Meeting the global shortage before 2014
Medallion has a technical team composed of the undisputed leaders and thinkers in the rare-earth-elements exploration industry. Using this team’s wide-ranging knowledge of all aspects of the global-rare-earths industry, the Company is evaluating and exploring untapped, and almost totally ignored, sources of rare-earths.
Q. Why have others ignored a major source of rare-earths that could help solve critical rare-earth-supply issues? Conventional Thinking.
Medallion is rethinking accepted rare-earth exploration and development strategies under the leadership of veteran geologist and rare-earth expert Dr. Bill Bird. With the accelerated need to relaunch the rare-earth exploration and development industry, most company strategies focused on the portfolio of hard-rock occurrences that were discovered in the Mid-20th Century, before China’s dominance. Most of these occurrences require complex metallurgy, huge investments for infrastructure and years to get to production.
Medallion recognized in 2009 that there was no company or REE-project, with the possible exception of Molycorp’s Mountain Pass Mine, that could solve the most critical REE-supply issues:
- a near-term shortage of rare-earth elements, and
- a lack of low-production-cost projects.
Dr. Tony Mariano, PhD Geology
Specialist in the geology and mineralogy of REEs
Medallion Advisory Board Member
Over the past two years, solving these issues has been the driving force of Medallion’s exploration and project-acquisition strategy. Rather than focusing on properties with complicated, expensive and untested metallurgy, Medallion is pursuing monazite processing partnerships and purchase-agreements. Monazite is a rare-earth phosphate mineral that is a major source of rare earths. It is a common by-product of heavy-mineral-sands deposits. Although it can be developed quickly and inexpensively, it is almost totally ignored by others.
Dr. Bird’s intimate knowledge of rare-earth mineralogy, metallurgy and geology has convinced him that monazite deposits are the only near-term solution to critical rare-earth-supply issues. Further, the expected inexpensive production costs could radically alter the present very high industry pricing structure.
Robert R. Roe, MS Geosciences
Specialist in heavy-mineral-sands deposits
Medallion Advisory Board Member
As Medallion works to acquire monazite projects and investigates other near-term production and low-cost rare-earth projects, it continues to explore its Canadian property, the Red Wine Rare-Earth Project in Labrador, which has the potential for large-tonnage and low-cost production. The Company is well-financed with approximately $3.3 million on hand.
The mineral monazite, a rare-earth-element phosphate, was the world’s original rare-earth source. In the 1950s, the bastnaesite deposit at Molycorp’s Mountain Pass mine was discovered in California and it became the leading rare-earth source. Today, monazite and bastnaesite account for about 95% (roughly evenly split between the two minerals) of the world’s rare-earth resources.
New rare-earth production from monazite can be developed quickly and inexpensively because monazite is a by-product of heavy-mineral-sands mines around the world. The huge heavy-mineral-sands industry provides the world’s main source of titanium and zirconium. Many of the mines maintain reserves in excess of one billion tonnes, which translates into 20 to 40 years of production. The by-product monazite from just one of these huge mines is capable of producing more rare-earths than Molycorp’s Mountain Pass mine.
Commercially Proven
The by-product monazite does not require exploration, proving of ore, mining or most milling processes. Monazite is a single mineral with proven metallurgical processes and has successfully produced commercial rare-earths in the past. No other rare-earth mineral, except bastnaesite, has such a record of commercial success. These huge cost-saving and time-saving attributes offer an ideal solution to critical rare-earth supply issues.
China’s control in the supply and production of rare earths (97% of global supply) is the dominant issue in understanding the rare-earth marketplace. Increasing global demand for rare earths combined with the 72% year-over-year government-ordered reduction (US-China Economic and Security Review Commission Staff Backgrounder, 2010*) in exports by China, has highlighted the basis for supply concerns among the major consuming regions of Japan, United States and the EU. Two major non-Chinese sources, USA’s Molycorp and Australian Lynas Corp., are recognized to be closest to significant new production. It is has been suggested that these firms have already sold much of their future production to Japan and Europe firms, potentially exacerbating future supply concerns. And, even with these new producers coming on board, the market still faces a shortage as China looks to keep control of exports to control their own resources.
The short-term supply problem exists for all rare earths – inclusive of the light rare earths lanthanum, cerium, neodymium and dysprosium; and, the more expensive heavy rare-earths. Prices are up and supplies are tight. It is likely that until more rare earths are produced in the medium-term and the market reaches equilibrium, the world will remain in short supply of rare earths. This has created a marketplace dynamic that may further drive up the price. In 2010, prices for rare-earth oxides rose by approximately 72% and continue to increase.
Virtually every electronic product we use, from cell phones to coffeemakers uses some form of rare-earth-element as an input. Often, it’s built into the electronics or the small motors that run these appliances. A motor made with a rare-earth magnet is much more powerful than that made with a plain iron magnet. Anything that requires a small, powerful motor must use REEs.
Neodymium, lanthanum, and dysprosium are all rare-earth metals necessary for a variety of green technologies like hybrid and electric vehicles, wind turbines, and batteries. These elements have other uses: in nuclear reactors, compact disks and modern medicine. Without neodymium, hybrids and electric vehicles wouldn’t be practical transportation and wind turbines wouldn’t exist.
Dysprosium has high magnetic properties and is used in the manufacture of information storage mediums like compact disks. It can be used to replace a portion of neodymium in magnets and motors, but this metal is so scarce that the world would quickly run out of it. Additionally this rare-earth metal is used in nuclear reactor control rods. Without them, the world of low and zero emissions vehicles would not be possible.
Another factor, with political implications, is the use of rare-earths in military applications. Although it’s impossible to estimate how much is used and for which specific purposes, it is known that military uses of REEs include everything from night vision goggles to smart bombs. Clearly, there are significant potential geopolitical concerns as a result of having the world’s supply of these critical metals in the hands of a single geopolitically risky country.
John Kaiser
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