Issue Date: July 27, 2015
The Struggle To Mine Rare Earths
As two full tour buses arrived at Molycorp’s rare-earth mine in Mountain Pass, Calif., late last month, thick clouds cast merciful shade on the high desert. The mine is located about an hour southwest of Las Vegas, where the temperature was expected to reach 110 °F. Yet, a more ominous shadow lurked over the event: Four days earlier, Molycorp had filed for Chapter 11 bankruptcy.
The visitors were greeted by Jim Sims, Molycorp’s head of communications. “The timing of this event is a little strange,” he acknowledged, “but we are operational.”
The state of operations at the mine is of great interest not just to Molycorp’s creditors but also to manufacturers of products that contain rare earths such as electric vehicles, electronics, wind turbines, lighting, and batteries. Today, 90% of the world’s rare earths are produced in China. It would be closer to 100% but for Molycorp’s output of cerium, lanthanum, neodymium, and praseodymium oxides and carbonates.
China’s near-monopoly gained widespread attention in 2010 when the country lowered export quotas for rare earths, causing prices to skyrocket. Starting in 2012, however, prices began to decline. In May, China did away with the quotas following a ruling from the World Trade Organization.
The price run-up spurred calls for development of rare earths from mines outside of China—in particular the Mountain Pass mine. But mining companies are now caught in a bind: They are working to increase output at a time when lower prices make it extremely difficult to turn a profit. Looking ahead, Molycorp will need to both increase production and obtain higher—or at least stable—prices to survive, goals that can be mutually exclusive in today’s market, experts say.
“If they increase production, they dilute the market—then they’ll need to reduce costs,” explained Zachary Schumacher, market research analyst for the information service Asian Metal. The good news is that demand for some rare earths, such as neodymium and praseodymium used in permanent magnets, is rising by 10–15% per year.
The current incarnation of Molycorp began when a group of investors purchased the 60-year-old and barely operating Mountain Pass mine from Chevron in 2008 with ambitions to redesign it to be environmentally sound and cost-efficient. The firm is still spending money to reach its production goal of 20,000 tons of rare earths per year. Current output at the mine is closer to 6,000 tons. The now-public company owes $1.7 billion to its creditors.
The slower-than-expected production ramp-up is not due to any shortage in the mine itself, which contains probable reserves of 1.5 million tons of rare earths—70 years’ worth of output. Rather, the difficulty has come from setting up and optimizing the chemical- and materials-handling equipment used to separate the rare earths from the ore and remove impurities.
“If a Molycorp executive found a jar of magic fairy dust under his chair that would make every piece of equipment work perfectly, the company could eventually pay off its debt,” said Jon Hykawy, president of materials consultancy Stormcrow Capital.
After disembarking from the bus, members of the tour group donned hard hats and safety glasses. The group, which included customers, investors, analysts, policy-makers, and competitors, then stopped at a large hole in the ground—the Mountain Pass pit mine. At 600 feet deep and three-quarters of a mile wide, the crater is actually small compared with copper or iron mines. Still, the 70-ton trucks used to transport ore out of the hole looked like tiny rectangles in the distance below.
On average, ore in the mine contains 6% rare earths, according to Paul Parasugo, Molycorp’s manager of process development. By using GPS-controlled drills and X-ray sampling, geologists can sniff out higher-content ore, and the ore they process averages about 8% rare earths. “It’s a really good deposit,” Parasugo said.
The geology of Mountain Pass has fascinated scientists since the 1940s. The rare earths are contained in a carbonatite formation made up mainly of bastnäsite, a mixed-lanthanide fluoro-carbonate mineral, and some monazite, a reddish-brown phosphate mineral. A 2005 report by Gordon B. Haxel, rare-earth element resource specialist for the U.S. Geological Survey, was enthusiastic. “This carbonatite contains extraordinary large concentrations of the lighter rare earth elements (La–Gd) and Ba, and is one of the most compositionally extreme, even bizarre, igneous rocks known on Earth,” he wrote.
Unfortunately for Molycorp, the most abundant rare earths in its formation—cerium and lanthanum—fetch the lowest prices. Cerium goes into automotive catalytic converters and is used to polish the glass screens on electronic devices. Lanthanum is used in fuel cells, batteries, and catalysts for refining petroleum.
Where Rare Earths Come From
Have you ever wondered what it takes to obtain the rare earths that help power our high-tech devices? Last month, two busloads full of curious professionals arrived at the Mountain Pass, Calif., mining operations of Molycorp. Visitors were treated to a tour of Molycorp’s open-pit mine, tailings containment, and separation areas.
More valuable are neodymium and praseodymium, which make up about 16% of the mine’s rare-earth content. They are used to make NdFeB permanent magnets, used in energy-efficient electric motors, generators, sensors, and disk drives. The ores also contain less than 1% concentrations of samarium, gadolinium, europium, and yttrium.
Parasugo told the visitors that Molycorp recovers 60% of the rare earths from the ores it handles. The remaining waste material is dried and placed in a double-lined containment area.
Up the hill from the mine and the waste area are buildings that house rock-crushing and milling machinery. Once the rare-earth-containing ore is made into a powder, it is chemically conditioned and mixed with water. The specks with the highest rare-earth content float to the top.
After a few rounds of this process, the resulting solution is thickened and filtered to form a rare-earth concentrate. For this and later steps, Molycorp requires more than 200 gal per minute of water, which the company treats on-site after use.
From this point, it’s all about chemistry. The rare earths in the lanthanide series occur together in the rock and share an uncomfortably close family relationship—their similar atomic weights mean multiple stages of extraction are required to separate them. First, hydrochloric acid is used to dissolve the rare earths in the concentrate, then pH is adjusted with sodium hydroxide to precipitate impurities.
Next, the relatively small amounts of heavy rare earths—samarium, europium, and gadolinium—are taken out of the concentrate. Then the remaining light rare earths—cerium, lanthanum, neodymium, and praseodymium—are removed.
From there, Molycorp uses additional purification steps to produce a mixture of light rare-earth carbonates, which it sells. Additional downstream processes recover, separate, and precipitate cerium and lanthanum and a mixture of neodymium and praseodymium. The leftover brine is cleaned up and used in Molycorp’s on-site chlor-alkali facility to regenerate the hydrochloric acid and sodium hydroxide it uses as solvents.
Molycorp’s operations are reliant on its solvent processes. It has experienced problems with its chlor-alkali plant, solvent storage tanks, and brine recovery system. In March, Molycorp Chief Executive Officer Geoff Bedford told analysts that the worst was behind it. “The ramp-up of our chlor-alkali plant has been a significant challenge but also a success.”
The company’s scientists are still working to optimize the process while raising output. For example, instead of recovering only 60% of the rare earths in mined ores, the company is aiming for 70%.
But the biggest challenge for Molycorp is the prices it receives for its products. In 2011, during the crisis created by the Chinese export quotas, lanthanum oxide sold for about $100 per kg. Now it sells for closer to $2.00. Mixed PrNd oxides, once worth around $200 per kg, sell now for a little more than $50.
If Molycorp were to stop operating, China would once again be essentially the only rare-earth game in town. Molycorp has a big head start on other mines in places such as the Mount Weld mine in Australia, which opened in 2011, or the not-yet-producing mines in Araxá, Brazil, and Bokan Mountain, Alaska.
In the U.S., policy-makers have been looking to clear a path for new mines to open. “There is no substitute for producing the minerals we need right here at home,” Sen. Lisa Murkowski (R-Alaska), chairman of the Senate Energy & Natural Resources Committee, tells C&EN. Relying on imports “threatens our security, our economic growth, and our manufacturing base all at the same time,” she says.
A Senate bill sponsored by Murkowski, the American Mineral Security Act of 2015, contains a host of measures to shore up supplies, but the main thrust of the legislation is to shorten a federal mine permitting process that can take longer than a decade. Similar legislation failed to advance in 2013.
Molycorp’s executives have every intention of surviving bankruptcy, but rare-earth users are nonetheless preparing plan B. They have their eyes on other non-Chinese sources, including the Alaska mine, which is rich with the priciest rare earths—dysprosium, terbium, and yttrium—according to Asian Metal’s Schumacher. “Just because Molycorp is struggling doesn’t mean others can’t do it,” he said. “But it is risky.”
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