Cost effective production processes are also key to bolstering Rare Earth development projects alongside higher spot market prices
----An interview with Dr. Gareth Hatch from Technology Metals Research LLC.
Asian Metal: Hello Dr. Hatch and many thanks for accepting this opportunity to be interviewed by Asian Metal. Firstly, what is your own role and that of Technology Metals Research (TMR), particularly in relation to rare-earth elements (REEs)?
Dr. Hatch: TMR is a consulting and advisory firm, which I co-founded seven years ago to provide independent market intelligence and analysis on the REEs and other critical and strategic materials. Our past and present clients include public and private companies, institutional investors and government agencies and entities. We focus on the challenges and opportunities associated with these materials, particularly with respect to the REE supply chain. We have also managed government-funded research programs focused on the development of new processes, for the production of REEs outside of China.
Asian Metal: I notice that one element of your research has been to list key development projects for the future mining of REEs globally. Given the stagnation on price seen over the last few years - is there still some optimism for investment in these?
Dr. Hatch: Yes indeed. We’ve been tracking non-Chinese REE development projects since before the spike in REE prices in 2010/2011. At the recent low prices for these materials, it is highly likely that existing producers in China are operating at a loss, which is not sustainable. The significant inventories of REEs accumulated in China in recent years, because of over-production, are also a factor in keeping prices down. At some point those inventories will be exhausted, which will be another driver for price increases to more sustainable levels.
TMR tracks almost 60 projects under development. The issues of raising capital to continue these projects means that only a few are currently active; in some cases complex mineralogy and other technical factors are also a big challenge. However, it is certainly possible that a handful of these companies could be competitive, even at current REE prices, if they take the right steps.
Regardless of pricing levels, there continues to be a strategic imperative to develop a REE supply chain that is independent of China. Diversity in the sources of critical materials like the REEs is important for building long-term confidence in the supply chain.
Asian Metal: It has been suggested that prices in China really need to rise quite substantially in order for such operations to receive the necessary investment, do you agree or may other factors facilitate the necessary liquidity these projects require?
Dr. Hatch: Sustained higher prices would certainly help the investment climate for REE and related development projects, but as I mentioned before, prices are not the only factor. A number of companies have recently received significant funding to continue their feasibility work, even at current pricing levels. Having a clear and realistic path to production, that includes cost-effective processes, is key to that. Focusing on the production of the REEs most in demand, such as those for high-performance permanent magnets, is also an important factor.
Asian Metal: Considering the tight margins faced by some producers of rare earth elements, a number have turned to more innovative ways of processing them and particularly those that cut down on harm to the environment, do you feel this would make the products more cost-effective to produce in the long-run?
Dr. Hatch: Absolutely, I believe that using innovative processing will be the only way that new projects will get into production and be profitable. Improvements in minerals processing, extractive metallurgy and separation all have their part to play.
For example, I am involved with Innovation Metals Corp. (IMC), a private Canadian company that has developed a lower-cost method of separating REE concentrates into individual REE products. IMC’s RapidSX process combines the proven chemistry of solvent extraction, currently used in China and elsewhere for REE separation, with a new way of making the chemistry happen more rapidly and efficiently, with much lower capital and operating costs. It is also applicable to other metal concentrates too.
There are other new processes being developed too, such as sensor-based ore sorting as means of removing waste materials early on in the minerals-processing stage, regeneration of acids used in leaching and so on. These new processes could have a significant positive impact on the costs associated with REE production, as well as reducing the quantities of reagents and energy required for the processes.
Asian Metal: Recycling of rare earth elements is also a developing industry and I understand this is also an area of keen interest to your research. Do you think this could make the industry more profitable or would it put further pressure on upstream mining projects, especially those outside of China?
Dr. Hatch: The interesting thing about recycling is that if you can accumulate significant enough quantities of end-of life scrap materials, the equivalent concentration of valuable metals like the REEs can be higher than virgin mined ore materials. The key to profitability for recycling projects is an effective protocol for gathering the scrap materials, combined with cost-effective processes to extract the target metals. Again, the application of new processes is vital.
While some portion of future needs could be served from the recycling of waste materials, the long service life of some of these components, along with growth in future demand for REEs, will mean that new mines will still be required to meet the needs of the REE supply chain.
Asian Metal: Do you think that demand for rare earths is likely to increase over 2017 and are there any specific factors or downstream uses that may cause this?
Dr. Hatch: All signs point to continued demand growth for key applications for certain REEs, such as the high-performance permanent magnets that I mentioned earlier. This is a key factor in the apparent production levels of REEs in China being substantially higher than the official production quotas set for the industry. With magnets, for example, the high-profile demand areas are for drive systems in electric vehicles and generators for wind turbines; but the ongoing switch over to REE-based magnets in more mundane technical and industrial applications, as a means of improving energy efficiency, is also an important driver.
Asian Metal: Besides conventional end-use products such as magnets, are there any exciting new products and developments that could bolster the market over 2017 and beyond?
Dr. Hatch: Usage in magnets will continue to dominate the REE supply chain for the foreseeable future. However, there are always new and improved REE-containing materials and compounds being developed. Examples include special hydroscopic coatings and stabilizers for PVC products.
Asian Metal: Thank-you for taking the time to accept this opportunity to be interviewed. Where can our readers go to find out more?
Dr. Hatch: My pleasure. For more information on TMR and the REE projects under development, readers can visit the Web site at http://www.techmetalsresearch.com ; for more information on IMC and improvements in REE processing, they can see more information at http://www.innovationmetals.com.
