REEs: Rare Earth Elements

Source: USGS, “The Principal Rare Earth Elements Depositsof the United States—A Summary of Domestic Deposits and a Global Perspective”, By Keith R. Long, Bradley S. Van Gosen, Nora K. Foley, and Daniel Cordier. Scientific Investigations Report 2010–5220.

Group 8:Claudia BenciniMarta CenniAntonio De SantisGiulia Stola

REEs group15 lanthanide elements: lanthanum, cerium, praseodymium, promethium, neodymium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium.

yttrium and scandium (similar chemical properties)

17 REEs in total

Why REEs is an interesting topic?

Dong Xiaiping

1979

China dominates

Trade policy China and

WTO

Application in high tech and EVs

“The Middle East has oil, but China dominates the rare earth elements.”

REEs as…“catalysts for high

tech-living”

Many defense applications, including missile guidance

systems, mine detection, anti-missile defense and

communication systems…

…from energy efficient compact fluorescent light bulbs to hybrid cars, automotive catalytic converters and wind turbine generators…

…from hard disc drivers to flat panel displays, iPods and magnetic resonance imaging scans.

REEs & their use

REEs & their use Some REEs will experience higher demand growth.For example, demand of Neodymium is expected to rise because of a combination of current uses and future incresing demand of automobiles and wind turbines.On the other hand, demand of Lanthanum will decrease. Lanthanum is used in nickel metal-hydride batteries that will be replaced by lithium batteries.

Where are they deposited?Rare Earth Elements are rarely concentrated into mineable ore deposits.

Alkaline rocks and carbonatit

es

REE deposits worldwide(three categories)

Deposits sufficiently explored to estimate a mine plan resource (Australia, Canada, U.S., China)Resources for well-explored deposits that have not yet been subject to a feasibility study that includes a mine design (Australia, Canada, Greenland, Malawi)Unclassified resources (Australia, Canada, Brasil, Burundi, Kenya, Kyrgyzstan, South Africa, Turkey, Vietnam))

World Rare Earth Mineral Resources

U.S. and world resources are contained primarily in bastnäsite and monazite.

Bastnäsite deposits in China and the United States constitute the largest percentage of the world's rare-earth economic resources

Monazite deposits in Australia, Brazil, China, India, Malaysia, South Africa, Sri Lanka, Thailand, and the United States constitute the second largest segment.

Dr. John Burba, ChiefTechnology Officer at Molycorp Minerals, the company that runs the only rare earth mining operation in the U.S., pointed out that, “Mining gold is a much simpler procedure than miningREEs.” One method in processing gold ore is simply to mix theore with sodium cyanide. The gold is then leached right out. Rare earth elements are far more complicated and costly to extract.

REE PROCESS

Rare Earth Element Mine Production Significant amounts of rare earth elements are produced in only a few countries.

oChina is the dominant producer of rare earth elements (over 97% of the world mine production on a rare earth oxide equivalent basis).

oOther countries with notable production in 2009 were: Brazil, India, Kyrgyzstan and Malaysia.

o Minor production may have occurred in Indonesia, Commonwealth of Independent States, Nigeria, North Korea and Vietnam.

oSignificant exploration and new mining activity is expected from Canada and Australia.

Source: http://geology.com/articles/rare-earth-elements/

United States, almost entirely from Mountain Pass, California; China, from several deposits; all other countries combined, largely from monazite-bearing placers.

Rare Earth Element Mine Production (2)

Three periods of production are evident: the monazite-placer era, starting in the late 1800s and ending abruptly in 1964; the Mountain Pass era, starting in 1965 and ending about 1984; and the Chinese era. The United States once was largely self-sufficient in REE, but in the past decade has become dependent upon imports from China.

A GROWING DEMAND FOR REEs

Decades of underinvestment in the mining and separation of REEs elements

This bring the industry ill-preparated to meet the current level of demand

Over the years, only China has recognized the strategic significance of these resources and has succeeded in gaining a near monopoly on production (97%)

Since 2005, global investments in clean energy have grown by more 230%, with worldwide investments in 2009 totaling more than 162 billionREEs are an increasingly strategic grouping of raw metal that are included in a broad range of cutting edge technologies including the energy-related technologies

The demand for those technologies, and therefore the essential REES , has and will likely continue to increase dramatically

Supply deficit of REO by 2014 (the demand over time is expected to exeed the industry’s capacity to produce them)

INCREASE

Number of

application for

REEs

INCREASE

Demand of clean energ

y

THREAT OF AN

ACUTE SHORTAGE IN REEs

Forecast of demand-supply of REEs in 2014

Source: Oakdne, Lanthanide and Alternatives, May 2010, P39 (Data from IMOCA)

Despite the name, “RARE EARTH” are not so rare, the

problem is to find an economic way to extract

them.

Some industries could suffer for a low level of supply, for

example wind and Evs industry.

It is NECESSARY to discover new mines around the world BUT it is extremly complex

WHY?

Refaning process is very risky (thorium and uranium, radioactive elements, often accompany REEs

Difficulty in the separation of elements

Financial risk (because China dominate that market political risk)

o Two of the worl’s major mines: Mount Weld in Australia and California’s mountain Pass have the approvals and infrastructure but are still working to secure financing

o South Africa, Vietnam, Kazahhistan, Australia would come online in the next 2-4 years

It would take a start up project between 6-7

years before it can begin production

Exploration

FinancingObtaining the proper

permits

CHINA1960: Cina started to increase the level of investment in exploration improving the method of producion due to the fact that it began to view REEs as a strategic resources1980: Chinese mining operation increased drammatically and between 1978-1980 the production rised around 40%

Government support

Cheap labour

Low enviromental standarts

China produce REO at a lower cost than the rest of the world

China overtakes US as the world’s primary producer

Annual REO Production 1985-2009

China’s policy restrict the exports of rare earth raw materials in particular for dysprosium, terbium, thulium,

lutetium, yttrium, and other heavy rare earths.

Chinese internal demand of rare earth elements increase and domestic

consumption is becoming a priority for China.

consumer

electronics

economic

growth

production of wind

turbines

2006 2007 2008 2009 2010 2011Official Chinese production quota

86,520

87,020

87,620 82,320 89,200 93,800

USGS reported production

119,000

120,000

120,000 129,000 130,000

112,500

Chinese export quota

61,560

60,173 47,449 50,145 30,259 30,246

China’s Rare Earth Production and Exports, 2006-2011

Source: China Ministry of Land and Resources. U.S. Geological Survey. Ministry of Commerce of China. Note: USGS production data exceeded Chinese quotas, some of which is attributed to illegal mining

Quota decreasing

both in terms of the number of companies allowed to export as

well as the volume allowed

Bring a dispute resolution case against China in the WTO

A letter written by four U.S. Senators in March 2011 asked to the Obama Administration to propose at each multilateral bank, including the World Bank, to oppose the approval of any new financing to the Chinese government for rare earth projects in China.

W.T.O. Filings – In October 2010, the U.S. Trade Representative initiated an investigation into China’s clean energy sector, in response to a petition filed by the United Steelworkers Union. Among other things, the petition argues that China’s rare earth export quotas violate the World Trade Organization General Agreement on Tariffs and Trade.

Electric Vehicles & REEs EVs and Hybrid cars reduce

hydrocarbon consumption requirements by replacing or supplementing a traditional internal combustion engine, with a battery-powered electric traction drive

REEs in EVs

REEs are in many parts of Evs: motors, NiMH batteries, windows, glass, catalytic converters, electronic equipment

The technology for Evs Rare Earth Permanent

Magnet

It stimulates the flow of electrons from one atom to another; and by doing so, it can generate a substantial amount of electrical energy.

These electric traction drives can supplement or even totally replace the internal combustion engine!

NiMH batteriesNickel-metal hydride (NiMH)

batteries currently dominate the HEV market

rare earth LANTHANUM is the key input for these batteriesThey store about 100 watt-hours per kg and are

much more thermally stable than the lithium

ion batteries

China and quality issuesSintered neodymium permanent

magnets are used in the car industry and largely produced OUTSIDE China

China produces huge amounts of neodymium magnets but has to deals with:

Net shape

Need to be treated

China focuses permanent magnet production on Quantity more than quality

Japan Because of these problems related to

Chinese production

Japan imports REEs from China but produces permanent magnets internally

Nickel batteries The first successful NiMH battery using rare earth metals

was patented by Stanford Ovshinsky, founder of Ovonic Battery Company (Energy Conversion Devices Group)

ECD still holds the patent, but has licensed it to a number of companies.

The largest producers are Japanese with 95% of NiMH batteries for EVs

Primearth EV Energy was former Panasonic Electric Vehicle Energy, is a joint venture between Matsushita Electric Industrial Co., Ltd. and Toyota Motor Corporation; it produces all batteries for Toyota's vehicles

supplies, among others Honda and Ford.

Business Case – Toyota PriusLaunched in 1997First hybrid vehicle to be mass

produced Up to 2011 more than 3

millions of Prius have been sold

Year 1997

1998 1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Jan-sept 2010

Total

Japan 0,3 17,7 15,2

12,5

11,0

6,7 17,0

59,8

43,7

48,6

58,3

73,1

208,9

254,2

826,9

North America

- - - 5,8 16,0

20,3

24,9

55,9

109,9

109,0

183,8

163,3

144,3

105,9

939,1

Europe - - - 0,7 2,3 0,8 0,9 8,1 18,8

22,8

32,2

41,5

42,6

35,5

206,1

Other - - - 0,01

0,2 0,2 0,4 1,9 2,9 5,3 7,0 7,7 8,4 5,8 39,7

Total 0,3 17,7 15,2

19,0

29,5

28,1

43,2

125,7

175,2

185,6

281,3

285,7

404,2

401,3

2011,8

source: Toyota, 2010In thousands

Sales of Toyota Prius have always increased since its launch in 1997

Business Case - Toyota

Toyota Prius uses about 10kg of Permanent Magnet NiMH Battery

Permanent magnet

NiMH battery

Lanthanum - 5400 gNeodymium 300-600 g 900 gPraseodymium 75-150 g 1800 g Dysprosium Smaller

amounts -

Cerium - 900 g Terbium Smaller

amounts-

Source: Rare earth content of permanent magnet and NiMH battery in a Prius (Sources: Bubar, 2011 and Maruo, 2011)

The NiMH battery in Prius cars were firstly launched in 1997.Nowadays are smaller and lighter

1 battery package weights 37 kg (was 67kg in past)

Present and future perspectives

Permanent

magnets

Shortage of

dysprosium and

neodymium

Patents

Li-ion

Need to reduce dependence

Open for new possibilities

Li-ion batteriesLITHIUM is the key input for lithium-

ion batteries

Great power density. They store about 150 watt-hours per kg

Li-ion batteriesGS-Yuasa Group

Set up in 2004 from JV between Mitsubishi and Mitsubishi Motors

the group also includes a Honda JV and Toyota is one of the principal shareholders.

GS Yuasa is choosing Li-ion technology instead of NiMH for Hybrid and Electric vehicles

Other companies choosing Li-ion for hybrid and electric vehicles are e.g. Hitatchi, Saft, SB LiMotive and Toshiba.

From NiMH to Li-ionWe believe that in future hybrid and

electric cars will have an increasing success.

We are observing a shift from NiMH batteries to Li-ion batteries (best for PEVs)

Many battery manufacturers are producing and/or developing Li-ion batteries instead.

Even Toyota will be using Li-ion batteries in a coming plug-in version of Prius.

NiHM Li-ion

…and what about China?Has the largest reserves of REEs

Is increasing battery production

2002 2003 2004 2005 2006 2007 2008 20090%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

78% 74%65% 62% 61% 58% 56% 55%

11% 14%19% 21% 22% 23% 24% 25%

6% 8% 12% 13% 14% 16% 18% 18%

5% 4% 4% 4% 3% 3% 2% 2%

Rest of the worldSouth KoreaChinaJapan

Data scource GBI research

…and what about China? (2)Is already moving toward Li-ion

battery in EVs

References http://geology.com/articles/rare-earth-elements/ Rare Earth Elements Letter International, the independent information and advice bulletin

for Rare Earth Elements and related investments, January 2011 USGS, “The Principal Rare Earth Elements Depositsof the United States—A Summary of

Domestic Deposits and a Global Perspective”, By Keith R. Long, Bradley S. Van Gosen, Nora K. Foley, and Daniel Cordier. Scientific Investigations Report 2010–5220

The Product Chains of Rare Earth Elements Used in Permanent Magnets and NiMH Batteries for Electric Vehicles, T. ERIKSSON ,D. OLSSON

www.toyota.com Future of global advanced batteries market outlook to 2020: Opportunities analysis in

Electronics and transportation, GBI Research, January 2010. Rare Earth Element – Industrial mineral resouces. Stephen B. Castor and James B. Hedrick. Cornell University ILR School. China-U.S. Trade Issues, Wayne M. Morrison, Congressional

Research Service, 29-8-2011. Carnegie Mellon University. Offshoring Technology Innovation: A Case Study of Rare-earth

Technology Brian J. Fifarek, Francisco Veloso, Cliff Davidson. 1- 1- 2007. Technology review: Can the U.S. Rare-Earth Industry Rebound? Friday, October 29, 2010. Rare earths and clean energy: analyzing China’s upper hand. John Seaman. September

2010. Speech at the 6th International Rare Earths Conference. Nov. 9-11, 2010, Hong Kong,

China . INTERDISZIPLINÄRES ZENTRUM FÜR OSTASIENSTUDIEN. From Resource Advantage to

Economic Superiority: Development and Implications of China’s Rare Earth Policy Daniela Lackner and Susan McEwen-Fial. N°6 october 2011.

Thanks for your attention!!!

Q&A