Rare Earths: Market Overview, Broader Context, and CMI

Transcription

1 Rare Earths: Market Overview, Broader Context, and CMI Roderick G. Eggert Professor, Mineral and Energy Economics Program, Colorado School of Mines, and Deputy Director, Critical Materials Institute UQ Rare Earth Minerals Symposium, May 31, 2013

2 Rare-earth elements (REEs) Source: 2

3 Rare-earth oxide prices, FOB China (6 January May 2013) Source: metal-pages.com 3

4 Market overview Demand: vitamins of many modern materials 4

5 270 Years of Progress in Magnet Technology Each magnet produces half a Joule of magnetic energy, yet the size has decreased by a thousand fold. Lodestone Ferrite Nd-Fe-B Source: Alex King (Ames Laboratory)

6 Phosphors in Advanced Lighting Red (Eu, Y) + green (Ce, La, Tb) + blue (Eu) phosphors yield white light Sources: sylvania.com; en.wikipedia.com; home.howstuffworks.com; shattershield.wordpress.com 6

7 Rare-earth applications by element Element Lanthanum Cerium Praseodymium Neodymium Samarium Europium Gadolinium Terbium Dysprosium Yttrium Principal Applications Ni-metal-hydride batteries, optics, petroleum cracking catalysts Catalysts, UV light absorption in glasses, polishing media Additive to Nd-Fe-B magnets Nd-Fe-B permanent magnets (motors, hard drives, cell phones, wind turbines, other) Sm-Co permanent magnets Phosphors (the color red in TVs and fluorescent lamps) Host for phosphors, MRI contrast agents, X-ray screens Phosphors (green color) in fluorescent lamps, monitors and TV screens, LEDs, other Additive to Nd-Fe-B permanent magnets to improve hightemperature performance, increase coercivity Host for phosphors, others Source: Gschneidner

8 Potential demand growth (+ 20%) 2012 Actual (tonnes REO) 2016 Forecast (tonnes REO) % Growth Magnets 22,500 36, Metal alloys 22,000 26, Catalysts 21,000 25, Polishing 19,000 25, Glass 7,500 9, Phosphors 9,500 12, Ceramics 6,500 9, Other 7,000 20, Total 115, , Source: Kingsnorth

9 Market overview Demand: vitamins of modern materials Supply: dominated by China, this is changing albeit slowly, not all deposits created equal 9

10 Source: minerals.usgs.gov

11 The supply chain and its geography Stage Mining & concentration Separated oxides Reduction to metal Production of alloys and magnet powders Manufacture of NdFeB magnets Location of Production >95% China >95% China ~100 China 75-80% China 20-25% Japan 75-80% China 17-25% Japan 3-5% Europe Source: Buchert (2011) 11

12 Chinese production, consumption, and exports, (tonnes REO) 12 Source: U.S. Geological Survey; Chen 2011; and other sources.

13 Chinese policies Begun prior to 2010 Production targets (Baotou, Sichuan, Ionic clays) Export quotas and taxes (started with concentrates, over time extended to intermediate products) Recent Industry consolidation into 3-4 major companies More stringent environmental permitting National invoicing system Stockpiling 13

14 ~400 non-chinese exploration & mining projects, of which... Two are in the construction and start-up phase Mountain Pass, California (Molycorp) Mount Weld, Australia (Lynas) Perhaps 20 others are in advanced exploration or engineering, of which 5-10 might come into production by 2020, including (but not limited to): Nolans Bore, Australia (Arafura) Dubbo Zirconia, Australia (Alkane) Steenkampskraal, South Africa (Great Western Minerals) Bear Lodge, Wyoming (Rare Element Resources) Norra Kärr, Sweden (Tasman) Nechalacho, Canada (Avalon) Kipawa, Canada (Matamec) Zandkopsdrift, South Africa (Frontier) Bokan Mountain, Alaska (Ucore) 14

15 Varying Distribution of Rare Earths (%) Mountain Pass, California Bayan Obo, China Longnan, China Xunwu, China Bear Lodge, Wyoming Strange Lake, Canada La Ce Pr Nd Sm Eu Gd Tb trace Dy trace Y 0.1 trace < Sources: US Geological Survey, 2010; Castor,

16 Market overview Demand: vitamins of modern materials Supply: dominated by China, this is changing albeit slowly, not all deposits created equal Prices: 2-tier pricing, significant differences among REEs 16

17 Chinese domestic and world prices for rareearth oxides, February 21, 2013 (US$/kg) Oxide 99% min purity Chinese domestic FOB China Lanthanum Cerium Praseodymium Neodymium Samarium Europium Gadolinium Terbium Dysprosium Yttrium Source: metal-pages.com. Note: Exchange rate of 6.2 RMB/US$ used to convert Chinese domestic prices into US$ prices. 17

18 Dysprosium oxide, 11/15/2007 2/7/2013) Source: metal-pages.com 18

19 Europium oxide, 11/15/2007 2/7/2013 Source: metal-pages.com 19

20 Neodymium oxide, 11/15/2007 2/7/2013 Source: metal-pages.com 20

21 Terbium oxide, 11/15/2007 2/7/2013 Source: metal-pages.com 21

22 Yttrium oxide, 11/15/2007 2/7/2013 Source: metal-pages.com 22

23 Market overview Demand: vitamins of modern materials Supply: dominated by China, this is changing albeit slowly, not all deposits created equal Prices: 2-tier pricing, significant differences among REEs Market balance: availabilities of Nd, Eu, Tb, Dy, Y are of greatest concern 23

24 2016 projected market balance, Kingsnorth (tonnes REO) Supply/Production Demand Balance Lanthanum 49,500 34,300 15,200 Cerium 77,750 70,500 7,250 Neodymium 28,000 30,025-2,025 Europium Terbium Dysprosium 1, Yttrium 7,300 13,600-6,300 Source: Kingsnorth (2012) 24

25 2016 projected market balance, Kingsnorth (tonnes REO) Supply/Production Demand Balance Lanthanum 49,500 34,300 15,200 Cerium 77,750 70,500 7,250 Neodymium 28,000 30,025-2,025 Europium Terbium Dysprosium 1, Yttrium 7,300 13,600-6,300 Source: Kingsnorth (2012) 25

26 Outline Market overview Broader context CMI 26

27 Broader context The periodic table is under siege Observations Demand growing quickly...supply is fragile: Insecure, or Slow to catch up with demand growth, or Constrained by fundamental geochemical scarcity Leading to high or volatile prices, physical unavailability (or both) Critical element: essential in use, subject to supply risk 27

28 Source: Energy Critical Elements, American Physical Society & Materials Research Society,

29 British Geological Survey, relative supply-risk index, 2012 (1=low to 10=high) Rare earth elements Index 9.5 Tungsten 9.5 Antimony 9.0 Bismuth 9.0 Molybdenum 8.6 Strontium 8.6 Mercury 8.6 Barium 8.1 Carbon (graphite) 8.1 Beryllium 8.1 Source: British Geological Survey (2012) 29 Index Germanium 8.1 Niobium 7.6 Platinum group elements 7.6 Cobalt 7.6 Thorium 7.6 Indium 7.6 Gallium 7.6 Arsenic 7.6 Magnesium 7.1 Tantalum 7.1 Selenium 7.1

30 Each element has its own story Concentrated production: small number of mines, companies, or countries Sometimes linked with geopolitical risks Import dependence is the wrong way to measure risk e.g., Be, rare earths, platinum group 30

31 Each element has its own story Concentrated production Geologic scarcity average crustal abundance nuances degree of concentration above the average by geologic processes extent of historical exploration e.g., Re, Rh, Te 31

32 Source: U.S. Geological Survey 32

33 Each element has its own story Concentrated production Geologic scarcity Reliance on byproduct production Supply may be (a) unresponsive to increased price of byproduct and (b) very responsive to reduced price of main product e.g., In/Zn, Te/Cu, Ga/bauxite 33

34 Broader context The periodic table is under siege Each element has its own story Criticality is dynamic what is critical today may not be critical tomorrow (and vice versa) 34

35 Source: Mark Johnson (DOE) 35

36 Source: Mark Johnson (DOE) 36

37 Broader context The periodic table is under siege Each element has its own story Criticality is dynamic what is critical today may not be critical tomorrow (and vice versa) Small, fragmented, non-transparent markets volatility; risks to investors, producers and users 37

38 Broader context The periodic table is under siege Each element has its own story Criticality is dynamic what is critical today may not be critical tomorrow (and vice versa) Small, fragmented, non-transparent markets volatility; risks to investors, producers and users Market forces provide powerful incentives to alleviate criticality, but governments have essential roles 38

39 Outline Market overview Broader context CMI 39

40 - An energy innovation hub, U.S. Department of Energy - Eliminating supply risks, enabling energy technologies 40

41 CMI overview What: Research to reduce supply risks for materials essential to clean-energy technologies; up to $120 million over 5 years Why: To remove impediments to technology development and deployment, to accelerate innovation How: Develop technologies to (a) increase & diversify supply and (b) reduce demand Who: A consortium of 18 institutions, led by the Ames Laboratory 41

42 42

43 The CMI Partnership 43

44 - What is critical depends on who, where, and when you ask - CMI s initial focus: - 7 elements - 4 technologies - magnets - phosphors - batteries - photovoltaic materials 44

45 Produce More, Use Less - Research across the supply chain to: - Diversify global supply chains - Develop substitute materials - Enhance efficiency of use, re-use, & recycling - Support the activities above 45

46 CMI today and in the future Mantra: eliminate supply risks, enable energy technologies How? Innovate to produce more, use less Develop the next generation of scientists and technical experts Anticipate rather than respond to material-supply crises Finally: develop mutually beneficial international collaborations 46

47 Final thoughts Market overview, broader context, CMI Among the key overall points Rare earths are one of several critical minerals Rare earths are not rare in a geologic sense, rather their supply is fragile because of geographically concentrated production and immature process technology Market forces will go a long way to solving criticality (but take time); governments play several essential roles 47

48 References and additional information Critical Raw Materials for the EU, Report of the Ad-hoc Working Group on defining critical raw materials, European Commission, 30 July Eggert, Roderick G. Critical Minerals and Emerging Technologies, Issues in Science and Technology, Summer 2010, pp Eggert, Roderick G. Minerals go critical, Nature Chemistry, vol. 3, September 2011, pp Energy Critical Elements: Securing Materials for Emerging Technologies, a report by the APS Panel on Public Affairs and the Materials Research Society (American Physical Society and Materials Research Society, 2011). Kingsnorth, Dudley. The Global Rare Earth Industry: Poised for Growth, IMCOA, November

49 References and additional information (continued) National Research Council. Minerals, Critical Minerals, and the U.S. Economy (Washington, DC, National Academies Press, 2008). United States Department of Energy, Critical Materials Strategy, December United States Department of Energy, Critical Materials Strategy, December United States Geological Survey, China s Rare-Earth Industry, Open-File Report United States Geological Survey, The Principal Rare Earth Element Deposits of the United States A Summary of Domestic Deposits and a Global Perspective, Scientific Investigations Report

50 Contact information Roderick G. Eggert Division of Economics and Business Colorado School of Mines Golden, Colorado USA Phone: