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Canada puts harder pressure on exploiting rare earth metals

View of a rare earth open pit mine.

The North American country wants to increase the production of these key chemical elements for the development of the new economy.

The so-called rare earth elements[1], that list of 17 chemical elements from the periodic table, are a valuable resource for modern technology thanks to their ionic and conductive properties. Its applications can be found in medical, military and telecommunications equipment. They are also playing a fundamental role in the green transition thanks to their use in the manufacture of electric cars and wind turbines. It is therefore not surprising that they are becoming a very important piece on the geopolitical chessboard. And Canada, one of the mining powers, is looking for a way to get a slice.

Major Western economies are making various moves to confront China's might in the rare earths sector and Russia's emerging trajectory. The invasion of Ukraine has also been a blow to the board given its impact on supply chains. China ranks first in the extraction of these chemical elements (about 127,000 tons in 2020; more than 60% of the world's supply) while Russia is located in fourth place. The European Commission is promoting the approval of a law and an investment fund to increase its autonomy in rare earths and other strategic resources. For its part, Canada signed in December 2019, along with Australia and other countries, an initiative led by the United States to reduce this dependency.

According to a report[2] by MarketsandMarkets, the global rare earth market will reach an annual value of US$9.6 billion by 2026; the consultant calculates that it reached 5,300 million in 2021. The United States Geological Survey[3] published a list of approximate prices of these elements that were paid last year. For example, the kilogram of terbium stood at 1,300 dollars, while that of dysprosium and europium reached 400 and 310 dollars, respectively.

Last May, the first Canadian rare earth mine began delivering its concentrates. This is Nechalacho[4], located in the Northwest Territories. This mine is the second operating in North America (the other is Mountain Pass, in California). Cheetah Resources[5], the company that owns it, expects to produce 25,000 tons a year from 2025. Its directors indicated that this is a big step for Canada and its allies to gain independence from the Chinese supply chain.

Natural Resources Canada[6] has noted that the country has some of the largest known reserves of rare earths in the world. The Government of Justin Trudeau has budgeted 3,800 million dollars to support the development and application of the Critical Minerals Strategy[7], which includes rare earths. The Nechalacho mine is just a first move, as there are currently 21 exploration projects. Some of them are Moose Lake (Saskatchewan)[8], Kipawa (Quebec)[9], and Red Wine (Newfoundland and Labrador)[10].

The plans go beyond Canadian borders. Neo Performance Materials[11], a company based in Toronto, announced in August the acquisition of rare earth mining rights in the Sarfaroq deposit (Greenland)[12]; rights acquired from Hudson Resources, a British Columbia company. Said negotiation contemplates the payment of more than three million dollars, as long as the Greenlandic Government approves the transfer of the license. Other Canadian projects abroad are located in Malawi (run by Mkango Resources[13]) and Alaska (run by Ucore Rare Metals)[14].

At the end of August, the Canadian Executive signed a memorandum of understanding with Volkswagen and Mercedes Benz to facilitate the supply —by Canadian companies— of materials for their electric vehicle batteries. The document is focused on cobalt, graphite, nickel and lithium, although it could open the door to other elements. "There is a more pressing need than ever for critical minerals and rare earths, and if we want to demonstrate a cleaner and greener world, we can no longer accept that our minerals and inputs for our way of life come from authoritarian countries," said Justin Trudeau after the signing of the agreement.

Canada and its allies seek to expand the extraction of these resources. However, its separation and refinement are carried out in other parts of the planet. Jean-François Boulanger, professor of mining engineering at the University of Quebec[15], says that, for example, Neo plans to do it in Estonia if the project in Greenland progresses. And he adds that it is difficult to compete with the Chinese domain (it accounts for about 85% of the world's processing capacity). Beijing is frequently accused of dumping for its rare earth strategy. "We can open more mines, but breaking Chinese domination requires strong investment." It is a sector, according to this expert, in which investors still do not have much clarity about the future evolution of prices.

Environmental impact

The extraction, separation and refining of rare earths are of environmental concern. "The so-called 'clean' energies need to resort to rare minerals, whose exploitation is anything but clean," says journalist Guillaume Pitron in his book The War of Rare Metals[16]. Huge volumes of rock removed, use of large amounts of acids, hazardous waste (some radioactive) and risks of contamination in air, land and water are denounced by different organizations, as well as the carbon footprint generated by its transport to processing sites. .

Rodrigue Turgeon, co-director of the MiningWatch Canada[17] program, points out about caring for the environment and rare earths: "We are in a race against time, but this should not be an excuse to do anything." Turgeon stresses that a full environmental assessment and consultation work with the communities where these resources are to be extracted or processed is required; also that priority should be given to its recycling and its use in technologies to replace hydrocarbons.

“Mining is a globalised industry, as are the negative impacts on the environment. What happens in distant areas also affects us”, says Turgeon, although he specifies: “Canada is not in a position to give lessons to other countries. It has been very accommodating to its mining companies. Both in rare earths and in other resources, the Canadian Government has responsibility for what its companies do, inside and outside the country”.

Source

Jaime Porras Ferreiro, Canadá pisa con fuerza en las tierras raras, in El País, 5-10-2022; https://elpais.com/economia/negocios/2022-10-05/canada-pisa-con-fuerza-en-las-tierras-raras.html

View of a rare earth open pit mine.

[1] The rare-earth elements (REE), also called the rare-earth metals or (in context) rare-earth oxides or the lanthanides though yttrium and scandium, are a set of 17 nearly-indistinguishable lustrous silvery-white soft heavy metals. Compounds containing rare earths have diverse applications in electrical and electronic components, lasers, glass, magnetic materials, and industrial processes. Scandium and yttrium are considered rare-earth elements because they tend to occur in the same ore deposits as the lanthanides and exhibit similar chemical properties, but have different electronic and magnetic properties.

[2] The rare-earth metals market is projected to grow from USD 5.3 billion in 2021 to USD 9.6 billion by 2026, at a CAGR of 12.3% during the forecast period. The increasing use of rare-earth elements that are used in the permanent magnet application are likely to drive the rare-earth metals market. APAC is the fastest-growing market for rare-earth metals due to increase in production and consumption in China. Significant usage of permanent magnets offer a huge impetus to these advanced materials, are expected to drive the rare-earth metals market in the region. https://www.marketsandmarkets.com/Market-Reports/rare-earth-metals-market-121495310.html

[3] The principal economic sources of rare earths are the minerals bastnasite, monazite, and loparite and the lateritic ion-adsorption clays. The rare earths are a relatively abundant group of 17 elements composed of scandium, yttrium, and the lanthanides. The elements range in crustal abundance from cerium, the 25th most abundant element of the 78 common elements in the Earth's crust at 60 parts per million, to thulium and lutetium, the least abundant rare-earth elements at about 0.5 part per million. The elemental forms of rare earths are iron gray to silvery lustrous metals that are typically soft, malleable, and ductile and usually reactive, especially at elevated temperatures or when finely divided. The rare earths' unique properties are used in a wide variety of applications. https://www.usgs.gov/centers/national-minerals-information-center/rare-earths-statistics-and-information#:~:text=The%20principal%20economic%20sources%20of,%2C%20yttrium%2C%20and%20the%20lanthanides.

[4] Nechalacho hosts a world-class resource of 94.7Mt at 1.46% REO (measured, indicated and inferred). Nechalacho’s North T Zone hosts a high-grade resource of 101,000 tonnes at 9.01% LREO (2.2% NdPr), making it one of the highest grade rare earths deposits in the world. https://vitalmetals.com.au/portfolio/nechalacho-project/

[5] Cheetah Resources, a Vital Metals (ASX: VML) company, is Canada’s first rare earths producer following development of its world-class rare earth Nechalacho project in Northwest Territories (NWT), commencing production in June 2021. Cheetah Resources aims to become the lowest cost producer of mixed rare earth oxide outside of China by developing one of the highest grade rare earth deposits in the world and the only rare earth project capable of beneficiation solely by ore sorting. Cheetah’s other projects include the high-grade Wigu Hill rare earth resource in Tanzania. https://cheetahresources.com/

[6] Natural Resources represents Canada at the international level to meet the country's global commitments related to the sustainable development of natural resources. It develops policies and programs that enhance the contribution of the natural resources sector to the economy. https://www.nrcan.gc.ca/home/about-us/10838

[7] Canada’s critical minerals strategy: Discussion paper. The public consultation period for the discussion paper closed September 15, 2022. The government is reviewing the feedback the Canadian public provided to help them finalize Canada's Critical Minerals Strategy, which will be published at the end of 2022. https://www.canada.ca/en/campaign/critical-minerals-in-canada/canada-critical-minerals-strategy-discussion-paper.html

[8] Moose Lake is a small community in Manitoba, Canada. It is located on the eastern edge of the Saskatchewan River Delta on the western shore of South Moose Lake about 74 km southeast of The Pas. Adjacent to the non-treaty community is a First Nations reserve, home to the Mosakahiken Cree Nation.

[9] Kipawa is a village and municipality in western Quebec, Canada, in the Témiscamingue Regional County Municipality. It is located at the south end of Lake Kipawa, adjacent to the Kebaowek Reserve. The land including and surrounding Lake Kipawa and Kipawa Village has been inhabited for centuries. The original inhabitants are the Algonquin people. The first Europeans to come into Kipawa were fur traders and missionaries. Shortly after, The Hudson Bay Trading Company and various other lumber companies settled there, including Commonwealth Plywood. Kipawa is a variant of the Algonquin word "Kebaowek" which refers to getting off or disembarkation, or the location where one can pick up supplies or trade

[10] Red Wine River, (stream) is located in Newfoundland and Labrador, in Canada (America). Part of the Red Wine-Letitia alkaline province in Central Labrador (Currie 1976) consists of two major complexes: the Seal Lake-Letitia Lake complex on the north and and the Red Wine complex on the south. The Red Wine complex consists of two separate but genetically identical plutons approximatelly 12 km apart designated as Noth Red Wine and South Red wine by Curtis & Currie (1977).

[11] Neo Performance Materials Inc. is engaged in manufacturing advanced industrial materials, such as magnetic powders and magnets, specialty chemicals, metals, and alloys. The Company operates through three business segments: Magnequench, Chemicals & Oxides (C&O) and Rare Metals (RM). https://www.neomaterials.com/

[12] Hudson Resources And Neo Performance Materials Sign Agreement On The Sarfartoq Rare Earth Element Project In Greenland. https://www.neomaterials.com/hudson-resources-and-neo-performance-materials-sign-agreement-on-the-sarfartoq-rare-earth-element-project-in-greenland/

[13] Mkango’s corporate strategy is to develop new sustainable primary and secondary sources of neodymium, praseodymium, dysprosium and terbium to supply accelerating demand from electric vehicles, wind turbines and other clean technologies. Mkango is developing the Songwe Hill rare earths project in Malawi, with a Pre-feasibility Study completed in 2015 and a Definitive Feasibility Study completed in July 2022. Malawi is known as “The Warm Heart of Africa”, a stable democracy with existing road, rail and power infrastructure, and new infrastructure developments underway. https://www.mkango.ca/

[14] Ucore has an effective 100% ownership stake in the Bokan-Dotson Ridge Rare Earth Element Project in Southeast Alaska, USA. https://ucore.com/ucores-rare-earth-separation-commercial-demonstration-plant-on-track-for-q4-2022-commissioning/

[15] The University of Quebec (French: Université du Québec) is a system of ten provincially run public universities in Quebec, Canada. Its headquarters are in Quebec City. The university coordinates 300 programs for over 87,000 students.The government of Quebec founded the Université du Québec, a network of universities in several Quebec cities. In a similar fashion to other Canadian provinces, all universities in Quebec have since become public.

[16] https://www.internationalaffairs.org.au/australianoutlook/book-review-rare-metals-war/

[17] MiningWatch Canada is a non-governmental organization based in Ottawa, Ontario. Founded in 1999, it acts as a watchdog of Canada's mining industry. MiningWatch is part of the Canadian Network on Corporate Accountability, the Canadian Council for International Cooperation, and the Halifax Initiative.

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