US to Challenge China’s “rare earth monopoly”

2012-11-09 02:50:19 GMT2012-11-09 10:50:19(Beijing Time)  SINA English

By Yu Runze, Sina English

The Pentagon and Toyota Motor Corp. are trying to crack China’s global lock on mining the most valuable rare earths used in unmanned military drones and electric-car motors.

The U.S. Department of Defense and Asia’s biggest carmaker are working with Canada’s Ucore Rare Metals Inc. (UCU) and Matamec Explorations Inc. (MAT), which are developing North American mines that would boost supplies of rare earths.

Foreign buyers are being driven to find alternative producers after China slashed exports in 2010 to conserve the unrenewable strategic material. China today supplies about 95 percent of global demand, presenting a risk for foreign makers of the next generation of wind turbines and environmentally friendly lighting technology.

Of more than 400 proposed rare-earth mines around the world, only five or six have enough heavy rare earths and are sufficiently advanced in their development to have a shot at making it into production.

Over the past two years, rare-earth prices and stocks have been volatile. The commodities have slumped since mid-2011, having surged as much 10-fold following Chinese export curbs.

Exploration companies outside of China begin to tout their potential for producing heavy rare earths such as dysprosium and terbium, all of which are harder to find and therefore pricier than so-called light rare earths.

Toyota Tsusho, Toyota’s trading unit, has a 49 percent stake in a joint venture with Matamec and is funding the feasibility study at the Kipawa project in Quebec. Toyota will harvest dysprosium from the mine, while other deposits on the same property also could be developed, Gauthier said.

Kipawa’s initial heavy rare-earth output will be about 2,000 metric tons and may rise with further exploration on the property.

And the Ucore’s Bokan Mountain deposit in Alaska may produce about 3,000 tons a year of rare earths by 2016, including enough dysprosium to meet domestic needs, CEO Jim McKenzie said.

China hasn’t identified having new rare-earth resources and could exhaust its own in five to 30 years, while non-Chinese rare-earth supply is projected to increase fivefold to 31 percent in 2016, a senior expert in US said.

Editor: Yu Runze
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