Could Australia Become A Major World Player In The Supply Of Rare Earth Minerals?


Rare earth elements are not quite as rare as their name suggests. The 'rare' bit dates back to when the term was used to describe something 'unusual' or 'strange'. In reality these minerals are found in many places in the earth's crust, often in combination with other minerals and often in hitherto uncommercial quantities. They are also a very hot political potato for several reasons.

Number one reason is that the largest identified REE reserves are in China (44 million meta tonnes), which is also the world's dominant producer of these minerals. China is also a country that is not shy about wielding the considerable political and economic power this gives her! Japan found this out the hard way when China shut off supply of the REEs needed to supply that country's booming electrical car manufacturing industry. And it isn't just politics that could harm world supply either. Major catastrophes like a tsunami could disable China's shipping ports and stop overseas shipments in a flash.

It's concentrated power like this that makes the world's growing reliance on these minerals a very dicey proposition and many governments have become increasingly uneasy about it. Furthermore, when you consider that all 4 top REE reserve holders are countries either prone to dictatorships and/or with poor environmental management / human rights / labour records, you begin to see that other governments are justified in their concerns! After China, Brazil with 22 million Mega tonnes has the second highest reserves, followed by Russia (18 million Mega tonnes) and India (6.9 million Mega tonnes). Australia (3.4 million Mega tonnes) is 5th, the US with 1.4 million Mega tonnes is 7th and Canada is 9th with 830,000 Mega tonnes*.

Interestingly up until the 1980's the US mine Mountain Pass was the highest producer of REEs in the world. However, it was shut down in 2002 amidst massive environmental concerns, which leads us to our second 'hot potato' reason. Some of the REEs are difficult, and dangerous, to mine. Monazite, an ore from which cerium and lanthanum are extracted, also contains thorium, a radioactive substance. Some countries have not been particularly careful about how they handle the extraction and handling process when mining monazite, leading to radioactive contamination of the surrounding environment. Notably China has begun shutting down illegal and non-compliant REE operations amidst serious environmental and health concerns. The resultant drop in availability of those rare earths has freed up opportunities for other countries, like Australia, to step into the breach should they wish to do so. And it seems that in some quarters at least the world is waiting for Australia to do just that!

Australia – A Country With Some Notable Rare Earth Resources

BHP Billiton is sitting on a 10 million tonne stockpile containing lanthanum and cerium at Olympic Dam in South Australia, the world's largest uranium mine. At Radium Hill in Port Pirie, also in South Australia, another old uranium mine currently has around 1500 tonnes of rare earths (scandium, lanthanum and dysprosium) sitting in its tailings dump.

Over in the west are a couple of other proven resources of rare earths. Brockman, currently owned by Mount Gibson Iron, is known to have large quantities of several rare earth minerals. A few kilometres north at Sophie Downs an exploration program conducted in the mid 2000's by Metminco found 'encouraging' amounts of cerium, dysprosium, lanthanum, neodymium, niobium and praseodymium. However shareholder interest in the minerals wasn't there so the ground was dropped and Metminco moved on to other more commercially viable interests.**

The question here though is – will anything come of these particular known rare earth resources? BHP Billiton is primarily interested in other commodities and realistically, Olympic Dam's uranium, copper and gold reserves are potentially worth a lot more to the company than those rare earths! And maybe that's not such a bad thing either because our demand for copper is ramping up as well. As for the gold – demand for that will likely never diminish!

The reality is that world demand for rare earth commodities is set to skyrocket over the coming decades. We've discussed some of the reasons in a previous article and the statistics are mind boggling to say the least! There are also other countries with major reserves looking to ramp up their production of REEs as well and as world demand increases, there is little doubt that they will.

Australia's reserves, although putting her only 5th in terms of quantity, are high grade deposits.*** The country is also close to the major Asian markets where a lot of the manufacturing that uses rare earths takes place. And also importantly, Australia is politically stable and on good terms with those major world powers who are becoming concerned about the concentration of such vital commodities in such a few volatile hands! All of these make her ideally positioned to become a leading player in the rare earth market.

But given the difficult and hazardous nature of mining some of the rare earth minerals there will be increased environmental concerns and also increased pressure to come up with better, safer extraction methods. The examples set by Mountain Pass and more recently China have shown us in no uncertain terms that companies and governments can't ignore the 'side effects' of mining rare earths with impunity. 

It's also entirely possible, if not probable, that demand will eventually outstrip our capacity to safely extract and supply these minerals too. At least on earth but there's always the moon****. And asteroids! The space station has been conducting tests on soil samples taken from the moon and it seems that planet is surprisingly rich in rare earths. So much so that the idea of creating robots that can find, and mine, the moon is no longer in the realms of fantasy. But just because we can, does that mean we should?

Resources:

*https://investingnews.com/daily/resource-investing/critical-metals-investing/rare-earth-investing/rare-earth-reserves-country/
**http://www.mining.com/australias-forgotten-rare-earths/
***https://investorintel.com/sectors/technology-metals/technology-metals-intel/rare-earth-supply-australia-global-domination/
**** https://edgylabs.com/mining-the-moon-and-ocean-top-5-rare-earth-minerals-for-future-tech

Mining And Its Impact On Local Communities
Rare Earth Commodities – Demand Is Stepping Up
 

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