uses hydrochloric acid and sodium hydroxide to remove the oxides from the ore and the by-products are water and sodium-chloride, commonly known as table salt. Both the salt and water are then reused to make more acid and hydroxide.

The plant even produces its own electricity through natural gas co-generation. This was necessary because the plant is located at the end of the power grid that also serves Los Angeles, resulting in an unreliable supply.

“The result is that we feel we can produce rare earth oxides for $2.77 a kilogram, compared to the $5.58 a kilogram it costs to produce in China,” Smith said. “When we complete phase II of the project in 2013, we plan to produce 40,000 tons of rare-earth oxide annually.”

The company also has plans to produce more than just raw materials. Production of neodymium magnets is planned, and the cooperative research agreement with Ames Laboratory is part of that goal.

~ by Kerry Gibson