Rare-earth opportunities arise in the US

While light rare-earth elements (LREEs) – produced in China and several other parts of the world – are currently in oversupply, there is an increasing demand for heavy rare-earth elements (HREEs) in the US, as HREEs are produced solely in China, says US-based rare-earth minerals company Texas Rare Earth Resources.

“The general state of the rare earths industry is one of stable pricing, but we need to look at the industry in terms of the LREE market and the HREE market, and not as just one entity,” explains Texas Rare Earth Resources chairperson Anthony Marchese.

The company tells Mining Weekly that the biggest growth potential for rare earths lies in North American projects that produce HREEs. “There is extraordinary demand for HREEs in the North American marketplace,” Marchese notes, adding that the defence industry in the US is a major HREE user, as heavy rare earths are used to manufacture weapon systems. Having a secure source of HREEs would, therefore, generate strong interest from the US government.
Meanwhile, Texas Rare Earth Resources is aiming to secure a strategic partner to complete the development of its low-cost HREE project near El Paso, Texas. This project will also be a significant low-cost producer of uranium, lithium and beryllium.
“The greatest challenge that Texas Rare Earth Resources faces in the rare earths industry is educating the investing public about the enormous potential of the Round Top Mountain deposit in Hudspeth County, in west Texas, just 80 miles south-east of El Paso,” says Marchese.

The Round Top project is among the world’s lowest-cost HREE projects, and will be using heap-leach technology to process its rock, which is unheard of outside China.

Marchese considers this to be the most important new technology that Texas Rare Earth Resources is adding to its portfolio. “With the exception of the South China clay deposits, there are no other projects worldwide that have demonstrated the ability to use this technology,” he says, adding that the chief benefit of this tech- nology is its simplicity and ultralow cost.
“Texas Rare Earth Resources has among the lowest-cost projects in the world – with an estimated capital expenditure of $293-million – and has an internal rate of return of around 67% with a 10% pretax NPV of around $1.43-billion, [rating] it among the most profitable rare earths mining projects in the world,” says Marchese.

This was calculated using current spot rare earths prices, not including the additional income associated with the production of uranium, lithium and beryllium, each of which potentially adds considerable profitability to the project.

Marchese concludes that the future of rare earths lies in the ability of companies like Rare Earth Resources to successfully mine and distribute HREEs, as LREEs are in oversupply, which is expected to remain the status quo for the foreseeable future.