The rest of the world was asleep as China grew to become a goliath in the rare earth industry. It took the rest of the world 20 years to wake up to the realization that the future of high technology could be in the hands of this one supplier. While there may be ample rare earth elements in the earth's crust, the challenge is in locating reserves worth mining and putting into place the infrastructure and processes necessary to mine and process them.

China produces 96 percent of the world's rare earth metals. Industrialized countries have realized that with a monopoly position, comes responsibility. China reduced its second-half rare earth metal export quota for the minerals by 72 percent in July 2010. It is now further restricting exports Repercussions and strategic implications are likely if rare earth elements supply were to be disrupted. .Actions by China have drawn criticism from U.S. lawmakers and officials in Japan and Germany.

After discovering a potential site and conducting a feasibility study, this type of mining operation requires permits, financing, building of infrastructure. Infrastructure includes roads, railways. The acquisition of mining technology, transportation for the materials, making mining machinery available, and processing of the raw materials is difficult.

All of these steps to rebuild the industry outside China could take up to ten years. In the meantime, China has a huge lead in educating engineers and scientists and in all aspects of the rare earth metal industry. This is a topic that has been neglected in the US and the western world until now. It has not been glamorous or interesting to professors, universities, and most of all students. It is set to become more significant in many countries.

One potential threat is that, while China's reduction in export quotas is currently causing prices to go up, if China were to turn that around and bring prices back down, this could potentially put these and other companies out of business even before they become fully operational.

Hybrid vehicles are one of many technologies that use rare earth elements . Global demand for hybrid vehicles is projected to be 14 to 16 million vehicles per year by 2017 so the impact to the rare earth market could be staggering. Additional Rare Earth supply sources must come on line to support this growing industry.

China has major plans to build a national rare earth resources strategic reserves base. The tentative plan is to store up the raw materials that were not used up from the annual excavation at Baosteel. China uses that to stabilize prices. Efforts are underway in Northern China to realize this goal.

The fundamental aspect of rare earth metals implementation relates to efficient extraction of the minerals forms deposits in the earth. Markets at $1.4 billion in 2010 are anticipated to reach $4.1 billion by 2017. Market growth comes as energy efficient units are built using rare earth elements.

Companies Profiled
 
Baotau Steel Rare Earth High Tech
Baotou League, East Mine, Bayan Obo
Darhan Muminggan United Banner Main pit, Bayan Obo (Bayun-Obo)
 East Mine, Bayan Obo
Inner Mongolia Baotou Steel Rare Earth High-Tech Co.
 
Market Participants

Alkane
Arafura
Molycorp
Lynas

TABLE OF CONTENTS

Rare Earth Elements Executive Summary 

Rare Earth Elements Executive Summary  ES-1

China Becomes A Goliath In The Rare Earth Industry  ES-1

Actions by China  ES-1

Rare Earth Elements Market Shares  ES-2

China Major Plans To Build A National Rare Earth

Resources Strategic Reserves Base  ES-4

Rare Earth Elements Market Forecasts  ES-4

Chinese Rare Earth Elements Companies Reduced  ES-9

Rare Earth Elements Market Description and Market Dynamics 

1.    Rare Earth Elements Market Description and

Market Dynamics  1-1

1.1   Term Rare Earth Is A Misnomer.  They Are Not Rare At All 1-1

1.1.1    Discovery Of Rare Earth Elements  1-2

1.1.2    Mountain Pass Molybdenum Corporation of America  1-2

1.2   Rare Earth Elements  1-3

1.2.1    Definition of Rare Earth Elements  1-4

1.2.2    NdFeB Has Superior Permanent Magnetic Properties  1-4

1.2.3    Rare Earth Elements  1-5

1.3   Rare Earth Minerals Key In Growth Of

Renewable Energy Technologies  1-8

1.4   Producing Rare Earth Oxides: No Small Task  1-9

1.4.1    China’s Clampdown On Exports  1-10

1.4.2    Dramatic Shift Is Beginning To Take Place  1-10

1.4.3    U.S. Rare Earth Deposits  1-10

1.4.4    Educational Awareness Of Rare Earth Elements  1-11

1.5   Rare Earth Minerals Industry  1-12

1.5.1    Global Consumption Of Rare Earth Elements  1-14

1.5.2    Chinese Consumption Of Rare Earth Elements  1-14

1.5.3    Demand for Rare Earth Products  1-17

Rare Earth Elements Market Shares and Market Forecasts 

2. Rare Earth Elements Market Shares and Market Forecasts  2-1

2.1   China Becomes A Goliath In The Rare Earth Industry  2-1

2.1.1    Actions by China  2-1

2.1.2    Finding and Mining More Rare earth elements  2-2

2.1.3    Mountain Pass Mine in California Competing with China  2-2

2.1.4    Rare Earth Curbs May Prove a Windfall for

Molycorp, Lynas as Prices Surge  2-4

2.2   Rare Earth Elements Market Shares  2-5

2.2.1    China Major Plans To Build A National Rare Earth

Resources Strategic Reserves Base  2-13

2.2.2    Chinese Rare Earth Elements Companies Reduced  2-14

2.2.3    Molycorp Mountain Pass California  2-14

2.2.4    Alkane Rare Earth Market 2-15

2.2.5    Rare Earth Mineral Mining Market Shares  2-15

2.2.6    Rare Earth Mineral Market Production Shares  2-16

2.2.7    China  2-16

2.2.8    Glencore International AG   2-16

2.2.9    Lynas’ Mt. Weld  2-16

2.2.10  Molycorp’s Mountain Pass  2-17

2.2.11  Rare Earth Curbs Spur Opportunities for

Molycorp, Lynas  2-17

2.3   Rare Earth Elements Market Forecasts  2-18

2.3.1    Rare Earth Mineral Molycom Market Forecasts  2-23

2.4   Global Rare Earth Market Profile  2-28

2.4.1    Rare Earth Elements Applications, Including Magnets  2-32

2.5   Rare Earth Mineral Applications  2-34

2.5.1    Military  2-35

2.5.2    Communications  2-38

2.5.3    Hybrid Electric Vehicles  2-38

2.5.4    Clean Drinking Water 2-39

2.5.5    Aircraft 2-39

2.5.6    Incandescent bulbs  2-40

2.5.7    Rare-Earth  2-40

2.5.8    Displays  2-41

2.5.9    Rare earths Radar Systems  2-42

2.5.10  Gamesa Corp. Tecnologica SA Windmills  2-45

2.6   Rare Earth Elements Prices  2-47

2.6.1    Factors That Could Influence Demand For

Rare Earth Products and Push Prices Upward: 2-48

2.6.2    Molycorp  2-50

2.6.3    Price of Rare Earth Products  2-52

2.7   Chinese Rare Earth Mineral Quotas  2-54

2.7.1    Costs of Rare Earth Mineral Water Pollution And

Discharge Standards  2-56

2.7.2    Chinese Pay Toxic Price for a Green World  2-58

2.7.3    Japan And South Korea Have Built Up Stockpiles Of

Rare Earth Minerals  2-58

2.7.4    Japan Gets 20 Percent Of Its Rare Earth From China’s

Black Market 2-58

2.7.5    Costs of Rare Earth Mineral Water Pollution And

Discharge Standards  2-60

2.8   Rare Earth Elements  Regional Analysis  2-61

2.8.1    Chinese Rare Earth Mineral Quotas  2-62

2.8.2    China Export Quota For The Second Half Of 2010,

Which Reduced Rare Earth Exports by 72%   2-64

2.8.3    Chinese Pay Toxic Price for a Green World  2-66

2.8.4    Japan And South Korea Have Built Up

Stockpiles Of Rare Earth Minerals  2-66

2.8.5    Japan Gets 20 Percent Of Its Rare Earth From

China’s Black Market 2-66

2.8.6    German Government Adopted A Strategy To

Secure Supply Of Raw Materials Including Rare Earths  2-67

2.8.7    Japan  2-67

2.8.8    Kyrgyzstan  2-67

Rare Earth Elements Product Description  

3. Rare Earth Elements Product Description   3-1

3.1   China’s Rare Earth Elements Industry: 3-1

3.1.1    Rare Earth Elements Industry Severe Environmental

Damage in China  3-6

3.1.2    China Pollutant Discharge Standards  3-7

3.1.3    Rare Earth Deposits In China  3-9

3.1.4    Two Key State Rare Earth Elements Laboratories

In China    3-9

3.1.5    Two Other Laboratories In China Dedicated To

Rare Earth Elements  3-11

3.1.6    China Pursues Rare Earth Resources  3-11

3.1.7    Issues Facing China’s Rare Earth Resources  3-12

3.1.8    China Continually Worries About Depleting

Rare Earth Reserves  3-13

3.1.9    China Dominates Magnet Industry  3-13

3.1.10  China Major Plans To Build A National Rare

Earth Resources Strategic Reserves Base  3-14

3.1.11   Chinese Rare Earth Elements Companies Reduced  3-15

3.1.12  Bayan Obo Geology And Tectonic Setting  3-19

3.1.13  Carbonate Rocks of Bayan Obo  3-21

3.1.14  Mineralogy of the Bayan Obo Orebodies  3-21

3.1.15  Bayan Obo REE   3-23

3.1.16  Bayan Obo Deposits in China  3-28

3.1.17  Mianning Deposits in China  3-29

3.2   US Rare Earth Elements Industry  3-29

3.2.1    One Potential Threat to US REE From China  3-30

3.3   Molycorp Minerals  3-30

3.3.1    Molycorp Purchased Mountain Pass in 1951  3-32

3.3.2    Molycorp Mothballed Mine  3-33

3.3.3    Molycorp Minerals Expects To Produce 3,000

Metric Tons Initially  3-33

3.3.4    Molycorp Deposits Of Rare-Earth Elementss  3-34

3.3.5    Molycorp Hybrid Electric Vehicles  3-37

3.3.6    Molycom Water Purification  3-39

3.3.7    Molycorp Minerals Arsenic Sequestration Industrial

Process Waste Streams  3-41

3.3.8    Molycomp Rare Earth Elements Enable A

Wide Variety Of Defense Technologies  3-41

3.4   Lynas Corporation, Australian Mining Company  3-43

3.4.1    Lynas Corp, Mount Weld  3-44

3.4.2    Lynas Australian Block  3-44

3.5   Avalon / Thor Lake  3-45

3.6   Great Western / Hoidas Lake  3-45

3.7   Great Western, Rareco Steenkampskraal 3-45

3.8   Mt. Weld Carbonatite  3-45

3.9   India’s Heavy-Mineral Sands Deposits In The States of

Kerala, Orrisa, and Tamil Nadu  3-46

3.10     Re-cycling Rare Earth Minerals  3-46

3.11     Arafura Resources Ltd. 3-46

3.12     Alkane Resources Ltd. 3-47

3.13     Glencore International AG   3-47

3.14     German Government Adopted A Strategy To

Secure Supply Of Raw Materials Including Rare Earths  3-47

Rare Earth Elements Technology 

4. Rare Earth Metal Technology  4-1

4.1   Rare Earth Ore Technology Description  4-1

4.1.1    Rare Earth Ores  4-1

4.1.2    MolyCorp Rare Earth Minerals  4-2

4.2   Rare Earth Elements Uses  4-9

4.2.1    La Lanthanum 57  4-9

4.2.2    Ce Cerium 58  4-9

4.2.3    Pr Praseodymium 59  4-10

4.2.4    Nd Neodymium 60  4-10

4.2.5    Pm Promethium 61  4-11

4.2.6    Sm Samarium 62  4-11

4.2.7    Eu Europium 63  4-12

4.2.8    Gd Gadolinium 64  4-13

4.2.9    Er Terbium 65  4-13

4.2.10  Dy Dysprosium 66  4-13

4.2.11  Ho Holmium 67  4-14

4.2.12  Er Erbium 68  4-14

4.2.13  Tm Thulium 69  4-14

4.2.14  Yb Ytterbium 70  4-15

4.2.15  Lu Lutetium 71  4-15

4.2.16  Y Yttrium 39  4-15

4.2.17  Sc Scandium 21  4-16

4.2.18  Loparite  4-16

4.2.19  Xenotime  4-17

4.2.20  REE   4-17

4.2.21  REE Supply  4-17

4.3   Rare Earth Elements Sources  4-18

4.3.1    La Lanthanum 57  4-18

4.3.2    Ce Cerium 58  4-19

4.3.3    Pr Praseodymium 59  4-19

4.3.4    Nd Neodymium 60  4-19

4.3.5    Pm Promethium 61  4-19

4.3.6    Sm Samarium 62  4-19

4.3.7    Eu Europium 63  4-20

4.3.8    Gd Gadolinium 64  4-20

4.3.9    Er Terbium 65  4-20

4.3.10  Dy Dysprosium 66  4-20

4.3.11  Ho Holmium 67  4-21

4.3.12  Er Erbium 68  4-21

4.3.13  Tm Thulium 69  4-21

4.3.14  Yb Ytterbium 70  4-21

4.3.15  Lu Lutetium 71  4-22

4.3.16  Y Yttrium 39  4-22

4.3.17  Sc Scandium 21  4-22

4.3.18  Dictionary  4-23

4.4   Disposal Of Rare Earth Metal Tailings  4-28

4.5   Rare Earth Minerals:  US Environmental Regulations  4-31

4.5.1    Mine Health and Safety Laws  4-36

4.5.2    Molycorp Mountain Pass Facility  4-37

Rare Earth Elements Company Profiles 

5. Rare Earth Elements Company Profiles  5-1

5.1   Alkane  5-1

5.1.1    Alkane Dubbo Project – New Revenue Numbers  5-2

5.1.2    Alkane Cudal – New Gold And Base Elements Discovery  5-3

5.1.3    Alkane Light Rare Earth Concentrate And A Heavy Rare Earth Concentrate  5-3

5.2   Arafura  5-5

5.3   Baotou League, East Mine, Bayan Obo  5-5

5.3.1    Bayan Obo Aeschynite-(Nd) : (Nd,Ce,Ca)(Ti,Nb)2(O,OH)6  5-5

5.4   Darhan Muminggan United Banner Main pit,

Bayan Obo (Bayun-Obo) 5-6

5.5   East Mine, Bayan Obo  5-8

5.6   Inner Mongolia Baotou Steel Rare Earth High-Tech Co  5-10

5.7   Lynas Corporation  5-11

5.8   Molycorp  5-13

5.8.1    Molycorp Mine Process and Development Plans  5-14

5.8.2    Molycorp Non-Binding Letter Of Intent With Hitachi 5-16

5.8.3    Molycorp Products and Markets  5-18

5.8.4    Molycorp Modernization and Expansion of

Mountain Pass Facility  5-19

5.8.5    Molycorp Acquired the Mountain Pass Facility on

September 30, 2008  5-19

5.8.6    Molycorp Revenues  5-20

5.8.7    Molycorp Revenues  5-23

5.8.8    Molycorp Mountain Pass Location  5-26

5.8.9    Rare Earth Reserves and Non-Reserve Deposits  5-28

5.8.10  Molycorp Customers  5-29

5.8.11  Molycorp Ore Processing  5-32

5.8.12  Molycorp Mine-to-Oxides  5-33

5.8.13  Molycorp Processing Technologies  5-34

5.8.14  Molycorp Oxides-To-Elementss/Alloys  5-36

5.8.15  Molycorp Alloy and Magnet Production Joint Ventures  5-37

5.8.16  Molycorp Decision to Double Original Planned

Production Capacity  5-38

5.8.17  Molycorp Sumitomo Investment 5-39

LIST OF TABLES AND FIGURES


Rare Earth Elements Executive Summary 

Figure ES-1  ES2

Rare Earth Elements Market Driving Forces 

Figure ES-2  ES-3

Rare Earth Elements Market Shares, Dollars, 2010 

Figure ES-3  ES-6

Rare Earth Elements Market Forecasts Dollars,

Worldwide, 2011-2017 

Figure ES-4  ES-8

Samples of Rare Earth Compounds Displayed In

The Showroom At Inner Mongolia Baotou Steel

Rare-Earth Hi-Tech Co. in Baotou, Inner Mongolia,

Figure ES-5  ES-10

Close Up showing Bayan Obo, the world’s Largest

Rare Earth Mine, located north of Baotou, Inner Mongolia, China 

Rare Earth Elements Market Description and Market Dynamics 

Figure 1-1  1-7

Rare Earth Elements Table 

Table 1-2  1-13

Rare Earth Elements Existing And Emerging Applications 

Table 1-3  1-16

April 2010 U.S. GAO Briefing Conclusions 

Rare Earth Elements Market Shares and Market Forecasts 

Table 2-1  2-3

Steps to Starting New Rare Earth Elements Mine 

Table 2-2  2-4

Rare Earth Elements Mine Time Consuming Step By Step Processes 

Figure 2-3  2-5

Rare Earth Elements Market Driving Forces 

Figure 2-4  2-6

Rare Earth Elements Market Shares, Dollars, 2010 

Table 2-5  2-7

Rare Earth Market Shares, Dollars, Worldwide,  2010 

Table 2-6  2-8

Rare Earth Market Shares, Production of Ore, Worldwide,  2010 

Table 2-7  2-9

Light Rare Earth Market Shares, Production of Ore,

Worldwide,  2010 

Table 2-8  2-10

Heavy Rare Earth Market Shares, Production of Ore,

Worldwide,  2010 

Table 2-9  2-11

Rare Earth Element Markets, Segments of Ore Use 

Table 2-10  2-12

Rare Earth Elements Regional Market Segments, Dollars, 2010 

Table 2-11  2-13

Rare Earth Market Shares, Production of Ore,

Worldwide,  2008, 2009, 2010 

Figure 2-12  2-20

Rare Earth Elements Market Forecasts Dollars,

Worldwide, 2011-2017 

Figure 2-13  2-21

Rare Earth Elements Market Forecasts Tons of

Ore Shipped, Worldwide, 2011-2017 

Table 2-14  2-22

Rare Earth Elements Reserves 

Table 2-15  2-29

REEs Critical Materials To Existing Applications

Because Of Unique Properties 

Table 2-16  2-30

Rare Earth Elements Market Segment Forecasts

Tons of Ore, Worldwide, 2011-2017 

Table 2-17  2-31

Rare Earth Elements Market Segment Forecasts Percent,

Worldwide, 2011-2017 

Table 2-18  2-35

Rare Earth Mineral Applications 

Table 2-19  2-48

Factors That Could Influence Demand For Rare Earth

Products And Push Prices Upward 

Table 2-20  2-50

Rare Earth Project Variables 

Table 2-21  2-52

Rare Earth Products Prices 

Table 2-22  2-53

Rare Earth Products Prices 

Table 2-23  2-61

Rare Earth Elements Regional Market Segments,

Dollars, 2010 

Table 2-24  2-62

Rare Earth Market Shares, Production of Ore,

Worldwide, 2008, 2009, 2010 

Rare Earth Elements Product Description  

Figure 3-1  3-5

Samples of Rare Earth Compounds Displayed In The

 Showroom At Inner Mongolia Baotou Steel Rare-Earth Hi-

Tech Co. in Baotou, Inner Mongolia,

Figure 3-2  3-16

Close Up showing Bayan Obo, The World’s

Largest Rare Earth Mine, Located North of Baotou,

Inner Mongolia, China 

Figure 3-3  3-18

Bayan Obo Mining Area 

Figure 3-4  3-20

Geologic Map of Bayan Obo 

Figure 3-5  3-22

Bayan Obo, the World’s Largest Rare Earth Mine, Located

North of Baotou, Inner Mongolia, China 

Figure 3-6  3-26

Bayan Obo REE Ore Outcropping 

Figure 3-7  3-27

Bayan Obo Outcrop of Bodies Of Massive Magnetite (MT)

And Hematite (HE)

Figure 3-8  3-35

Molycorp Rare-Earth Elementss Used for Wind Mills 

Figure 3-9  3-36

Molycorp Deposits Of Rare-Earth Elements

Used to Make Wind Mills 

Figure 3-10  3-37

Molycorp Hybrid Electric Vehicles Use of Rare Earth Minerals 

Figure 3-11  3-38

Battery Pack for Toyota Prius 

Figure 3-12  3-40

Molycorp Minerals Portable Clean Drinking Water Device 

Table 3-13  3-42

Molycomp Rare Earths Critical To Many Defense

Related Applications 

Figure 3-14  3-43

Rare Earth Mineral Night Vision and Optics Applications 

Rare Earth Elements Technology 

Figure 4-1  4-1

Rare Earth Ores 

Figure 4-2  4-2

MolyCorp Rare Earth Minerals 

Figure 4-3  4-3

Bastnasite Rare Earth Mineral Weight % of Total

Figure 4-4  4-4

Monazite Rare Earth Mineral Weight % of Total

Figure 4-5  4-5

Laparite Weight % of Total

Figure 4-6  4-6

Xenotime Rare Earth Metals Weight % of Total

Figure 4-7  4-7

Lateritic Rare Earth Ore Weight % of Total

Figure 4-8  4-8

Lateritic Rare Earth Mineral Weight % of Total

Table 4-9  4-33

Molycorp Sample Environmental Permits 

Rare Earth Elements Company Profiles 

Figure 5-1  5-5

Rare Earth Elements Mine Samples from

East Mine Bayan Obo China 

Figure 5-2  5-7

Dolomite, Bastnasite, Parisite, and Magnetite 

Figure 5-3  5-9

Rare Earth Elements Crystals 

Figure 5-4  5-9

East Mine, Bayan Obo 

Table 5-5  5-13

Molycorp Rare Earth Elements Development Goals 

Table 5-6  5-15

Molycorp Initial Production of Rare Earth Elements 

Figure 5-7  5-26

Molycorp Mountain Pass Location 

Figure 5-8  5-27

Molycorp Open Pit Mine 

Figure 5-9  5-38

Molycorp Rare Earth “Mine-To-Magnets”

Production Supply Chain