Colorado firm out to meet demand for rare earth elements
Phil Castle, The Business Times:
A Colorado-based company expects to soon open a revamped mining and processing facility that will help meet growing demand for the rare earth elements required to manufacture a profusion of high-tech products.
The timing couldn’t be more important because China is expected to limit or even halt exports from what’s been the source of nearly all rare earth minerals, said Jim Sims, vice president of corporate communications for Molycorp.
Speaking at a briefing hosted by the Grand Junction Area Chamber of Commerce, Sims outlined the plans of Molycorp, a publicly traded company with headquarters in Greenwood Village and a mining and processing facility near Mountain Pass, Calif.
The company is in the midst of a $781 million effort dubbed Project Phoenix to modernize and expand the Mountain Pass operation, Sims said.
When work is completed next year, the facility will not only increase production of rare earth elements, but also do so in a more environmentally friendly manner and at a lower cost, he said. “It’s a leapfrog forward in new technology.”
Rare earth elements is a term used to describe a group of 17 chemical elements that until about 30 years ago had few uses, Sims said.
More recently, however, rare earth minerals have been used increasingly to manufacture the components of everything from headphones to computers to fighter jets, not to mention wind turbines and hybrid automobiles. What’s more, those components can’t be made without rare earth elements, he added. “There’s no substitute for them.”
Rare earth elements actually aren’t since they’re among the most abundant in the earth’s crust. What is rare, Sims said, is finding them in sufficient concentrations to make mining economically feasible.
The biggest source of rare earth elements is China, which accounts for about 95 percent of the global supply, he said. “The rest of us live on what China provides us.”
China has begun to limit that supply, however, by reducing exports, Sims said. China plans to keep more of the production of rare earth elements to itself as a way to increase manufacturing and employment there. In fact, there’s a chance China soon could become an importer of rare earth elements, he said.
Outside of China, Molycorp owns one of the largest deposits of rare earth elements at its open pit mine near Mountain Pass, located about an hour south of Las Vegas just over the California border. From the 1960s through 1980s, Mountain Pass was a leading producer of rare earth elements under previous ownership. Operations were curtailed, though, because of competition from China that resulted in lower prices as well as environmental problems related to a series of wastewater leaks and spills, he said.
Molycorp was formed to revamp mining and processing operations at the Mountain Pass facility and increase production, Sims said. The company since has secured the permits required to operate the mine and processing facility.
Once completed in July, the new facility will separate and process rare earth elements in more environmentally friendly process without wastewater discharges. What’s more, the process will be less costly, he said.
By one estimated, Molycorp will process rare earth minerals at an average cost of $2.77 a kilogram, less than half the present average cost of processing in China, Sims said. And costs are expected to go up in China.
If everything goes as planned, production will reach 19,000 tons a year by the end of 2012 and 40,000 tons a year by the end of 2013.
“We’re going head to head against China in a global market and we’re going to beat them,” he added.