The Elements of Innovation Discovered
The Elements of Innovation Discovered
Key element of a mines-to-magnets strategy planned for Texas Metal Tech News Weekly Edition – April 8, 2020
Neodymium-iron-boron magnets are used in electric vehicle motors, wind turbine generators, smartphones, medical imaging devises, and a multitude of defense and aerospace applications. USA Rare Metals' purchase of equipment to produce these powerful magnets is a key piece to the company's U.S.-based mines-to-magnets strategy.
This non-descript mountain at the Round Top project in west Texas hosts at least 900 million metric tons of volcanic mineralization rich in rare earth elements, lithium and at least six other minerals consider critical to the United States.
USA Rare Earth LLC has acquired state-of-the-art neodymium-iron-boron permanent magnet manufacturing equipment, another key piece to the company's strategy to establish a complete rare earths mines-to-magnets supply chain in the United States.
New York-based USA Rare Earth has already made major headway toward this objective as the funding and development partner at Round Top, a rare earth and critical minerals project about 85 miles southeast of El Paso.
According to a preliminary economic assessment published in mid-2019, a mine at Round Top would produce 2,212 metric tons of rare earths per year, including healthy supplies of all six permanent magnet rare earth oxides. This includes more than 200 metric tons of dysprosium, 180 tons of neodymium, 67 tons of praseodymium, 65 tons of gadolinium, 65 tons of samarium and 23 tons of terbium once the mine reaches full production.
In addition to rare earths, the mine outlined in the PEA would produce about 10,000 metric tons of the lithium per year, which would help fill the expanding electric vehicle battery market.
According to current calculations, the Round Top deposit is large enough to supply REEs, lithium and other critical minerals at this rate for more than a century.
Texas Mineral Resources Corp., the exploration company that advanced Round Top to the point of considering the development of a critical minerals mine there, is USA Rare Earth's mines-to-magnets partner.
Between the Round Top deposit outlined by Texas Mineral Resources and the magnet manufacturing equipment acquired by USA Rare Earth lies a technology being developed by the joint venture partners to separate the group of 17 rare earths into oxides that can be used to make magnets and for other high-tech applications.
"Together with the critical materials contained in our Round Top project, coupled with our new processing plant and now the acquisition of the rare earth magnet manufacturing equipment, we have put into place the key building blocks for re-establishing a domestic critical minerals supply chain independent of China," said USA Rare Earth CEO Pini Althaus.
More information on a rare earth separation pilot plant being developed by USA Rare Earth and Texas Mineral Resources can by read at Texas REE separation plant makes progress in the current edition of Metal Tech News and Texas JV moves quickly on REE separation https://www.miningnewsnorth.com/story/2019/12/20/news/texas-jv-moves-quickly-on-ree-separation/6106.html in the Dec. 20, 2019 edition of North of 60 Mining News.
China's REE domination
China dominates the production and separation of rare earths, as well as the manufacturing of REE magnets and the high-tech and green energy devices that are driving the demand for them.
The motors in electric vehicles; generators in wind turbines; vibration motors and speakers in smartphones; MRI (magnetic resonance imaging) and other medical devices; and a multitude of defense and aerospace applications all need rare earth magnets.
The $14 billion-a-year rare earth magnet market is more than 60% controlled by China, which leverages its dominance across the entire mine-to-magnets supply chain to manufacture many of the high-tech products that require the high-performance these strong and durable magnets offer.
Read more about China's rise to REE dominance at A tale of two rare earth countries in the Jan. 15 edition of Metal Tech News.
The White House and Pentagon under the Trump Administration recognize the criticality of breaking China's near monopoly of the REE supply chain and have taken significant strides towards investing the capital needed to establish a U.S. rare earth supply chain – including mines, separation plants and magnet production facilities.
"Developing a full rare earth supply chain independent of China is essential for both the national economy and national security," said retired U.S. Army General Paul Kern.
With a deposit of rare earths in Texas and the advances being made on development of REE separation technologies at a pilot facility in Colorado, the purchase of more than $30 million of neodymium-iron-boron permanent magnet manufacturing equipment positions USA Rare Earth and Texas Mineral Resources to be a major player in establishing the REE supply chain the Trump Administration and the Pentagon are looking for.
"This plant provides the relevant industries in the U.S. the possibility of purchasing U.S. manufactured permanent magnets, without the reliance on China for this key component. The importance of this acquisition should not be underestimated," said Kern, who also sits on the USA Rare Earth board.
Could end in Texas
The magnet manufacturing equipment purchased by USA Rare Earth is the product of China previously flexing its REE dominance.
China severely limited rare earth exports during a trade dispute with Japan about a decade ago, which caused REE prices to skyrocket and companies and countries around the world to invest heavily into establish non-Chinese rare earth supply chains.
Late in 2011, Hitachi Metals America, Ltd. began developing a state-of-the-art sintered rare earth magnet manufacturing facility in North Carolina.
Due to a settlement of the quarrel and resumption of exports of low-cost rare earths and REE products from China, Hitachi closed the plant in 2015 after less than two years of operation.
USA Rare Earth has now acquired the equipment in this facility, which provides most of what is needed to re-establish rare earth magnet production in the U.S. and, with the addition of some readily-available components, can produce at least 2,000 metric tons of rare earth magnets per year.
"We did not want the United States to lose this key equipment, so when it became clear that was an imminent possibility, we moved quickly to ensure that this essential part of the critical minerals supply chain remains in the U.S.," said Althaus.
According to USA Rare Earth, the manufacturing capacity of the equipment it acquired is enough to supply roughly 17% of the current $852 million – 12,000 metric tons of REE magnets at an average price of approximately $71,000/mt – U.S. rare earth permanent magnet market and generate nearly $145 million in annual sales at 2019 prices.
This does not take into account the magnets already installed in the high-tech and other products that the U.S. imports from China, either directly or from other countries that get their rare earth products from China, or the rapidly growing demand be driven largely by the expanding EV markets.
"We have commenced discussions with the domestic U.S. electric vehicle and defense sectors to determine their needs and to work together to establish a domestic source of not only the raw materials from Round Top, but also the finished magnet product," the USA Rare Earth CEO added. "We expect to partner with one or more groups that have expertise in rare earth magnet manufacturing."
The company will warehouse its newly acquired rare earth magnet making equipment until it decides exactly where to build a new plant.
It is expected that the planned REE magnet facility and separation plant will be built close to Round Top, a west Texas hub that is serviced by existing roads, rail and power infrastructure and is near centers of technology and research universities in El Paso, Austin and San Antonio.
Together, these would put Texas at the center of America's REE mines-to-magnet supply chain and put a dent in China's domination of rare earth markets.
With more than 16 years of covering mining, Shane is renowned for his insights and and in-depth analysis of mining, mineral exploration and technology metals.
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