January 14, 2013 (Source: Popular Mechanics) — China uses its near monopoly on rare earth metals, which are found in everything from phones to drones, as a political weapon. A reopened American mine could change that.
It’s 98 F in the Mojave Desert as I cross an old tailings flat toward the waiting Robinson R44 helicopter and its pilot, Jeff Wilson. Every three weeks for the past year Wilson has made a 40-minute flight in the doorless, 1500-pound light helicopter from Las Vegas to the Mountain Pass mine, a 2200-acre site just over the California state line. An aerial photographer rides shotgun. They’re freelancers, employed by the mine’s owner, Molycorp, to document the rebirth and colossal expansion of what was once the largest and most profitable rare-earth mine in the world. Today, they’ve agreed to share their bird’s-eye view. The photographer has already climbed out of the helo by the time I approach. Extreme heat degrades the aircraft’s performance, Wilson tells me; we need to keep our total weight down. A few cattle graze among scattered Joshua trees just beyond the landing site as I buckle up, grip the edge of the seat, and feel my stomach drop as we rise swiftly up over the brown scrub of the sun-baked desert.
Rare earths is the layman’s term for what chemists know as the lanthanides, a group of 15 elements with atomic numbers 57 through 71 that form the top line of the bottom block of the periodic table. (Scandium, atomic number 21, and yttrium, atomic number 39, are also usually categorized as rare earths.) The minerals have unique luminescent, catalytic, and magnetic properties that make them indispensable to the 21st-century economy. They are used in most per sonal electronics, as well as in the hardware of modern warfare, including sonar systems, cruise missiles, and unmanned aerial vehicles. They are critical ingredients in the super-strong magnets found in wind turbines and hybrid—electric vehicles. Solar panels, compact fluorescent lighting, and fiberoptic cable all depend on the metals. In short, they are essential to national prosperity and national security. Which is why it’s alarming that for most of the past decade China has controlled 97 percent of the world’s supply—and has used its near monopoly as a strategic weapon.
In 2010 a Chinese fishing trawler skirmished with two Japanese Coast Guard vessels near the Senkaku Islands, an uninhabited archipelago claimed by both countries and known in China as the Diaoyus. Japanese authorities detained the trawler’s captain and 14-man crew. A week later, Japan released the crew but held on to the captain. China raised the stakes by cutting off Japan’s supply of rare earths, materials essential to the country’s auto and electronics industries. The day after the media reported China’s action, Japan released the captain.
The incident was a blunt reminder to the world’s industrialized nations of their vulnerability to Chinese economic blackmail. “These are critical resources and arguably are going to be even more important in the years ahead,” says Peter W. Singer, a senior fellow in foreign policy at the Brookings Institution. “Whether it’s flat screens for your jet fighter or flat screens for your den, we’re already seeing [trade disputes], and I think it’s going to continue.”
In 2005 China exported 65,600 metric tons of rare earths, about half of what the country produced. By 2010 exports had been slashed to 30,300 metric tons, and China announced that it would reserve more material for domestic uses and begin stockpiling. Last spring, the World Trade Organization initiated an investigation into China’s export practices. “Their domestic price is lower than their export price, which may not be legal,” says Peter Kelemen, a Columbia University geochemist who has worked as a mineral-prospecting consultant. “And these de facto embargoes all serve to signal to people who make magnets, for example, that it might be better to manufacture magnets in China and export them than buy exported rare earths and make magnets elsewhere.”
Fortunately, most rare earths are, in fact, not all that rare. They’re also not all in China, which has 36 percent of the world’s reserves; the United States has 13 percent. The majority of the elements are found in quantities several times greater than those of better-known materials like copper and lead. But it is hard to find rare earths, which exist not discretely but mixed with one another in rock, in sufficient concentrations to make mining profitable. One place where they are found in concentration is in Chinese- controlled Inner Mongolia. Another is in the ancient Precambrian igneous rock at Mountain Pass.
Wilson circles wide over the mine site. California’s Interstate 15 cuts through the property, gradually climbing to 4700 feet near the mine’s entrance before beginning a long, smooth descent toward Las Vegas. We gaze down at the steady line of cars and the brown, empty expanse of the Mojave on either side. Then Wilson aims the helicopter toward the open-pit mine. The rust-orange, stepped excavation is both huge and somehow much smaller than I’d imagined. There is little activity, just a single mining drill on the distant floor and a couple of big puddles reflecting the deep blue of the summer sky. The entire disturbance is about 70 acres at the surface. Just north of the pit is the milling facility, and beyond that, a huge new waste-disposal area the size of several football fields.
The mine, the mill, and the tailings pad are actually a very small part of the total rare-earth production process. “From a capital standpoint, it’s only 10 to 15 percent. All the rest of it is a very complex chemical process,” says Molycorp’s chief technology officer and executive vice president John Burba, a former Dow chemist who developed many of the new processes that make up what Molycorp calls Project Phoenix. “All these elements have close to the same atomic mass and the same ionic charge,” Burba explains. As a result, separating the rare-earth elements from one another is an extremely difficult and energy-intensive task requiring dozens of steps. “It takes a lot of chemistry,” Burba says. “You use a huge amount of acid and base.” Traditionally, the process also generates a lot of dirty, radioactive waste.
The mountain pass deposit was discovered in 1949 by uranium prospectors out with a Geiger counter. Unfortunately for the atomic-age geologists, uranium was in short supply at the site. Instead, their sensor was activated by the radioactive element thorium, which, along with cerium, lanthanum, and most of the other lanthanides, is found at Mountain Pass. Cerium was the first rare-earth element to find a commercial market (lighter flints), though the much rarer euro pium was the deposit’s first big earner—the element is used to create the red phosphor in color-TV tubes. And when color TV took off in the early 1960s, europium from the Mojave deposit was being used in nearly every TV set in the world.
By the 1970s and 1980s the deposit was meeting all of the U.S.’s rare-earth needs—and much of the rest of the world’s. The California desert operation, which was then owned by Unocal (Union Oil Company of California), employed hundreds of workers, and the separating process produced 850 gallons of salty, radioactive waste water every minute, all of which was piped to gigantic evaporation ponds 14 miles away. It wasn’t until the mid-1980s that a serious competitor appeared: China. Within a decade the low labor costs and extensive government subsidies at China’s mines had driven global prices into the ground.
Then, in 1996, a breach in a Mountain Pass wastewater pipe spilled 350,000 gallons of radioactive water into the nearby Ivanpah Valley. For the next few years Unocal battled over cleanup with regulators, who belatedly discovered that since the mid-1980s the com pany had recorded—but not reported—dozens of additional spills totaling 971,000 gallons. In 1998 Unocal announced it would suspend operations until environmental reviews were complete. Four years later, the mine closed. In 2005 Chevron acquired Unocal, and three years later sold the Mountain Pass facility to Molycorp.
Tailings disposal has also bedeviled Chinese mines, which have atrocious environmental records. A June 2012 Chinese government white paper blames the reduced export quota in part on a production slowdown that’s occurring as authorities address problems, and bluntly reports their scope: “Excessive rare-earth mining has resulted in landslides, clogged rivers, environmental pollution emergencies, and even major accidents and disasters, causing great damage to people’s safety and health …” The Baotou facility in Inner Mongolia is the world’s largest rare-earth mine and arguably the worst offender. “They use a very corrosive sulfuric acid system that actually liberates hydrofluoric acid, which is really bad,” Burba says. “It is so aggressive it solubilizes everything, including thorium.” The Baotou waste is put in a single, enormous holding pond. “Then it leaks into the groundwater,” Burba says. “It carries an acidic, metal-laden solution that’s also radioactive. So that’s the way the Chinese operate.”
My primer on how the new Mountain Pass mine operates came earlier in the day from managing director Rocky Smith. “I’ve been in the mining industry all my life. My grandfather and father both worked in mining,” Smith tells me as we climb into his SUV and crawl up a narrow dirt road that leads to the top of the open pit. Smith is tall and deeply tanned. He has a white mustache and wears a white hard hat and mirrored sunglasses. In his 35-year career Smith has worked at silver, gold, and uranium mines in the American West. Rare-earth mining, he tells me, is most like gold mining. “You’ve got an overburden, and you’re following a grade. It’s not perfectly obvious where it is and where it isn’t.”
We walk in the beating sun toward the chain-link fence at the edge of the pit. Smith points to the far side. “The ore body outcrops at the top of the hill, and then it enters the ground at a 45-degree angle,” he says. “You remove the material off the top, and you follow it down. We’re about 500 feet deep right now.” Geologists think the deposit extends at least 1500 feet into the earth.
We climb back into the car and head farther away from the interstate. Smith points out the crushing facility. “The things we’re doing here are pretty conventional,” he says of the plant, where the raw rubble from the pit is ground to a silt-like consistency. The next step is a flotation process that removes the rare earths—which average 8.24 percent of the extracted material—from the surrounding bastnäsite and other insoluble non-rare-earth minerals. “Think about a big dish washer,” Smith says. “There’s a little bit of fatty acids to help promote froth. These minerals attach themselves to the bubbles and float to the surface.”
Almost everything that happens after that has been revamped since the mine closed more than a decade ago. The key to Project Phoenix, Burba says, is recycling water to recover salt used in the milling process. “Rather than going into a pond, our salt goes in a loop through the plant. So we don’t have 850 gallons of wastewater per minute to dry out. We have virtually no wastewater leaving the site.”
After the flotation process, there are two proprietary impurity-removal steps. These result in highly refined rare-earth chlorides that are then chemically split into what are known as light and heavy rare earths. (Heavy rare earths, which tend to be more rare and more valuable, are processed elsewhere.) For light rare earths, one process pulls out the cerium; another separates lanthanum from neodymium and praseodymium, two elements that are combined to make high-energy magnets—and are likely to be the most valuable minerals coming out of Mountain Pass. “The main use for light rare earths, by far, is magnets,” Columbia’s Kelemen says. “Neodymium magnets are 10 times more powerful per given weight than conventional ferrite magnets. There is no known substitute.”
Molycorp claims that the new chemical processes will double the mine’s rare-earth recovery rate: In other words, the company will extract the same amount of rare-earth elements from half as much ore. And whereas the old Mountain Pass facility depended on the grid for power, the new mine is self- sufficient. A 49-megawatt combined-heat-and-power plant uses gas turbines and electric generators to provide all the site’s processing power, heat, and electricity. The natural gas is piped in from the Kern River pipeline, 8 miles away. The fuel costs for electricity will be about 3 cents per kilowatt-hour. The cost of grid electricity: about 16 cents. “It’s an enormous game-changer,” Burba says. “Because our electricity rate and steam costs are so incredibly low, we can make our own reagents [chemicals used to dissolve rare earths from host rock] from our byproduct salt cheaper than we can buy reagents on the market. So, we have an economically viable, environmentally superior process.”
Unlike the mine’s former off-site evaporation ponds, the new primary waste site is just a few hundred yards from the mill. The word pond is really a misnomer; the new tailings area is more like a field—a perfectly flat, heavily lined 100-acre rectangular pad that will be layered over and over with thorium-infused milling waste whose initial consistency resembles that of toothpaste. “The old technology would have you pump a slurry behind a dike,” Smith tells me. “And, of course, the water has to disengage from the solids, so it’s mobile for a long time.” When it comes to radioactive waste, solid is safer. “Eventu ally you contour it, put your topsoil on it, plant it, and make it look like any hill that you see out here,” Smith says.
The mine’s environmental problems in the 1990s, some experts suggest, were more about government-versus-industry power struggles than a true environmental catastrophe. The wastewater leaks were undoubtedly a major violation of environmental regulations but, given the location, were probably not a significant threat to human health. “There were some [Fish and Game] people worried that it could kill some birds,” David Jessey, a local geologist who teaches at Cal Poly Pomona, says.
This time around Molycorp is making some attempts to befriend local wildlife advocates. In 2011 the company partnered with Chevron (which was required to restitute the land around the old holding ponds) and the National Park Service to build a LEED-certified Desert Tortoise Head Start Facility. The center is designed to help breed and study the threatened lunch-box-size reptiles, which have become a wedge issue in solar-power development throughout the Mojave.
By early fall Molycorp announced that it was on track to produce 19,050 metric tons of rare earths by the end of 2012. By mid-2013 the mine will have the capacity to produce 40,000 metric tons annually—close to a third of current global supply and twice what the mine produced in its heyday. Eighty percent of the 2012 product has already been spoken for, although Hitachi is the only company to make its Mountain Pass relationship public.
Molycorp also plans to expand internationally. In the past two years the startup has acquired a smaller Canadian rare-earth company, developed a spinoff water-purifying enterprise that will rely on Mountain Pass’s prolific supply of cerium, and invested heavily in a joint Japanese venture to process Mountain Pass minerals into rare-earth magnets.
Despite the rapid growth, there have been stark reminders that rare-earth mining will likely remain an unpredictable business. When Molycorp announced its reopening and expansion several years ago, rare-earth prices were near record highs. Since then the market has been volatile, and in August prices—along with the company stock—dropped to their lowest levels in years. The company’s reaction was to double down. In late August it announced a second public stock offering to help fund the rest of the planned expansion at Mountain Pass.
From the air the extent of the growth is evident. The open-pit mine may not have changed much, but all around it is the infrastructure of a modern industrial site. Several new processing buildings—essentially giant chemistry laboratories—are already complete, and as many more are under construction.
The helicopter swings low, taking us near the mine’s entrance for a closer look at several dozen white bags stacked in long, tightly spaced rows. They resemble the white-plastic-wrapped hay bales you sometimes see scattered across farmland. But each of these dishwasher-size Super Sacks is filled with ultrafine powdered rare earths, ready to ship to customers worldwide.
Mountain Pass may never again surpass China in the mined tonnage of rare earths. Even with power generated on-site and improved recovery methods, the mine may still not be able to operate more cheaply than those in China. What it will do is produce the ingredients of the clean-tech economy more cleanly and sell them more fairly than any other mine operating today.
Before heading back to the landing area at the old tailings site, Wilson and I fly northeast, toward the Nevada line, following the vegetation-free seam that marks the trench of the freshly buried natural gas pipeline. In the distance is the startlingly odd profile of the new Ivanpah solar power plant—three dense clusters of reflective panels arranged like worshippers around towering vertical boilers. They seem appropriate neighbors for Mountain Pass—one more symbol of the futuristic, yet fragile, clean-tech economy.Source
"A Golden Opportunity for Precious Metals and Gold Investors"