JL: Yes and no. Yes, if somebody creates a central processing facility. Outside of China, I've been counseling people not to commit to building a solvent extraction plant until they've looked at the other technologies that are available. The impediment is that none of the other technologies has been operated at scale. However, pilot plants are underway in North America and Europe for at least two non-solvent extraction technologies.
TMR: What are some companies that could take advantage of these new processing technologies?
JL: U.S. companies that could take advantage of a central processing plant and benefit from relatively low mine development costs would be Ucore Rare Metals Inc. in Australia, Rare Element Resources Ltd. in Wyoming and Texas Rare Earth Resources Corp. in Texas. These projects all are themed to HREE production from hard rock or, in the case of Rare Element Resources, have unusually high HREE content in an otherwise LREE deposit.
Sweden's Tasman Metals Ltd. has an unusually good HREE-themed hard rock deposit.
In Australia, Northern Minerals Ltd. has a deposit of xenotime, the most desirable HREE.
In Africa, Namibia Rare Earths Inc. may be the lowest cost mine of all to bring to production.
The problem with all of these projects is that developing the mine is just step one. Once you do the metallurgy and extract the values you want, you end up with a mixed concentrate. At this point, the only thing you can do with an HREE mixed concentrate is sell it to China or line up to try and get tolling at an acceptable cost from Solvay SA or, perhaps, Shin-Etsu Chemical Co. Ltd.
With today's general commodity price decline, we're seeing unusual declines in the prices of the HREEs, in China at least. The price a Chinese producer gets from a Chinese customer has stayed artificially low. Even though the production of REE permanent magnets has gone up significantly, the price of dysprosium has gone down. For the first time in my adult life I've begun to wonder if the conspiracy theorists might not be on to something.
Hitachi Metals Ltd. owns 600 patents—sort of a monopoly—for modern REE permanent magnets. Twenty percent of Chinese magnet companies are licensees of Hitachi. If General Motors is buying an REE permanent motor in China, it's most likely made by a Chinese company using a Hitachi license. This is starting to decline as Hitachi's patents expire.
The Chinese are coming out roaring in this business. They want direct business all over the world.