The U.S. government is putting up millions of dollars for the construction of processing plants in North America, and Canadian companies are eligible to apply
By Gabriel Friedman
In North America, the sector faces many “chicken-and-egg” dilemmas, he said. Private investors see little upside to funding mines until there are processing plants; and conversely, investors are unwilling to put up capital for processing plants until there is a definite supply of feedstock.
The sheer number of processing steps — very roughly, ore must be mined, the rare earths extracted and separated, then further refined and transformed into oxides, then alloys and magnets — has hampered the sector, said Castilloux.
Geopolitical tensions have also coloured investors’ attitudes towards investment. In 2010, China limited exports of rare earths to Japan and prices rose briefly through 2011. Since then prices have declined dramatically, limiting many Canadian companies’ ability to raise money for projects.
That’s led many of the companies to look to for feedstock that’s being mined as a byproduct of another operation.
China controls large parts of all the steps
in the value chain, so it’s kind of the gorilla in the room
“China controls large parts of all the steps in the value chain, so it’s kind of the gorilla in the room,” said Don Lay, chief executive of Vancouver-based Medallion Resources Ltd. “So everybody in North America pays attention to it, because pricing is dictated by the Chinese market.”
His company, Medallion Resources Ltd. is planning to extract rare earths from the byproduct of heavy mineral sands mined in the southeast U.S., and could potentially look at waste products from the Alberta oilsands as a source of future feedstock. It would produce a chemical concentrate that could be converted into oxides, which could be refined into alloys and eventually magnets.
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