��������apk

Since founding privately held USA Rare Earth three years ago, Pini Althaus has focused on turning his vision of creating a secure supply of rare earth elements in the United States a reality.

The New York-based CEO is equally determined to establish REE separation and processing capability in the U.S. and build manufacturing facilities for magnets containing the critical elements that are used in everything from American Tomahawk missiles and fighter jets to electric vehicles and wind turbines.

It’s essential, he said, in order to wean the world from its dependence on processing REEs in China, which in recent years has also become a net REE importer.

Based on a CRU Rare Earth market study last year, the global market for rare earth oxides is about $3.4 billion annually (165,000 tonnes), Althaus pointed out, and not only does China have a monopoly on rare earth processing but the U.S. is the largest single importer of rare earths in the world and gets an estimated 80% of the material from China.

Currently there are only two significant primary rare earth mines owned by Western companies and operated outside China: Lynas Corp.’s (ASX: LYC; US-OTC: LYSDY), Mt Weld mine in Australia (which sends its concentrate to Malaysia for processing) and MP Materials’ Mountain Pass mine in California (which ships its concentrate to China).

“Everyone outside of China is at China’s mercy to provide these materials so if we don’t develop mines and processing facilities outside of China, manufacturing grinds to a halt,” the Australian CEO said in an interview, adding that the Asian powerhouse is also “expanding its stranglehold on the minerals beyond its borders.”

“China is going around the globe trying to find rare earth projects to develop, which is putting a squeeze not just on the U.S. but also countries like South Korea, Japan and Australia,” he said. “The U.S. has to step up its game.”

A blueprint for change

Althaus’ journey began when he spotted an opportunity to earn a majority stake in Round Top, a polymetallic deposit in southwestern Texas, about 138 km from El Paso, owned by Texas Mineral Resources (US-OTC: TMRC).

Round Top contains 16 of 17 rare earths – all 11 heavy rare earths and five light rare earths – and importantly all five rare earth elements required for making permanent magnets.

USA Rare Earth is on track to complete its 70% earn-in for $10 million in the first quarter of this year, he said, and will then spend another $3 million for another 10%.

“It looks like a good deal now, but back then there was a lot of risk involved,” Althaus recalled, adding there were “no takers at the time” for Round Top and Texas Mineral Resources “had difficulty raising capital in the U.S.” as rare earth prices tanked in 2013 and remained low when the option agreement was signed.

“When we were introduced to them it was early 2018, relatively soon after the Molycorp bankruptcy,” he explained, referring to the previous owners of the Mountain Pass mine, which was acquired by MP Materials. “At the time there was absolutely no appetite for rare earths.”

But no two rare earth projects are alike, he continued, pointing out that the Mountain Pass deposit is weighted towards light REES like cerium and lanthanum, while Round Top’s contains a greater proportion of heavy REEs. Round Top also contains lithium, uranium, beryllium, gallium, hafnium and zirconium, all of which are on the U.S. government’s Critical Minerals list.

Texas Mineral Resources completed a preliminary economic assessment of Round Top in 2013, but due to low REE prices, the project’s economics weren’t as robust, Althaus explained. After taking the project on, USA Rare Earth spent several million dollars bringing the deposit’s lithium component into the mix. Lithium makes up about 30% of Round Top’s mineralized material.

Once in full production, USA Rare Earth forecasts Round Top will extract enough mineralized material to annually produce more than 200 tonnes of dysprosium oxide, 23 tonnes of terbium, 65 tonnes of gadolinium, 65 tonnes of samarium, 180 tonnes of neodymium and 67 tonnes of praseodymium, along with about 10,000 tonnes of lithium.

The next step was taken in December 2019, when the company opened a pilot plant in Wheat Ridge, Colorado, to separate and purify the REEs and other minerals.  The plant will process leach solutions from Round Top using continuous ion exchange and continuous ion chromatography, to separate and purify up to 26 recoverable elements.

Ion-exchange and chromatography was developed initially by the U.S. government’s Manhattan project in the 1940s, Althaus said. The process involves two columns working in parallel. Ion exchange takes place in one column, while the resin in the second column is being regenerated, resulting in continuous operation.

The method’s advantages, Althaus said, include its smaller footprint because it reduces the amounts of reagents normally required to process rare earths using solvent extraction methods. “Solvent extraction requires many and in some cases hundreds or thousands of mixer-settlers,” he explained, “so there’s a significant carbon footprint.” In addition, ion exchange can separate REEs into individual oxides while solvent extraction produces a blend that then requires further separation, he said, and “enables higher purity separations.”

For guidance, the company brought in experts on REE processing, like Mike Valsey, who spent 15 years as chief technical officer at Lynas, and, Althaus said, “is one of the few people in the world to build a processing facility.”

Valsey oversaw Lynas’ construction of its rare earths processing plant in Malaysia. Lynas, the only producer of scale of separated rare earths outside of China and the second-largest in the world, changed its name to Lynas Rare Earths last month. The company’s Mt Weld deposit in Western Australia is one of the highest grade rare earth mines in the world.

USA Rare Earth also appointed Richard Shaw to its board and as an advisor. Shaw has 35 years of experience in nuclear and metals processing industries including commercial development of continuous ion-exchange and chromatography and has advised leading mining companies including BHP (NYSE: BHP; LSE: BHP;) Rio Tinto (NYSE: RIO; LSE: Rio) and Newmont (TSX: NGT; NEM), Althaus said.

Initially, the company plans to only process a handful of Round Top’s HREEs (dysprosium, lutetium, scandium, terbium and yytrium) and three of its LREEs (neodymium, praseodymium and samarium), Anthaus explained, as some of the others “are too low value, like cerium and lanthanum and the ion-exchange process enables us to run the warehoused material through at a later date, should we opt do so.”

The company is also exploring tolling arrangements with other mining companies with rare earth projects as an alternative to shipping their material to China. “I get countless emails a week asking us to look at other peoples’ projects and see if they are viable and whether we’re interested in procuring material from them,” he noted.

USA Rare Earth started commissioning the pilot plant in February 2020 to test material from Round Top and expects to complete it mid-2021.

Althaus believes it is “realistic” to expect first production from the plant in 2023. “We’ve gone through initial components of removing the uranium and thorium, separating rare earths and into individual oxides, and we’re moving through this without many issues,” he said. “We’re not inventing the technology, it’s more about optimizing it.”

In April 2020, the company laid the groundwork for the third component of its mine-to-magnet strategy when it acquired the neodymium iron boron (NdFeB) permanent magnet manufacturing equipment formerly owned and operated by Hitachi Metals America. Hitachi closed the plant in North Carolina in 2015 after less than two years of operation following the resolution of China’s rare earth trade dispute with Japan.

According to Althaus, the equipment will allow the company to produce about 2,200 tonnes a year of rare earth magnets (neodymium iron boron), which by his calculations means the plant could produce roughly 20% of the U.S.’s magnet market. “It’s the only neodymium iron boron permanent magnet manufacturing plant in this part of the world and from what we’re seeing demand is many multiples of what the plant can produce.”

The company is in the process of disassembling the plant and will store the equipment until it decides where it wants to build a permanent magnet manufacturing plant; a decision on location is expected to be made before the end of March. “The magnet plant may be in Texas but doesn’t have to be in Texas,” he said.

As for the rare earth processing plant, the company will likely keep its pilot plant in Colorado for tolling arrangements, and build a scaled up plant on a larger site near Round Top.

In the meantime, Althaus said, the company is currently assessing options to go public in an initial public offering or other transaction, and is discussing its options with its bankers.

“We have a very large deposit with a very long mine life,” he said, pointing to an updated PEA the company completed in August 2019.

The early stage study outlined capital costs of $350.4 million, which includes an on-site rare earth oxide and separation plant and a 25% contingency. The PEA envisioned an open-pit mine life of 20 years based on mining 14% of Round Top’s resources. (According to Althaus, future studies could demonstrate a mine life of as long as 140 years.)

The economics include a payback period of 1.5 years; an after-tax net present value of $1.18 billion at a 10% discount rate; and internal rate of return of 57%. Average operating costs totalled $15.61 per tonne of rare earths produced. Initially the operation would run at a mining rate of 20,000 tonnes per day. But Althaus believes it can be increased to between 30,000 and 40,000 tonnes as required.

“The U.S. has been very much behind the eight-ball on this,” Althaus said of the country’s efforts to build a domestic supply chain of rare earths and other critical minerals that he hopes Round Top will produce one day. “The issue started 30 years ago when the U.S. let China come in and legitimately acquire the processing technology from MagnaQuench and removed it to China, along with local personnel who trained Chinese personnel. It was in retrospect a colossal mistake.”

At the time, China’s leader, Deng Xiaoping, said “the Middle East had oil and China had rare earths,” Althaus said, “but many people didn’t understand what he meant, particularly the U.S. government, and China was smart enough to understand the importance of it … It was only in 2019, after Chinese President Xi Jinping visited the rare earth magnet plant in Jiangxi province, did the sector explode with interest.”

For his part, Althaus is pleased with the company’s progress. “There’s been a lot that’s gone into getting the deposit where it is today,” he said. As for the processing plant, “this isn’t new technology, it’s been around since the 1940s, and it’s more about optimizing it. It’s not an ‘if’, it’s a when.”

(This article first appeared in )