04-02-2014

1

Forecasting future demand and supply of rare

earth elements (REE)

… with some focus on issues related to recycling

Per Kalvig

Recycling Manufacture of

components

Transport Mineral exploration Mining

Processing raw materials

The raw materials supply chain

04-02-2014

2

Sc Scandium

Y(*) Yttrium

La Lanthan

Ce Cerium

Pr Praseodym

Nd(*) Neodym

Pm Promethium

Sm Samarium

Eu(*) Eurobium

Gd Gadolinium

Tb (*) Terbium

Dy(*) Dysprosium

Ho Holmium

Er Erbium

Tm Thulium

Yb Yterbium

Lu Lutetium

Lig

ht R

EE

= L

RE

E

Hea

vy R

EE

= H

RE

E

(*): Critical REO = CREO REE is a group of elements,

with rather simillar chemical

and physical characteristics.

Myth #1: ”Rare earth elements are soil”!

No! They are metals

Kild

e:

Gord

on H

axel, U

SG

S.

REE are rare in the solar system!

But in the crust of the Earth they are as commen as nickel, chromium, tin,

tungsten, titanium and lead.

Not common in the the rockforming minerals. Occurs in special geological

environments.

Myth #2: ”Rare earth’s are rare”!

No! – more common than gold and platinum!

04-02-2014

3

Sou

rce:

Ind

ust

rial

Min

eral

s an

d R

ock

s, U

SGS,

M

od

ifie

d b

y G

EUS

Mineralisation Chemical composition (approx.) Type Max %

REO Ancylite SrREE(CO3)2(OH).H2O Carbonate 46

Bastnaesite (Ce,La,Y)(CO3)F Carbonate 75

Hydroxylbastna. REECO3(OH,F) Carbonate 75

Parisite CaREE2(CO3)3F2 Carbonate 64

Yttrosynchisite (Ce,Y)FCO3 Carbonate 50

Fluocerite (La, Ce)F3 Fluoride 70

Brannerite (U,Ca,Y,Ce)(Ti,Fe)2O6 Oxide 6

Cerianite (Ce,Th)O2 Oxide 81

Euxenite (Y,Ca,Ce,U,Th)(Nb,Ta,Ti)2O6 Oxide 30

Fergusonite (Y,Er,U,Th)(Nb,Ta,Ti)O4 Oxide 46

Loparite (Na,Ca,Y,Ce)(Nb,Ti)O3 Oxide 34

Pyrochlore (Na,Ca,Ce)2Nb2O6F Oxide 6

Samarskite (Y,Ce,Fe,U,Th,Ca)(Nb,Ta,Ti)O4 Oxide 22

Apatite (Ca,Ce)5{(P,Si)O4}3 (F, Cl, OH) Phosphate 12

Florencite CeAl3(PO4)2(OH)6 Phosphate 32

Monazite (Ce,La,Pr,Nd,Th,Y)PO4 Phosphate 71

Xenotime YPO4 Phosphate 62

Steenstrupine Na14Ce6Mn2Fe2(Zr,Th)(Si6O18)2(PO4)7.3H2O Phosphosilic. 31

Allanite (orthite) (Ce,Ca,Y)2(Al,Fe)3(SiO4)3OH Silicate 28

Britholite (Ce, Ca)5(SiO4, PO4)3(OH,F) Silicate 62

Catapleite Na2ZrSi3O9.2H2O Silicate

Cerite (Ce,La,Ca)9(Mg,Fe)(SiO4)6(SiO3OH)(OH)3 Silicate 65

Eudialyte Na15Ca6(Fe,Mn)3Zr3(Si,Nb)Si25O73(OH,Cl,H2O)5 Silicate 10

Gadolinite (La,Nd,Y,Ce)2FeBe2Si2O10 Silicate 52

Kainosite Ca2(Y,REE)2Si4O12CO3.H2O Silicate 38

Mosandrite (Ca,Na,REE)12(Ti,Zr)2Si7O31H6F4 Silicate 33

Thalenite Y3Si3O10(OH) Silicate 63

Zircon (Zr,Th,Y,Ce)SiO4 Silicate 4

Lovozerite H4Na2Ca(Zr,Ti)[Si6O18]. Silicate

Some REE-

minerals are

more economic

More than 300

minerals are known

to carry REE.

REE-grade varies

from mineral to

mineral.

REE-composition

varies from mineral

to mineral.

Different treatment

required to extract

the REE from the

minerals.

Modified by GEUS from BGS, 2010

REO production and development projects

04-02-2014

4

Mt. Weld, Australia

Monazite (%REO)

Longnan, Kina (%REO)

Ion-adsorption clay Kvanefjeld, Greenland

Steenstrupine (%REO)

Kringlerne, Greenland

Eudialyte (%REO)

The REE grade and –ratio is a function of the mineral

(22 vol%) Permanent magnets

(22 vol%) Catalytical processes

(20 vol%) Metallurgical sector incl.

batteries

(13 vol%)Tecnical ceramics

( 8 vol%) Polishing powders

( 8 vol%) Glass additives

( 4 vol%) Phosphors

( 3%) Other

Weapons- and defense industries

Water treatment

Pigments

Fertilizers

Pharmaceutical

Coating

Laser

Fiber optical sector

The most important industry sectors for REE

04-02-2014

5

Technical ceramics

13 vol%/ 7 value%

(NdFeB)-magnets

22 vol% / 37 value%

%

Metallurgical industry and batteries

20 vol% / 14 value%

Phosphorescence

4 vol% /31 value%

Glass industries

industrien

8 vol%/ 2 value%

Catalyst market

22 vol%/ 5 value%

Polishing

powders

8 vol% / 4 value%

0-7%

7-10%

~%

15-20% 10-16%

6-8%

X% expected annual growth

REO consumption related to various sectors (2008)

REO consumption (tREO) varies between regions (2011)

5.300

4.600

3.800

8.500

3.000

1.700 300 700

27.000

18.500 11.500

6.350

7.750

5.500

4.000 6.400

450 500

4.500

500

250 500

100 200

500

400

700 400

500

300

100 200

Permanent magnets

Metallurgical sectors

Catalytical sectors

Polishing processes

Glass additionals

Phosphorescense and pigments

Advanced ceramic materials

Other applications

USA (7.0 kt/y) Japan and rest of Asia (27.9 kt/y)

China (87 kt/y Other (3.1 kt/y)

Based on Roskill, 2012

04-02-2014

6

Annual REO production (t)

Source: Roskill, 2013

Country Production

2011 (tons

REO)

Production

2012 (tons

REO)

USA - 7,000

Australia 2,200 4,000

Brazil 250 300

China 105,000 95,000

India 2,800 2,800

Malaysia 280 350

Other NA NA

Total 111,000 110,000

From: USGS, 2013

UralK

ali Su

mito

mo

/ KA

Zatom

Pro

m

Great W

estern

Lynäs

Mo

lycorp

In

dian

Rare Earth

Ltd.

Forecast 2013:

ROW 24,000 t REO

China 96,000 t REO

Total 120,000 t REO

Annual REO production (t)

Source: Roskill, 2013

UralKali

Sum

itom

o/ K

AZato

mP

rom

G

reat Western

Lyn

äs M

olyco

rp

Ind

ian R

are Earth Ltd

.

Source: Roskill, 2012

Forecast 2013:

ROW 24,000 t REO

China 96,000 t REO

Total 120,000 t REO

04-02-2014

7

China: REO production- and quota 2007-2011

China – export quota 60.200 47.500 50.200 30.300 30.300

Ion-adsorbed clay

Monazite

Ion-adsorbed clay

Ion-adsorbed clay

Baestnaesite

Ion-adsorbed clay

Baestnaesite

Monazite

Ion-adsorbed clay

REE resource c. 30% in China

Myth #3: ”China has monopolized the REE value chain!”

Partly correct! But many efforts to break the monopoly

REE ressource ROW

New producers

?

?

RE mining and

processessing

From ore to til RE-

oxides/carbonates

Refinary of oxides

to metals

Production of alloys

for magnets based

on RE-metals

Manufacture of

NdFeB magnet

80% in China

c. 100% in China

86% in China

75-80% in China

20-25% in Japan

75-80% in China

17-25% in Japan

3- 5% in Europe

04-02-2014

8

REE resource c. 30% in China

Myth #3: ”China has monopolized the value chain of

the REE!”

Partly correct! But huge REE resources excists outside China

REE ressource ROW

New producers

?

?

RE mining and

processessing

From ore to til RE-

oxides/carbonates

Refinary of oxides

to metals

Production of alloys

for magnets based

on RE-metals

Manufacture of

NdFeB magnet

80% in China

c. 100% in China

86% in China

75-80% in China

20-25% in Japan

75-80% in China

17-25% in Japan

3- 5% in Europe

Chinese production quota

Chinese export quota

China’s rare earth’s export markets (2011)

Europe: c. 18% (equivalent to c. 5,500 t REO/y (2011)

04-02-2014

9

Total share of RE-compounds imported by the EU-27

Europe: c. 5,500 t REO/y (2011) + REO from ROW

…. in addition to imported REE-containing components

Total share of RE-compounds imported by the EU-27

Europe: c. 5,500 t REO/y (2011) + REO from ROW

04-02-2014

10

Selected industrial REE activities in Europe (2011)

Country Selected companies Products

France - Rhodia Automotive catalysts, phosphors

Austria - Treibacher Industries AG Catalysts, glass polishign powder, glass fusion, pigments and ceramic glazed, pharmaceutical products

Netherlands - Walker Europe - Goudsmit Magnetic Systems

Magnet production Magnet production

UK - Magnet Applications - Arnold Magnetic Technologies - Less Common Metals Ltd.

Magnet production Magnet production Alloys

Germany - Vacuumschmeltze Magnet production

Estonia - Silmet Rare Metals REE separation; RE-metal production

Forecast: Rare earth market demand (2012 - 2018)

Nd, Pr

Dy, Gd,

Tb

Ce

Dy, La La, Ce

La, Ce,

Nd

Pr, Sm

Ce, La

Nd, Pr Y, Ce

La, Eu,

Tb Ce, La

Pr, Nd

Y, Ce,

La

Nd, Pr

04-02-2014

11

REO and –metal prices 2011 (99% purity)

REE Metal Oxide

Price (US$/kg Price (US$/kg)

Europium 6,600 5,860

Terbium 5,100 4,500

Dysprosium 3,400 2,580

Neodymium 470 335

Praseodymium 280 247

Gadolinium 225 200

Yttrium 210 185

Samarium 190 130

Cerium 165 180

Lanthanum 165 150

Prices FOB China. Source: Metal-pages, 2011

Forecast on REE prices 2012-2018

04-02-2014

12

Country Production

2011 (tons

REO)

Production

2012 (tons

REO)

Reserves

(tons REO)

Reserver

(tons REO)

USA - 7,000 13,000,000 11,800,000

Australia 2,200 4,000 1,600,000 13,400,000

Brazil 250 300 36,000 52,600,000

China 105,000 95,000 55,000,000 36,000,000

India 2,800 2,800 3,100,000 3,100,000

Malaysia 280 350 30,000

Other NA NA 41,000,000 52,000,000

Total 111,000 110,000 110,000,000 168,900,000

Source: USGS, 2013 Source: USGS, 2013 Source: USGS, 2013

Source: Chinese Society of Rare Earth, 2010

+ resourcer

related to about

700 known

occurrences

which are not

yet messured.

Myth #4: ”The World is running short of REE!”

No! The excisting reserves are sufficient for 800 years

Supply and demand forecast (t REO +/- 20%) in 2016

Producers Estim.

REO (kt)

2016

Estim.

REO (kt)

2018

Mountain Pass 19.0 19.0

Mt. Weld 22.0 22.0

Kina 93.8 93.8

Indien 2.8 2.8

Malaysia 0.4 0.4

Brasilien 0.0 0.0

Rycycling 5.0 5.0

Total 143.0 143.0 Sou

rce:

Deu

tsch

e B

ank,

201

3

Demand Supply

2016

Supply – max 257 kt

Supply - min 163 kt

Demand – max 210 kt

Demand - min 190 kt

Sou

rce:

K.R

. Lo

ng,

USG

S, 2

011

Supply ballance: +67 kt to -53 kt

A supply deficit of 50 kt/y leaves room for about 5 new mines. Who is likely to supply the ballance?

04-02-2014

13

Forecasted supply in 2014 (estimated in 2010)

Company Kingsnorth (t REO) Lynas (tREO)

China 80-100,000 60,000

Bayan Obo 20-40,000 20,000

Ion adsorption clays 40-50,000 30,000

Monazite 8-12,000 -

Recycling in China - 4,000

China total 160-170,000 114,000

Mountain Pass 20,000 20,000

Mt. Weld 21,000 22,000

India & Russia - 12,000

Recycling outside China

0 1,800

ROW total 42,000 64,800

Supply forecast for 2014 (estimated in 2010)

Element Kingsnorth (supply) (t REO)

Lynas (supply) (tREO)

Kingsnorth (balance) (tREO)

Lynas (balance) (tREO)

Cerium 80-85,000 66,500 Up to 25,000 +7,500

Lanthanum 52-57,000 43,400 -3,000 to +7,000 -13,700

Neodymium 33,000 31,200 -1,900 -14,200

Yttrium 9-13,000 9,500 -5,000 to +3,000 -1,200

Praseodymium 10,000 9,100 +2,100 -7,000

Samarium 4,000 3,500 +2,600 +2,300

Gadolinium 3,000 2,300 +700 +900

Dysprosium 1,800-2,000 1,700 -500 to +100 -1,100

Erbium 1,000 n.d. +60 n.d.

Europium 850 450 +10 -110

Ho-Tm-Yb-Lu 1,300 n.d. n.d.

Terbium 400-500 330 -100 to +100 -290

Total 190-210,000 167,980

Based on Öko-Institut 2011

04-02-2014

14

Recycling of REE - part of a sustainable strategy

(22 vol%) Permanent magnets

(22 vol%) Catalytical processes

(20 vol%) Metallurgical sector incl.

batteries

(13 vol%)Tecnical ceramics

(8 vol%) Polishing powders

(8 vol%) Glass additives

(4 vol%) Phosphorescense

Total recovery depends on a

number of factors:

e.g.:

Collection f.x.: 30%

Dismantling &

pre-processing f.x 60%

Smelting & refining: 95%

f.x. Total: 17%

Recovery will vary from

element to element

Technical ceramics

13 vol%/ 7 value%

(NdFeB)-magnets

22 vol% / 37 value%

%

Metallurgical industry and batteries

20 vol% / 14 value%

Phosphorescence

4 vol% /31 value%

Glass industries

industrien

8 vol%/ 2 value%

Catalyst market

22 vol%/ 5 value%

Polishing

powders

8 vol% / 4 value%

0-7%

7-10%

~%

15-20% 10-16%

6-8%

X% expected annual growth

Recycling – likely to recover only some of the REE

04-02-2014

15

Rare earth magnet demand by key growth market

(2012-2018)

Rare earth magnet demand by key growth market

(2012-2018)

Scrap source Service life

Hard disk drives 5-10 years

Loud speakers 5-10 years

Mixed electronics 5-10 years

Motors and generators in hybrid & electric vehicles 15 years

Generators in wind turbines 20 years

MRI scanners 15 years

04-02-2014

16

Distribution of value in Kvanefjeld Project (Source: GME, 2013)

31 31

7%

4%

8%

18%

32%

0%

4%

1%

4%

13%

0% 1%

0%

1%

2%

3%

1%

Proportion of Value Contribution

U La Ce Pr

Nd Sm Eu Gd

Tb Dy Ho Er

Tm Yb Lu Y

Zn

Recycling – How is it impacting new mining projects?

Thank you!