NetworkNewsWire
Editorial Coverage: The United States was once a thriving
producer of rare earth elements ("REEs"), a group of 17 elements
deemed critical to clean energy and modern technologies. REEs are
used in a bevy of applications including cell phones, computers,
electric vehicles, defense equipment, renewable energy systems and
more. China has dominated global rare earth markets, driving out
competitors and controlling nearly all of the world’s processing
capacity. China has wielded this monopoly of the REE supply chain
to influence foreign policies, a weaponization that threatens the
economic and national security of the U.S. and other countries
around the world. Against this backdrop, the U.S. government is
committed to ending its dependence upon China for REEs, and
Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR)
(Profile) is among
the leaders with projects that intend to re-ignite REE production
in the U.S., which in Energy Fuels’ case, is expected as soon as
early 2021. In December 2020, the company advanced its entry into
the REE market by inking a three-year supply
agreement with the Chemours
Company (NYSE: CC) to acquire a minimum of 2,500 tons
per year of natural monazite sand ore, one of the highest-grade and
highest-value rare earth minerals in the world. Yet, the relatively
tiny quantity of natural monazite the company will be acquiring
from Chemours contains close to 10% of total U.S. demand for rare
earths. Chemours is the nation’s leading miner of monazite, a
reddish-brown phosphate mineral sand containing high concentrations
of REEs and uranium. Companies are looking to shift their supply
chains away from China, as EV maker Tesla
Inc. (NASDAQ: TSLA) recently did by becoming a lithium
miner in Nevada to supplement its other material feeds. Tech
juggernaut Apple
Inc. (NASDAQ: AAPL) is following a different path,
using recycled REEs in its latest products with plans for the
entire corporate footprint to have net zero climate impact by 2030.
Siemens
Gamesa Renewable Energy SA (OTC: GCTAF) has challenges
of its own as a major supplier of wind turbines, which requires
REEs in their construction.
- Rare earth elements are critical for clean energy, advanced
technologies and national security.
- The U.S. imported more than $2.6 trillion of finished products
containing REEs in 2018.
- The federal government is supporting domestic production of
REEs for national security and tech independence.
Click here to view
the custom infographic of the Energy Fuels
editorial.
Reviving the U.S. REE Market
The U.S. Department
of Energy estimates that in 2018 the global REE market was
valued at approximately $8 billion. The U.S. imports all of the
REEs it consumes, about 80% of which comes from
China. In 2018, the DOE said that the nation imported about
$160 million worth of rare earth compounds and metals, excluding
yttrium and scandium. However, the real economic cost of REEs is
deceptive insomuch that the nation imports nearly all of its REEs
in the form of finished goods rather than raw material. When put in
these terms, the U.S. Department of Energy estimates that the U.S.
imported $2.6 trillion of
finished goods containing REEs in 2018.
Insatiable consumer appetite for technology and growing
environmental consciousness suggest that demand for REEs will
continue to rise. The increase will be spearheaded by renewable
energy, namely wind and solar, and an automobile industry where
REEs are used in 93% of the permanent magnet traction motors in
electric vehicles ("EVs"). Magnets using REEs are integral to both
of these markets. For a bit of context, consider just the EV
market. Each fully electric vehicle requires 1–2 kilograms of
neomagnets. If there are 125 million EVs on the road by 2030 as the
International Energy Agency predicts,
REE use for EVs will increase from approximately 180 to 360 tons in
2017 to somewhere between 6,000 and 13,000 tons in the next
decade.
An Undisputed Leader in Uranium, Vanadium — and Now
REEs
Since the late 1990s, the nation has effectively ceased
processing any REEs, while China established a commanding global
position controlling 90%
of global production. Last year, the Pentagon began changing
that dynamic by committing to provide funds to REE mines and
processors through the Defense Production Act. Then, in a milestone
moment for the industry and country, in October 2020, Energy
Fuels Inc. (NYSE American: UUUU) (TSX: EFR) produced a
mixed REE concentrate from monazite sand at its wholly owned White
Mesa Mill in Utah.
While REE ore is currently mined and beneficiated in the U.S. by
MP Materials, Energy Fuels’ production of a mixed REE carbonate
will represent the first product of its kind produced in the
country in several years. The company also states that it intends
to evaluate producing separated REE oxides, and perhaps other
high-value downstream REE products, including metals, alloys and
possibly magnets.
Energy Fuels is already distinguished as the name in
U.S. uranium, with assets that have produced more than 33% of all
U.S. uranium over the past 15 years, as well as more production
capacity (11.5-plus million pounds of U3O8 annually) and in-ground
resources than any other miner in the country. Energy Fuels also
weighed in as the nation’s biggest producer of vanadium in 2019,
another critical element used in steel, advanced alloys and
grid-scale batteries.
Now the company intends to lead the re-emerging U.S. REE market.
REEs are complementary to the company’s uranium business, as
natural monazite ore contains high concentrations of both uranium
and REEs. UUUU’s announcement regarding its supply agreement with
Chemours included the company’s plan to process the monazite ore at
its White Mesa Mill starting in Q1 2021, recover the contained
uranium and produce a marketable ~71% TREO (dry basis) mixed REE
carbonate, ready for separation.
The announcement represents an important step toward
re-establishing a fully integrated U.S. REE supply chain. “We
estimate that the amount of REEs contained in the monazite sands to
be supplied by Chemours will equal close to 10% of total current
U.S. REE demand, as contained in end-use products,” the company
noted in the announcement.
Energy Fuels made relatively inexpensive process tweaks at the
White Mesa Mill to add monazite ore processing to its portfolio.
The company actually has considerable experience in handling REEs
and other materials, having produced uranium from feeds that also
contained similar metals, tantalum and niobium at the mill. The
company also recruited
leading REE experts to provide strategic advice in its
expansion into REEs. The decision to process natural monazite may
prove prescient, as the phosphate mineral is known as one of the
highest-value REE ores in the world, containing over 50% total rare
earth oxides ("TREO") as well as uranium.
First Mover, Lightning Pace
Once it announced its intention in April 2020 to build its
footprint in REEs, Energy Fuels moved quickly to complete a
pilot-scale monazite production run just seven months later. The
company was able to accomplish this milestone so fast because it
utilized existing resources, infrastructure and technologies,
providing the company with a competitive advantage. The company
believes it can enter commercial REE production more quickly and
inexpensively than others because of its existing licensed and
constructed assets and experience.
If successful in using existing infrastructure and technologies
at the White Mesa Mill to recover the uranium and the REEs from
monazite sands, Energy Fuels will avoid the years of permitting and
development that others may be faced with, and will enjoy
materially reduced capital costs.
Energy Fuels is finalizing negotiations to sell its mixed REE
concentrate to separation facilities. With commercial production
targeted for early 2021, the company anticipates being the first to
bring a critical portion of the monazite REE supply chain back to
the U.S. As a complement to its commercial REE initiatives, earlier
this year, Energy Fuels and a team from Penn State University were
awarded a contract by the U.S. Department of Energy to develop a
conceptual design for producing rare earth oxides from coal-based
resources. Many of the REE minerals associated with coal are
similar to natural monazite. This could further cement Energy
Fuels’ leadership position in the domestic REE industry.
A Sea Change Happening
Momentum is building towards bringing back REE production to
North America, domestically producing the raw materials required
for clean energy and advanced technologies, and reducing China’s
leverage. Energy Fuels is in an enviable position with its existing
infrastructure and experience that align with Washington’s support
of a domestic supply chain for critical metals, including REEs.
Backstopped by government initiatives, many companies are following
Washington’s lead supporting changes to supply sources for these
important, and irreplaceable materials.
The Chemours Company
(NYSE: CC) isn’t a name that most associate with
REEs, but Chemours is one of the biggest U.S. miners of natural
monazite ore through its subsidiary Southern Ionics Minerals.
Southern Ionics Minerals mines sand deposits in Southeast Georgia
to produce titanium and zirconium. In the process, REEs are a
byproduct of the sand separation process. Historically, the rare
earth ore has been exported to China for processing. “Chemours is
pleased to support the developing rare earth supply chain in the
United States,” said Chemours president Bryan Snell. “Our
partnership with Energy Fuels came from a deliberate process of
customer selection and developing sustainable solutions for our
critical minerals.”
Shares of Tesla
Inc. (NASDAQ: TSLA) continue to
soar as investors keep bidding up electric vehicle makers as the
wave of the future. Tesla CEO Elon Musk has a quest to bring an EV to
market at a $25,000 price point, which may mean securing a
reliable, low-cost supply chain that isn’t totally dependent upon
the trade whims of China. REEs are important building blocks of
EVs, used in electric motors, batteries and other components. In a
bid to fulfill its mission, Tesla is pushing into the mining
sector, securing 10,000 acres of lithium-rich clay deposits in
Nevada. Clay has proven to be a great challenge for lithium
extraction, but Musk says that he has plans for employing a new,
sustainable process for producing the silvery white metal for its
rechargeable batteries.
Apple Inc.
(NASDAQ: AAPL) may be eking its way
out of China, although evidence remains to be seen to what
extent. What is for sure is that the company is on a path towards
sustainability in its operations and products. About one-fourth of
the REEs in an iPhone goes for the “taptic engine,” a part that
serves as a button, even though it is on the flat part of the
screen. Other uses of REEs in Apple’s electronics include speakers
and actuators, for which Apple is using an anonymous third-party
recycler for its supply.
Siemens
Gamesa Renewable Energy SA (OTC: GCTAF) is a
recognized leader in the wind turbine industry with its rare earth
neodymium iron boron direct drive generators for both inland and
offshore windfarms. These generators, which are also growing in
popularity on new airplane technologies, are the product of choice
because of their reliability, power-to-weight ratio and
low-maintenance qualities. Even in a challenging COVID-19 economy,
Siemens Gamesa completed fiscal 2020 with record order
intake, providing evidence the movement towards wind energy is
gaining traction.
The United States was once home to a robust rare earth element
market, ultimately letting it slip away, and the country is now
paying the price. Lesson learned. Now in the early stages of a
groundswell to address the need for new supply channels of critical
minerals, the nation has recognized that there’s simply no
substitute for critical REEs and they must be produced domestically
again.
For more information about Energy Fuels Inc., please visit
Energy Fuels
Inc. (NYSE American: UUUU) (TSX: EFR).
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