EU looks to stockpile rare earths

Some rare earths like lanthanum and cerium are used in petroleum refineries8217; fluid cracking catalysts to process heavy oils,tars and oil shales into high octane fuel

I have been approached by the EU about stockpiling. There is a task force that is looking over strategic materials and they have contacted me. They were surprised that we do tantalum and niobium,which are also strategic materials,David O8217;Brock,chief executive at US Molycorp8217;s majority-owned Molycorp Silmet said.

O8217;Brock said that he suggested to the task force there is no point to stockpile the finished elements because every single customer uses a different quality.

Stockpile the concentrates. Once you have the concentrates stockpiled then you can sit back and relax and know that you have a processor here and start feeding that concentrate to the chemical processor,who will then make the products that the EU customers need. It takes a month,he said.

O8217;Brock said he recommended to the task force that the EU stockpile a year worth of his plant8217;s capacity or 3,000 tonnes of mixed rare earth carbonate.

The one thing the EU does not want to happen is someday the Chinese say,8217;that is it,no more lanthanum.8217; Shut down your war machines because you can8217;t get high octane fuel anymore for your plane and stuff,8217; O8217;Brock said.

Molycorp Silmet8217;s production is stable at 3,000 tonnes and Molycorp8217;s US operations are also 3,000 tonnes to give the units 10 per cent of the world market after China8217;s introduction of export quotas.

PRICES STABILISE

O8217;Brock said prices of rare earths have stabilised after the sharp increases over the last year.

He said lanthanum prices were 85 cents a kilogramme in 1999 and rose 35 a kilogramme in 2010,now the publicly available spot prices are somewhere around 130 or 140 a kilo.

I think that prices have already started to stabilise. And consumers have found their upper boundaries that they can pass on to their customers,unless the Chinese suddenly open the flood gates,I don8217;t see prices dropping and I don8217;t see a continued climb in the prices,he said.

The increase in revenue has allowed the Estonian firm to invest in upgrading the quality of its rare earth processing with the aim of trying to keep customers from moving their production lines to China to avoid Chinese export quotas.

We are increasing some capacities,but I am not at liberty to say which,but it is not volume wise,but quality wise 8212; boosting the quality of oxides from 99.95 per cent to 99.999 or 99.995,O8217;Brock said.

This requires a significant investment,but there is a market for them. The Chinese are squeezing the companies that use these high purity oxides,so we have a very limited time window before they are forced to move their lines to China,he said.

There was one large glass producer that moved their lines to China and it took 5,000 tonnes of cerium off the market.

The Silmet factory began processing rare earths and rare earth metals in the early 1970s,and processed and enriched uranium before that.

Rare earth metals produced by Molycorp Silmet include steel ingredient niobium and tantalum,which is used in aerospace and computer manufacturing.

The factory in Estonia gets cracked or raw earth carbonates from a mine near the Kola Peninsula close to Murmansk and now also from Molycorp8217;s Californian mine. Its supply of rare earth metals come from Brazil.

Molycorp ,the largest US producer of rare earth metals,bought a controlling stake in Estonia-based AS Silmet for about 89 million in April this year.

The move allowed the US company to double its rare earth oxide production capacity and feed carbonates from its US mine to its Estonian unit.