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RE: US MolyCorp Announce Rare Earth Rediscovery

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Molycorp Set to Announce a Rare Earth Rediscovery
By KEITH BRADSHER Published: October 3, 2011

Jacob Kepler/Bloomberg News – Molycorp is preparing to replace
an aging refinery near the site where it rediscovered rare earths.

An all-but-forgotten rocky outcropping in Southern California contains ore that could help break the country’s dependence on China for certain types of rare earth metals, according to the only American producer of rare earths.
The deposit contains so-called heavy rare earths, according to the company, Molycorp, which plans to announce its finding Tuesday at a conference in Washington sponsored by the Energy Department, the European Commission and Japan’s trade ministry.
Rare earths – both the “light” and “heavy” varieties – are vital to a range of green-energy technologies, including compact fluorescent light bulbs, hybrid-electric vehicles and wind-power turbines.
An Energy Department report released in December 2010 warned that disruptions in imports of crucial minerals, particularly heavy rare earths, could damage the American economy.
Despite their name, rare earths are fairly abundant in the earth’s crust. But heavy rare earths – which have more protons in their atomic nuclei than light rare earths – are far less common, and now sell for up to $2,600 a pound. Many industrial uses of light rare earths require them to be mixed with tiny quantities of heavy ones, like dysprosium or terbium, so that the light rare earths do not lose their magnetism at higher temperatures.
China, which currently mines most of the world’s rare earths of both types, has a chokehold on heavy rare earths, producing 99 percent of the global supply.
In its report last December, the Energy Department said it could take up to 15 years for the United States to break dependence on China, based on how long it might take to obtain federal permission to open new mines and processing plants. Winning such permission can be arduous because rare earth refineries produce thousands of tons a year of low-level radioactive waste.
But Molycorp’s chief executive, Mark Smith, said in a telephone interview Monday that the company might be able to begin producing heavy rare earths in a little over a year from now. That is because the ore deposit is on land near Mountain Pass, Calif., near the Nevada border, where the company has been mining since the early 1950s and has regulatory approval to continue mining and refining for decades.
Mr. Smith said that the ore is near the surface and would require very little strip mining.
Molycorp, moreover, has already started building an enormous new rare earth refinery at Mountain Pass to replace its aging refinery. The new plant, to be opened in stages between late next year and the end of 2014, is intended to process either light or heavy rare earths.
The company still needs to do extensive test drilling to determine the quality and quantity of the rare earth ore. But rather than wait for the test results, Mr. Smith acknowledged that Molycorp was announcing the deposit now partly to reassure manufacturers that adequate supplies of heavy rare earths would be available in the near future – in hopes of discouraging manufacturers from seeking alternative materials, as some have already begun to do.
Molycorp’s stock price has fallen by more than 60 percent since early May, to a close of $30.16 on Monday, as analysts have lowered their forecasts for manufacturers’ use of rare earths because of China’s virtual monopoly on supplies.
Geologists first noted the outcropping in 1950 while mapping the area around what is now the Mountain Pass mine. But back then, Unocal, the oil company that acquired the mine, was mainly interested in light rare earths used in either oil refining or color televisions.
So the company began mining a nearby lanthanum-rich deposit instead. Information on the heavy-ore outcropping eventually became buried in Unocal’s vast archive of maps and mineral analyses from rare earth deposits around the world, said John L. Burba, Molycorp’s executive vice president and chief technology officer.
Through the 1980s, Unocal employed more than 40 full-time geologists to scour the world for rare earth deposits and analyze them. After Chevron acquired Unocal in 2005, it spun off the rare earth division as Molycorp, which now has geologists sifting through the archives. Their work eventually prompted a new look at Mountain Pass.
Molycorp has watched as automakers like General Motors and Toyota and a variety of chemical companies have said in the past month that they were looking at ways to reduce sharply their rare earth usage. Lightweight electric motors for hybrid cars can be designed without rare earths, for example, although with some sacrifice of power and efficiency.
Dudley Kingsnorth, a consultant and retired top industry executive whose rare earth supply and demand models are widely used, last month reduced his forecast of demand in 2015 to 170,000 tons, from 190,000 to 195,000 tons.
That reduction, combined with a shift of factories using rare earths to China from the West and Japan, has contributed to a steep decline in prices for the 17 rare earth elements – even the heavy types. Prices have fallen by about one-fourth since July, after rising several fold in the first half of this year, according to Metal-Pages, an industry data firm in London.
Molycorp has ambitious plans to become the world’s largest single producer of light rare earths by the end of 2014, overtaking Lynas of Australia, which hopes to open a large refinery in Malaysia later this year.
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