HONG KONG — One of the world’s last processors of rare earth metals outside of China has reduced its reliance on Russian ores and reduced its We buy mining rights in Greenland to keep prices stable.
Rare earth metals are essential to the production of a wide range of modern products such as electric vehicle motors, offshore wind turbines and smart bombs. Demand is skyrocketing as automakers switch production to electric vehicles.
Dozens of mostly small companies mine rare earth ores around the world and perform initial treatment to remove contaminants. But only his two commercial-scale factories outside of China do the arduous task of chemically separating semi-processed ore into materials that can be used in magnets for electric vehicle motors and other applications. is.
Based in Toronto, Neo Performance Materials purchases semi-processed ore from Russia, the United States and Australia and chemically processes it in factories in Estonia and China. Another company, Lynas Corporation, mines rare earth metal ores in Australia and performs chemical processing in Malaysia.
Neo said on Monday it will acquire Greenland’s rare earths mining rights from Hudson Resources, a small mining company based in Vancouver. The acquisition marks the first move into rare earth mining by his Neo of Magnequench division, a descendant of a former General Motors subsidiary that pioneered many modern magnetic applications for rare earth metals in the 1980s.
GM saw little potential in electric vehicles at the time and sold the business in 1996.
Neo CEO Konstantin Karajanopoulos said his company expects to start mining and processing ore in Greenland within two to three years, with full production in about five years. said. The semi-processed ore is shipped to Neo’s chemical separation plant in Estonia, a former Soviet republic on the Baltic Sea in Eastern Europe.
Neo’s goal is to free you from the need to buy ore at world prices. These prices fluctuate more than most commodities, jumping up to ten times during periods of geopolitical tension before crashing when tensions ease.
“I want the flexibility to either produce 100% myself or produce 50% and buy it on the market,” Karajanopoulos said in a telephone interview. Having a reliable in-house raw material source makes it possible to sell rare earths at fixed prices in long-term contracts with automakers, making electric vehicle deployment easier and financially predictable, he said. added.
Neo is also preparing to build a plant in Estonia this winter that will turn processed rare earths into magnets for electric vehicle motors. As European automakers rapidly shift production to electric vehicles, the European Union is providing financial support to build a rare earth mine-to-magnet supply chain within Europe.
Greenland is geographically part of North America, but is an autonomous region of Denmark, a member of the European Union.
Read more about electric vehicles
- Inflation control law: The law expands tax incentives to entice more US consumers to electric vehicles. However, the new rules will complicate the qualification process.
- Plug-in hybrid: After lagging behind all-electric vehicles, plug-in hybrid vehicle sales are booming in the United States. Electric cars and the high cost of gasoline gave them a chance.
- car crash: Tesla and other automakers take data from vehicles to operate their products. Experts say the information collected could also improve road safety.
- Frustrating hassle: The electric vehicle revolution is just around the corner, but its arrival has been delayed by a fundamental problem. The chargers that people use to refuel their electric cars are often broken.
The Estonian mill now buys three-fifths of its rare earth ore from Russia and the rest from Utah. Western countries have imposed a number of sanctions and other restrictions on companies and their exports from Russia, but not yet on rare earth metals.
Neo is not the first to attempt rare earth mining in Greenland. A consortium involving a Chinese state-owned company tried to open a mine at the southern tip of Greenland several years ago. There are rare earth deposits there that also contain significant uranium. The project was blocked by local opponents and regulators concerned about the risk of radioactive contamination of the environment.
Canadian geologist Don Hains, who advised Hudson Resources in Greenland, said the Sarfartoq deposit acquired by Neo contained 97 percent less radioactive material per tonne than deposits at the southern tip of Greenland.
Radiation levels in Sarfartoq are “lower than if you were sitting on a granite boulder by the ocean in Maine,” he said.
The Sarfartoq deposit on the west coast of Greenland is also considerably smaller than the deposit on the southern tip of Greenland. However, Karayannopoulos said the Sarfartoq deposit still has enough rare earth to meet Neo’s global processing needs for at least 30 years, with further drilling at the edge of the deposit confirming more rare earth ore. If so, it will probably be needed for a century.
Haines said ocean currents along Greenland’s west coast keep ice out during the winter, facilitating shipments of semi-processed ore to Estonia.
Rare earths, a group of 17 elements near the bottom of the periodic table, are not radioactive, but radioactive contaminants such as uranium and thorium occur naturally in rare earth deposits. Controversy over how to dispose of these contaminants has led to the closure of rare earth separation plants in Japan, Australia, France and the United States over the past 40 years.
This has made China the world’s leading mining and rare earth segregator. Russia is the fourth largest mining country for rare earth metals.
The United States and Australia are the second widest in the mining industry. Almost all American ore is mined in California and sent to China for processing, but some is produced in Florida and processed in Utah.President Biden and Governor Gavin Newsom of California Schedule announced in February Help restart chemical separation in California.
Rare earth metals have become a highly visible industry since China suspended exports to Japan for two months in late 2010 over territorial disputes.
Although rare earths are essential, they are mostly used in trace amounts and are therefore of little real value to the industry. Industry analysts estimate global sales of rare earth ores at approximately $2 billion, and fully processed magnetic powders and other rare earth materials at approximately $8 billion.
Neo said he would initially pay Hudson just $250,000 for the mining rights, and $3.25 million if the Greenland government approves the deal. He said he had discussed plans with the company and was optimistic that it wouldn’t be blocked like another China-backed project.
Neo has established a new subsidiary for the acquisition, and Hudson has also agreed to be entitled to 5% of the proceeds from the sale or initial public offering of the subsidiary within five years.
U.S. automakers, like European automakers, are just beginning to demand rare earth supplies for their magnets from mines near their assembly plants. GM said last October It has revealed that it will discuss with General Electric about the rare earth supply chain in the United States.
Karayannopoulos predicted that the US car market would evolve in the same direction as Europe.
“Once we prove this in Europe, we want to do the same in North America,” he said.