Rare earth metals in Somalia
The Difference Engine: More precious than gold
Sep 17th 2010, 18:22 by N.V. | LOS ANGELES
ON A hazy summer afternoon, before the giant thunder clouds have had chance to unleash their fury, one of the most breath-taking sights you can witness is the Painted Desert of northern Arizona looming iridescently out of the mist. Even after swooping among the spectacular outcrops, mesas and buttes of Sedona, or nosing along the rim of the Grand Canyon, from the cockpit of a light aircraft 4,000 feet (1,200 metres) above the ground nothing can compare with the Painted Desert’s palette of multi-coloured rock formations stretching off to the horizon.
The blues, grays and lavenders come from the geologically rapid formation of sediments when water covered the land over 200m years ago. The reds, ochres and pinks hail from the much slower deposition during the Triassic’s dryer periods, when erosion and oxidation had time to work their magic. The pigments that give the fine-grained rocks their hues come largely from the iron and manganese compounds they contain. Other colours found along the desert’s southern fringe stem from the fossilised remains of a prehistoric coniferous forest. How such naked beauty could ever be labeled “badlands” beggars belief. The overall impression is one of geological majesty and extraordinary mineral wealth.
Amid such elemental abundance, your correspondent could not help pondering, as he turned for home, the recent moves by the Chinese to restrict their exports of rare-earth elements—scandium, yttrium and lanthanum, plus the 14 so-called lanthanides. Today, China supplies 97% of the world’s demand for rare-earth metals, thanks to a far-sighted government policy going back to the 1960s that envisaged the rare earths as “the oil of the twenty-first century”.
Now, with burgeoning demand for them at home, the authorities in Beijing have cut back significantly on the export of rare-earth materials. Over the past year, China has reduced exports of them from an annual 50,000 tons to 30,000 tons. In July, the Ministry of Commerce announced exports would be slashed to just 8,000 tons for the remainder of 2010.
With worldwide demand for rare-earth metals amounting to 134,000 tons last year, and only 124,000 tons being produced, the difference has had to be made up from dwindling stockpiles. By 2012, demand is expected to reach 180,000 tons, which could exhaust the world’s remaining inventory. The result has been panic throughout industrial countries.
What makes the rare earths so special is the way they can react with other elements to get results that neither could achieve alone. They are used, a pinch here and a pinch there, to make powerful permanent magnets for lightweight electric motors, phosphors for colour television and flat-panel displays, catalysts for cars and chemical refineries, rechargeable batteries for hybrid and electric cars, generators for wind turbines, as well as numerous optical, medical and military devices. To give just one example, every Toyota Prius has over 25 pounds of lanthanum in its nickel-metal hydride battery.
A misnomer if ever there was one, the rare earths may be strategic and in short supply but they are certainly not rare. Some are as abundant in the earth’s crust as nickel, copper, zinc or lead. Even the two rarest (thulium and lutetium) are around 200 times more common than gold. Minerals containing rare-earth elements are to be found all over the world, especially where iron deposits paint the landscape as red as northern Arizona. The largest source today is a by-product of China’s huge iron-ore mining operations in Inner Mongolia.
The problem is that, though widely dispersed, the rare-earth elements occur in extremely low concentrations. Only a handful or so places exist—in Australia, Brazil, Canada, China, India, South Africa and the United States—where deposits have been found rich enough to justify mining them. Even then, abundance in their host minerals is usually measured in concentrations of a percent or two.
Because of their similar chemical properties, the rare earths tend to clump together in rocks, often along with radioactive thorium or uranium. That makes extracting, separating and refining them difficult. A lot of water, acid and electricity has to be used in the ion-exchange, fractional crystallisation and liquid-liquid extraction processes used to manufacture them. Handling the radioactive and chemical waste produced in the process adds significantly to the cost. Lax environmental standards, along with low wages, has allowed Chinese producers to undercut competitors abroad and corner the market.
Out of curiosity, on his way back from Arizona, your correspondent made a detour via the richest source of rare-earth metals in America. The Mountain Pass mine, on the Californian high plateau, lies on restricted land close to the Nevada border. The discovery was made by prospectors looking for uranium, only to be disappointed when the radioactive samples sent for analysis turned out to contain nothing more than worthless lanthanides along with traces of thorium. That was in 1949. Today, some of the more valuable rare earths can fetch $1,000 a pound ($2,200 per kilogram).
What the prospectors found at Mountain Pass was an igneous ore containing mainly carbonate, sulphate and silicate phases. However, 10% of it was a reddish-brown mineral called bastnaesite—a phenomenally rich source (by rare-earth standards) of cerium, lanthanum, neodymium and other members of the lanthanide family.
For decades, the mine and processing plant at Mountain Pass, owned by Molycorp Minerals of Colorado, was the biggest supplier of rare-earth metals in the world, extracting as much as 20,000 tons of ore a day. It was europium from Mountain Pass, for instance, that made colour television possible. Since 2002, however, the huge open-cast mine there has been dormant, a victim of China’s drastically lower labour costs, California’s increasingly stringent environmental requirements, and delays by state regulators in renewing the mine’s operating licence.
A report published in late July by the Congressional Research Service in Washington, DC, noted that, though global reserves and undiscovered resources ought eventually to be large enough to meet the world’s long-term demand for rare-earth metals, getting new mining projects into production could easily take ten years. Such fears have prompted companion bills in Congress to boost the country’s rare-earth industry through the creation of government stockpiles and loan-guarantees to kick-start mining and refining operations.
Meanwhile, the urgency has prompted Molycorp to raise $500m through a public offering to get its Mountain Pass mine restarted. Not to be left out, Ucore Rare Metals, a Canadian mining company, has begun drilling for rare earths in Alaska. The Lynas Corporation based in Sydney has restarted work on its rich lanthanide deposits at Mount Weld in Australia. Similar developments are now underway in Canada and South Africa.
But digging up more rare earths is just the beginning. Developing a supply chain for them is equally important. In other words, more emphasis needs to be put on downstream operations, such as creating highly pure versions of the metals, fabricating them into alloys, and turning them into permanent magnets, advanced batteries and other components needed by the defence and high-tech industries.
That, after all, is what the far-sighted Chinese are doing. Slashing their exports of rare-earth metals has little to do with dwindling supplies or environmental concerns. It is all about moving Chinese manufacturers up the supply chain, so they can sell valuable finished goods to the world rather than lowly raw materials.
Your correspondent just hopes that, in the rush to exploit rare-earth reserves, America’s wilderness is not ripped as ruthlessly apart as China’s has been. Beneath the Painted Desert of northern Arizona, for instance, doubtless lie mineral treasures galore. The country is all the richer for leaving them in place.
The Scramble for rare earth metals in frontier Africa, including Somalia
Abdulkadir Abiikar Hussein
Africa, Australia and Canada are home to vast reserves of rare earth metals. Rare earth metals are used to build high-tech items from headphones to missiles. Cheap labour allowed China to produce these metals that are essential for technology and weapons industry. Western countries are now trying to free themselves from the Chinese stranglehold over rare earth metals. China stopped exporting earth metals to western industries to obtain political leverage over the West. Rare earth are not as rare as their name suggests. They are some of the world’s most obscure elements used in some of the world’s most familiar devices including cell phones, flat screen TVs and microwave ovens.
While Africa, Australia and Canada have great potentials in rare earth metals, Africa’s potential is estimated to be 50% of the world’s carbonatite deposits. Carbonatites are rocks that are used as pathfinders for the exploration of rare earth metals. They are indicators of where the deposit of rare earth metals can be found.
Carbonatite deposits are found in most African countries, according to geological surveys, with investment likely going to states with little red tape, infrastructure to take ore to ports and deposits large enough to make ventures profitable.
Somalia is a frontier destination for rare earth metals. The vast sand dune formation in Somalia along the Indian Ocean starting from south of Garacad (north of Hobyo) to near Kismayo is a sources of rare earth metals.
A geochemical analysis on the sand dunes between Mogadishu and Marka has indicated the existence of rare earth metals in the dunes, apart from silica sand for glass industry. The studies of Angelluci et al of the Geological Department of the Somali National University discovered. In addition A. Pertini studied some sand samples from the dunes where River Juba enters the Indian Ocean and confirmed the existence of monazite and other rare earth metals as placer resources in the sand.
In addition, the crystalline basement of Bur Hakaba (extending from Yaaq Baraawa through the Dooy to Buur Haybe and to Western Hiiraan) and the northern Golis range basement offer a good potential as a primary resource of rare earth metals.
Now an intensive hunt for rare earth metals is going all over the world:
1. Reopening old mines that were not cost effective in Australia, South Africa, Canada and the USA.
2. Exploration, development and production from new mines in Africa is leading a new scramble.
3. The new involvement of France, UK and USA in Africa is an indication of the scramble for African minerals, oil and gas deposits. This is after the West has seen that China is already better rooted in Africa.
The hunt for rare earths hit a high point at the end of last year when China, which produces about 95 percent of them, made its threat, prompting South Korea to set aside about $1.4 billion in 2011 for supplies and Japan about $650 million.
As prices for the elements started to rise, so did the interest in reviving mines outside of China that closed years ago when they no longer were cost-effective to run.
“Everybody started looking for these rare earths at about the same time. There is really not a lot of difference between certain African countries and Australia or Canada,” said Judith Kinnaird, professor of economic geology at the University of Witwatersrand in Johannesburg.
“Anyone who can bring something together in three to five years is going to be at a great advantage,” Kinnaird said.
DIGGING IN AFRICA
Rare earth stocks were the darlings of 2010. Now investors are casting a discerning eye over the sector, betting that only a handful of companies will survive the race to supply the world with the high-tech metals of the future.
For now, the main hunting grounds are a handful of the revived mines in Australia, Canada, South Africa and the United States where rare earths were extracted before China jumped into the field and priced them out of the market.
These include Molycorp’s Mountain Pass mine in California, Great Western Minerals mine in Steenkampskraal, South Africa; Avalon Rare Metals’ operation in Nechalacho, Canada; Lynas Corp’s facility in Mount Weld, Australia; and Arafura Resources
mine in Nolans, Australia.
Canadian rare earth processor Great Western Minerals Group
says it expects output of 2,700 tonnes a year from its South African rare earth mine in two years’ time.
“Within the next five years, there is going to be extreme pressure on mines outside of China to get into production. There is going to be a significant number of them that are not going to get there based on their own expectations,” CEO Jim Engdahl said in an interview with Reuters.
“It is a very complex business. It is a very complex mining and a very complex metallurgy,” he said. “For the next five years I think you will significant shortages in most of the rare earth elements.”
Analysts said there could be a supply crunch in the next few years when Chinese demand is expected to outpace domestic production, with China then turning into a net importer.
With mining firms eyeing a supply shortage and demand surge, new ventures have been launched around the planet, with several in Africa that include Australia’s Southern Crown Resources’ projects in Zambia, Mozambique and Burundi.
Another promising site is Kangankunde Hill in Malawi, according to the U.S. Geological Survey and Lynas Corp.
But investors should exercise caution given the uncertainties in the field and a new-found push for recyling brought about by Chinese export restrictions.
One problem that major powers face in Africa is that China has developed cosy ties with many resource-rich states, building roads and supplying loans in exchange for minerals that help fuel the Asian power’s hard charging economy.
Countries including Japan, South Korea and Germany may have to offer technology transfer deals in order to better compete with China in the hunt for African rare earths.
For the United States, which relies on rare earths for almost all of its high-tech weaponry, procurement is a matter of national security, with a U.S. Congressional Research Service report advocating a strategic partnership as a hedge against Chinese rare earth hegemony.
“Supporting/encouraging greater exploration for REE efforts in the United States, Australia, Africa and Canada could be part of broad international strategies,” the late 2010 report said.
The 17 rare earths have names like lanthanum, used for making hybrid engines and metal alloys, neodymium, used for auto catalytic converters, hard drives in laptops and petroleum refining, and ytterbium, used for lasers and steel alloys.
Mining presents challenges that include few places where rare earths are in high enough concentration to merit extraction and a more than 20 year gap in knowledge outside of China in how to find, extract and refine the elements.
But the rewards are great. Prices for some rare earth elements skyrocketed at the end of last year, with lanthanum and cerium shooting up more than ten-fold, mining sources said.