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Come see why joining this consortium of Critical Metal Producers and Consumers can help resolve your corporate needs to bringing product into the hands of users and for users to develop a long term plan for the strategic procurement of critical raw materials.
In recent years there has been a significant effort to find and to develop potential new sources of rare-earth elements (REEs) outside of China. While numerous such sources have now been discovered and are under development, there is very little capacity outside of China for the subsequent processing and separation of the rare earths, once they have been removed from the ground.
Innovation Metals Corp. (IMC) intends to do something about this bottleneck in the rare-earth supply chain, through the design and construction of centralized, independent separation facilities that are capable of processing rare-earth concentrates sourced from multiple feedstocks. Such facilities will allow participants to take advantage of low-cost tolling programs, and will provide the security of supply that results from guaranteed production capacities.
IMC’s tolling model will be much less expensive for a mine, than the cost of capital required to build its own facility. The toll charge is likely to be similar to the variable costs that the mine would have had to have paid for reagents, labor, energy and so on, to process their own rare earths.
in 2011 IMC initiated research at a prestigious Chinese REE research institute, which demonstrated that multiple rare-earth concentrates, produced from various REE-bearing mineral sources, can be processed together effectively, resulting in attractive recovery rates. In addition to the study, IMC is actively looking at a number of promising new separation technologies, some if which have not been tried with rare earths before. Other programs will be undertaken as appropriate.
While REE separation requires some degree of use of proprietary intellectual property (IP), such IP is not limited to a few companies. The ability to transport separation facilities and technology from China to other markets is currently happening with smaller, less strategic light REE (LREE) facilities being built in Vietnam. However, centralized heavy REE (HREE) separation facilities are not yet underway, due to a lack of available feedstock from any particular mine. A centralized approach is required and is one to which IMC will bring its expertise and partnerships to bear.
As a first step towards the realization of its goals for separation facilities, IMC will create a Consortium of rare-earth producers, end-use consumers, traders and government stockpile programs, bringing together the core constituencies within the rare-earths sector that can significantly benefit from IMC’s centralized separation facilities. You can read more about the Consortium and its benefits to participants here.
There is little HREE (i.e. Tb-Dy-Ho-Er-Tm-Yb-Lu-Y) separation capacity outside of China, using solvent-extraction (SX) technology. Critical REEs (CREEs) such as Nd, Eu, Tb, Dy and Y are expected to be in high demand, and are critical in producing high-performance permanent magnets, displays and energy-saving lighting. There are a number of junior-mining companies that are focused on HREE-rich deposits, however they have not yet raised the capital required to bring their mines into production. Associated separation plants cost a substantial amount of money.
End-use consumers are starting to consider making investments into mining companies to secure supplies of certain key CREEs, however this would expose a large part of their investment to elements for which they do not have a need. In addition, partnering with a single mine raises new risks to their supply chain and they have no expertise in mining. Instead, IMC believes that a centralized approach is necessary, where an independent third-party processor serves to process the feedstock for a tolling fee. This solution is not only more efficient; it allows end users to invest in the value chain, where there is additional diversity from getting feedstock from multiple mine sources.
IMC believe that centralized separation facilities are the key solution to bridging the gap between rare-earth producers and end-use consumers. Because rare-earth mineral deposits are relatively complex (the individual REEs are always found together, in varying quantities), a different type of solution is required than for other commodity types. Consumers do not really want to invest in mines that produce more of what they don’t use than what they do use, and producers will need to separate their concentrates to meet very specific and stringent customer requirements, in a cost-effective manner.
IMC has contracted GENIVAR, a Quebec-based engineering-consulting firm to conduct a technical pre-feasibility and engineering study for a centralized CREE separation plant that will utilize multiple feedstocks, to be hosted in Becancour, Quebec, Canada. The Becancour Waterfront Industrial Park was chosen in May 2012 following the completion of a comprehensive site-selection process, managed by GENIVAR, in which a number of sites in Canada and the USA were considered. Becancour has direct access to multiple hydroelectric power sources, through a modern electricity distribution network, and hosts extensive deep-water port facilities with full year-round access. It also has a bulk-liquid terminal and a railway line connected to the CN railway network. Crucially, the Becancour site is the home of a leading industrial producer of hydrochloric acid and caustic soda, which are an essential part of the rare-earth separation process, and which could be inexpensively piped directly to the future facilities.
IMC and its partner Advanced Material of Japan Corporation (AMJC), are evaluating opportunities to develop light + medium REE (L/MREE) (i.e. La-Ce-Pr-Nd + Sm-Eu-Gd) separation facilities in Vietnam. The L/MREE market will undergo significant changes in the next few years as significant new producers come online. It is expected that within a few years, China’s dominance of the rare-earth market will drop from 95% to about 70% of supply, and will continue to decline as more L/MREE deposits come into production. With these changes in production, pricing influence and control will also change. As supply continues to grow and outpace demand growth, it is expected that L/MREE prices will fall dramatically, with the possible exception of Nd, a CREE is used in permanent magnets.
IMC’s objectives are not to dominate this crowded L/MREE market. Initial studies on the development of facilities in Vietnam indicate that they could be profitable using conservative assumptions with L/MREE pricing, with revenues generating from the tolling fees paid by participating producers.