Engineering & Mining Journal

OCT 2017

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RECLAIMING RARE EARTHS OCTOBER 2017 • E&MJ; 67 www.e-mj.com REE project at the Jeddo Coal Co. in east- ern Pennsylvania. There Perry described the effort to extract REEs from coal as "extremely important." TMR's CEO Dan Gorski said its process could enable the country to "begin to reduce our total de- pendency on Chinese REEs with REEs re- covered in Pennsylvania," according to a TMR press release. That is a noble and increasingly pop- ular goal indeed, but one that history proves could be problematic. The Actinides Problem At the same time Marchese was being interviewed for this article, the CEO of American Elements Corp., Michael Silver, was lobbying the Trump administration to nationalize Mountain Pass, the shuttered open-pit REEs mine located roughly half way between Los Angeles and Las Vegas. The mine was once America's only poten- tially large-scale REEs mine. Silver said his goal is to turn the plant at the mine into a national lab capable of processing ore from mines around the continent and by U.S. allies into REE oxides. Once owned by Chevron, the mine was purchased in 2008 by a consortium spearheaded by Goldman Sachs that went to market as Molycorp. The latter then systematically deceived the public before eventually filing for bankruptcy in 2015, according to James Kennedy, REEs sector consultant, former iron mine owner, and author of Earths in Review - A Decade of Decline and Deception. Kennedy is the subject of a new book, Sellout: How Washington Gave Away America's Tech- nological Soul and One Man's Fight to Bring it Home. Coincidently, last month, Mountain Pass passed to a consortium backed by China's Leshan Shenghe Rare Earth Shareholding Co. Rival bidder Tom Clarke, owner of ERP Strategic Minerals, said he will challenge the sale in court. The reality that REEs supply is of national security and strategic impor- tance is what fueled the wave of inves- tors onboarding with Molycorp in 2007 and 2008, Kennedy reported. Molycorp promoted itself "as the best company to challenge China's monopoly." At the time, there were hundreds of REEs min- ers seeking startup money. Molycorp at- tracted investors like moths to a flame, Kennedy reported. "The financial, tech- nology and defense press coverage verged on euphoric." After being ranked as one of the year's top investments, reality set in. Ultimate- ly, the mine contained only lower value REEs, Kennedy reported. "These facts were concealed from investors, Con- gress and the Pentagon by promoting an over-simplistic narrative," he reported. "Wall street and the Pentagon bet the bank on Molycorp." The company never produced or supplied heavy lanthanides or commercial quantities of yttrium oxide, he reported. There are a number of reasons for the resulting bankruptcy, most having to do with the economics of processing REEs. For one, China owns the value chain, which likely cannot be reproduced stateside without a major government initiative. That is no accident, and China strategically manipulates the REEs mar- kets to sink potential competitors, Ken- nedy said. Another reason is what Ken- nedy called the actinides problem. "That means your rare earths are tied up min- eralogically with thorium and uranium," Kennedy said. "That material is classified as source material. Consequently, the li- abilities associated with processing that make the material unrealistic." Liabilities means handling what is effectively nuclear waste in accords with the United States Nuclear Regula- tory Commission's 10 CFR 40 Part 75, Safeguards on Nuclear Material. Due to it, heavy mineral sand miners "currently dispose of massive amounts of high-val- ue heavy rare earths every single day on purpose," Kennedy said. "The entire REEs supply and value chain was termi- nated worldwide because of this regula- tion. China picked up all the production because China is not a member of the NRC or the IAEA." Prior to the regulation, America's supply of REEs came from heavy min- eral sands, phosphate or iron deposits, Kennedy said. "It was always this free byproduct from some other commodity," he said. "When this 1980 regulation came along, the suppliers and end users realized that they had been dealing with source material for decades and that if somebody inquired about their historical disposal practices they may end up being a superfund site and being sued out of business." For this reason, Kennedy said he views the DOE's funding opportunity as strictly political. "It reflects a legitimate desire of congressmen and senators in coal states to relieve some pain," he said. "From an economic and a viability standpoint, it is unrealistic." That is because concentrat- ing REEs means concentrating actinides. "Coal-based rare earth extracts will also have a source material issue," he said. "Why would a coal company that is al- ready financially struggling take on a nu- clear source material liability?" Marchese, however, disagrees. "Not all REE deposits have radionuclides," he said. "Based on the testing we've done of the coal overburden, the uranium and thorium are virtually undetectable." TMR will design an environmentally responsi- ble plant, he said. "The process is very efficient, with a minimal environmental footprint." Silver said not all REEs are mineralog- ically bound to actinides. "You're failing to mention the ionic clays in Southern China that are not radioactive" that con- tain heavy REEs, he said. Currently, DOE is conducting research seeking to solve the actinides problem, Szymanski said. "DOE's research ad- dresses the production and management of waste products, like the potential gen- eration of radioactive elements uranium and thorium." Making America Autonomous Again Clearly, the stage is set for a hero to emerge. Somebody will arrive at a solution that starts to unwind China's global REEs value chain hegemony. It could come from a private/public part- nership involving the DOE, academia and American coal miners. It might come from a nationalized processing lab. It might come from the Kennedy team's lobbying efforts for a multi-na- tional cooperative to root a REEs value chain stateside. The three camps are not mutually exclusive. Whatever solution emerges, it will have to survive whatever China does in re- sponse, Kennedy said. China has demon- strated willingness to flood the market to bankrupt a competitor, he said. Accordingly, the acquisition of Moun- tain Pass by a group backed by a Chinese firm appears to be either psychological warfare or an egregious purchasing er- ror, Kennedy said. "I hope they like their desert real estate," he said. "Good luck building condos there."

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