REEs : Rare Earth Elements

1. REEs: Rare EarthElements Group 8: Claudia Bencini Marta Cenni Antonio De Santis Giulia Stola Source: USGS, “The Principal Rare Earth Elements Depositsof the United States—A Summary of Domestic Deposits and a Global Perspective”, By Keith R. Long, Bradley S. Van Gosen, Nora K. Foley, and Daniel Cordier. Scientific Investigations Report 2010–5220.

2. REEsgroup 15 lanthanide elements: lanthanum, cerium, praseodymium, promethium, neodymium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium. yttrium and scandium(similar chemical properties) 17 REEs in total

3. WhyREEsisaninterestingtopic? “The Middle East has oil, but China dominates the rare earth elements.”

4. “catalysts for high tech-living” REEsas… Many defense applications, including missile guidance systems, mine detection, anti-missile defense and communication systems… …from energy efficient compact fluorescent light bulbs to hybrid cars, automotive catalytic converters and wind turbine generators… …from hard disc drivers to flat panel displays, iPods and magnetic resonance imaging scans.

5. REEs& theiruse

6. REEs & theiruse Some REEswillexperiencehigherdemandgrowth. Forexample, demandofNeodymiumisexpectedto rise becauseof a combinationofcurrentuses and future incresingdemandofautomobiles and windturbines. On the otherhand, demandofLanthanumwilldecrease. Lanthanumisused in nickel metal-hydridebatteriesthatwillbereplacedbylithiumbatteries.

7. Where are theydeposited? Rare Earth Elements are rarely concentrated into mineable ore deposits. Alkaline rocks and carbonatites

8. REE deposits worldwide(three categories) Deposits sufficiently explored to estimate a mine plan resource (Australia, Canada, U.S., China) Resources for well-explored deposits that have not yet been subject to a feasibility study that includes a mine design (Australia, Canada, Greenland, Malawi) Unclassified resources (Australia, Canada, Brasil, Burundi, Kenya, Kyrgyzstan, South Africa, Turkey, Vietnam))

9. World Rare Earth Mineral Resources U.S. and world resources are contained primarily in bastnäsite and monazite.

10. REE PROCESS Dr. John Burba, ChiefTechnology Officer at Molycorp Minerals, the company that runs the only rare earth mining operation in the U.S., pointed out that, “Mining gold is a much simpler procedure than miningREEs.” One method in processing gold ore is simply to mix theore with sodium cyanide. The gold is then leached right out. Rare earth elements are far more complicated and costly to extract.

11. Rare Earth Element Mine Production Significant amounts of rare earth elements are produced in only a few countries. • China is the dominant producer of rare earth elements (over 97% of the world mine production on a rare earth oxide equivalent basis). • Other countries with notable production in 2009 were: Brazil, India, Kyrgyzstan and Malaysia. • Minor production may have occurred in Indonesia, Commonwealth of Independent States, Nigeria, North Korea and Vietnam. • Significant exploration and new mining activity is expected from Canada and Australia. Source: http://geology.com/articles/rare-earth-elements/

12. Rare Earth Element Mine Production (2) United States, almost entirely from Mountain Pass, California; China, from several deposits; all other countries combined, largely from monazite-bearing placers. Three periods of production are evident: the monazite-placer era, starting in the late 1800s and ending abruptly in 1964; the Mountain Pass era, starting in 1965 and ending about 1984; and the Chinese era. The United States once was largely self-sufficient in REE, but in the past decade has become dependent upon imports from China.

13. A GROWING DEMAND FOR REEs Decades of underinvestment in the mining and separation of REEs elements This bring the industry ill-preparated to meet the current level of demand Over the years, only China has recognized the strategic significance of these resources and has succeeded in gaining a near monopoly on production (97%)

14. Since 2005, global investments in clean energy have grown by more 230%, with worldwide investments in 2009 totaling more than 162 billion REEs are an increasingly strategic grouping of raw metal that are included in a broad range of cutting edge technologies including the energy-related technologies The demand for those technologies, and therefore the essential REES , has and will likely continue to increase dramatically

15. Supply deficit of REO by 2014 (the demand over time is expected to exeed the industry’s capacity to produce them) Forecast of demand-supply of REEs in 2014 Source: Oakdne, Lanthanide and Alternatives, May 2010, P39 (Data from IMOCA)

16. Despite the name, “RARE EARTH” are not so rare, the problemistofindaneconomic way toextractthem. Some industries could suffer for a low level of supply, for example wind and Evs industry.

17. It is NECESSARY to discover new mines around the world BUT it is extremly complex WHY?

18. Two of the worl’s major mines: Mount Weld in Australia and California’s mountain Pass have the approvals and infrastructure but are still working to secure financing • South Africa, Vietnam, Kazahhistan, Australia would come online in the next 2-4 years

19. CHINA 1960: Cina startedtoincrease the levelofinvestment in explorationimproving the methodofproducion due to the factthatitbegantoviewREEsas a strategicresources 1980: Chineseminingoperationincreaseddrammatically and between 1978-1980 the production risedaround 40% China produce REO at a lower cost than the rest of the world

20. China overtakes US as the world’s primary producer Annual REO Production 1985-2009

21. China’s policy restrict the exports of rare earth raw materials in particular for dysprosium, terbium, thulium, lutetium, yttrium, and other heavy rare earths.

22. China’s Rare Earth Production and Exports, 2006-2011 Source: China Ministry of Land and Resources. U.S. Geological Survey. Ministry of Commerce of China. Note: USGS production data exceeded Chinese quotas, some of which is attributed to illegal mining • Quota decreasing both in terms of the number of companies allowed to export as well as the volume allowed

23. Bring a dispute resolution case against China in the WTO W.T.O. Filings – In October 2010, the U.S. Trade Representative initiated an investigation into China’s clean energy sector, in response to a petition filed by the United Steelworkers Union. Among other things, the petition argues that China’s rare earth export quotas violate the World Trade Organization General Agreement on Tariffs and Trade. A letter written by four U.S. Senators in March 2011 asked to the Obama Administration to propose at each multilateral bank, including the World Bank, to oppose the approval of any new financing to the Chinese government for rare earth projects in China.

24. ElectricVehicles & REEs EVs and Hybrid cars reduce hydrocarbon consumption requirements by replacing or supplementing a traditional internal combustion engine, with a battery-powered electric traction drive

25. REEs in EVs REEs are in many parts of Evs: motors, NiMH batteries, windows, glass, catalytic converters, electronic equipment

26. The technologyforEvs Rare Earth Permanent Magnet It stimulates the flow of electrons from one atom to another; and by doing so, it can generate a substantial amount of electrical energy. These electric traction drives can supplement or even totally replace the internal combustion engine!

27. NiMHbatteries • Nickel-metal hydride (NiMH) batteries currently dominate the HEV market rare earth LANTHANUM is the key input for these batteries They store about 100 watt-hours per kg and are much more thermally stable than the lithium ion batteries

28. China and qualityissues Sintered neodymium permanent magnets are used in the car industry and largely produced OUTSIDE China China produces huge amounts of neodymium magnets but has to deals with: China focuses permanent magnet production on Quantity more than quality

29. Japan Because of these problems related to Chinese production Japan imports REEs from China but produces permanent magnets internally

30. Nickel batteries • The first successful NiMH battery using rare earth metals was patented by Stanford Ovshinsky, founder of Ovonic Battery Company (Energy Conversion Devices Group) • ECD still holds the patent, but has licensed it to a number of companies. • The largest producers are Japanese with 95% of NiMH batteries for EVs Primearth EV Energy was former Panasonic Electric Vehicle Energy, is a joint venture between Matsushita Electric Industrial Co., Ltd. and Toyota Motor Corporation; it produces all batteries for Toyota's vehicles supplies, among others Honda and Ford.

31. Business Case – Toyota Prius • Launched in 1997 • First hybrid vehicle to be mass produced • Up to 2011 more than 3 millions of Prius have been sold Sales of Toyota Prius have always increased since its launch in 1997 In thousands source: Toyota, 2010

32. Business Case - Toyota Toyota Prius uses about 10kg of Permanent Magnet NiMH Battery The NiMH battery in Prius cars were firstly launched in 1997. Nowadays are smaller and lighter 1 battery package weights 37 kg (was 67kg in past) Source: Rare earth content of permanent magnet and NiMH battery in a Prius (Sources: Bubar, 2011 and Maruo, 2011)

33. Present and future perspectives Need to reduce dependence Open for new possibilities

34. Li-ionbatteries • LITHIUM is the key input for lithium-ion batteries Great power density. They store about 150 watt-hours per kg

35. Li-ionbatteries GS-Yuasa Group Set up in 2004 from JV between Mitsubishi and Mitsubishi Motors the group also includes a Honda JV and Toyota is one of the principal shareholders. GS Yuasa is choosing Li-ion technology instead of NiMH for Hybrid and Electric vehicles • Other companies choosing Li-ion for hybrid and electric vehicles are e.g. Hitatchi, Saft, SB LiMotive and Toshiba.

36. FromNiMHtoLi-ion We believe that in future hybrid and electric cars will have an increasing success. We are observing a shift from NiMH batteries to Li-ion batteries (best for PEVs) Many battery manufacturers are producing and/or developing Li-ion batteries instead. Even Toyota will be using Li-ion batteries in a coming plug-in version of Prius. NiHM Li-ion

37. …andwhatabout China? • Has the largestreservesofREEs • Isincreasingbattery production Data scource GBI research

38. …andwhatabout China? (2) • Is already moving toward Li-ion battery in EVs

39. References • http://geology.com/articles/rare-earth-elements/ • Rare EarthElementsLetter International, the independent information and advice bulletin for Rare Earth Elements and related investments, January 2011 • USGS, “The Principal Rare Earth Elements Depositsof the United States—A Summary of Domestic Deposits and a Global Perspective”, By Keith R. Long, Bradley S. Van Gosen, Nora K. Foley, and Daniel Cordier. Scientific Investigations Report 2010–5220 • The Product Chains of Rare Earth Elements Used in Permanent Magnets and NiMH Batteries for Electric Vehicles, T. ERIKSSON ,D. OLSSON • www.toyota.com • Future of global advancedbatteries market outlookto 2020: Opportunitiesanalysis in Electronics and transportation, GBI Research, January 2010. • Rare EarthElement – Industrial mineralresouces. Stephen B. Castor and James B. Hedrick. • CornellUniversity ILR School. China-U.S.TradeIssues, Wayne M. Morrison, CongressionalResearch Service, 29-8-2011. • Carnegie Mellon University. Offshoring Technology Innovation: A Case Study ofRare-earthTechnology Brian J. Fifarek, Francisco Veloso, Cliff Davidson. 1- 1- 2007. • Technologyreview: Can the U.S. Rare-Earth Industry Rebound? Friday, October 29, 2010. • Rare earths and cleanenergy: analyzing China’s upper hand. John Seaman. September 2010. • Speech at the 6th International Rare Earths Conference. Nov. 9-11, 2010, Hong Kong, China . • INTERDISZIPLINÄRES ZENTRUM FÜR OSTASIENSTUDIEN. From Resource Advantage to Economic Superiority: Development and Implications of China’s Rare Earth Policy Daniela Lackner and Susan McEwen-Fial. N°6 october 2011.

40. Thanksforyourattention!!! Q&A