RARE EARTHS 101 - Avalon Rare Metals

RARE EARTHS 101
RARE EARTH ElEmEnTS: THE BASicS, EconomicS
Supply cHAin And ApplicATionS

RARE EARTH BASicS
Rare Earth Elements (‘REE’) are non-toxic elements essential to a cleaner environment and
reduced reliance on fossil fuels. Also, REE are an enormous potential benefit to human health.
3
Li
4
Be
40
Zr
41
Nb
31
Ga
32
Ge
37
Rb
57
La
55
Cs
39
Y
72
Hf
73
Ta
49
In
50
Sn
58
Ce
59
Pr
60
Nd
61
Pm 62
Sm 63 Eu 64 Gd 65 Tb 66 Dy 67 Ho 68 Er 69
Tm 70 Yb 71 Lu
Other Rare Metals Light Rare Earths Heavy Rare Earths
There are 16 REE in total, 15 lanthanide elements appearing at the bottom on the Periodic
Table, with atomic numbers ranging from lanthanum (57) to lutetium (71), plus the metal
yttrium (39); all of which display similar physical and chemical properties. REE deposits tend to
occur in two sub-groups:
Light rare earth elements (‘LREE’), which include lanthanum (La), cerium (Ce),
praseodymium (Pr), neodymium (Nd), and samarium (Sm)
Heavy rare earth elements (‘HREE’), which are less common and more valuable, include
europium (Eu), gadolinium (Gd), terbium (Tb), dysprosium (Dy), holmium (Ho), erbium (Er),
thulium (Tm), ytterbium (Yb) and lutetium (Lu)
Yttrium (Y) most commonly occur in association with HREE sub-group
REE are not particularly rare in the earth’s crust, similar in abundance to nickel or tin, but
generally not concentrated in commercially viable ore deposits.
common pRopERTiES oF RARE EARTHS
Silvery-white metals that tarnish when
exposed to air, thereby forming oxides
Relatively soft metals; hardness increases
with higher atomic numbers
Reacts with water to liberate hydrogen
gas, slowly in cold/quickly upon heating
Most REE compounds are strongly paramagnetic
Catalytic, chemical, electrical, metallurgical,
nuclear, magnetic and optical properties
Many REE compounds fluoresce strongly
under ultraviolet light
Reacts with dilute acid to release hydrogen
gas rapidly at room temperature
High melting and boiling points

RARE EARTH EconomicS
GloBAl Supply & dEmAnd HiSToRy
1794 Rare Earths discovered by Johan Gaddin in Ytterby, Sweden
1903 First commercial production of rare earth flints at Treibach in Austria
1953 Demand approximately 1,000 tons (US$25 million)
1965 First stand-alone rare earths mine opened at Mountain Pass, US
1985 Development of the NdFeB permanent magnet; China initiates low cost production
2003 Demand approximately 85,000 tons (US$500 million)
2008 Demand approximately 124,000 tons (US$1.25 billion)
2016 Demand approximately 160,000 tonnes and valued at US$8.25 billion, as of April 2012,
according to IMCOA’s demand forecast and Avalon’s price forecast
Demand tpa - REO
250,000
200,000
150,000
100,000
50,000
Rare Earths Supply & demand
Source: IMCOA, April 2012
0
2005 2006 2007 2008 2009 2010 2011f 2012f 2013f 2014f 2015f 2016f
China Supply ROW Supply China Demand Total Demand
Today, China produces over 95% of the world’s rare earth elements (“REE”). New sources are
being developed in Canada, USA and Australia. In aggregate, demand and supply will be
balanced; however, light rare earth elements (“LREE”) are expected to be in surplus while
heavy rare earth elements (“HREE”) in deficit.
year
RE Export
Quota
(tonnes)
% change demand
outside china
(tonnes)
Surplus
(Shortfall)
(tonnes)
2005 65,609 0.0% 48,000 17,609
2006 61,821 -5.8% 53,000 8,821
2007 60,074 -3.5% 55,000 5,074
2008 56,939 -5.5% 54,000 2,939
2009 50,145 -11.9% 25,000 25,145
2010 30,258 -39.7% 47,500 (17,242)
2011 30,148 0.0% 37,500 (7,352)
2012 31,100 0.0% 42,500 (11,400)
Source: IMCOA, April 2012
The china Factor-Reduced Exports
China's government has been implementing a range of policies putting the government in control of
private and unauthorized mines that produce rare earth minerals (especially from the HREE-rich South
China ionic clays), implementing stricter regulations towards improving environmental performance
of its mining sector, and requiring foreign companies to move factories to China to complete
production of items using rare earths. The outcome of these policies is reduced availability of rare
earths outside China, higher prices, and the threat of further export restrictions. The market is
encouraging companies to produce a secure source of rare earths outside China.

RARE EARTH ApplicATionS
Rare earths are used in everyday products to produce energy, reduce energy consumption,
increase energy efficiency and advance lifestyle consumer and medical products.
Energy
production
Energy
Reduction
Energy
Efficiency
lifestyle
products
Petroleum Refining
UV Filters in Glass
Electric / Hybrid
Vehicles
Color Screens
La Ce Nd Sm
Y
Eu
Tb
High-Powered
Electric Motors
Reducing Fuel
Consumption
Rechargeable
Batteries
Hardware
Components
Nd Dy Tb Nd La Nd
Electric / Hybrid
Vehicles
Lighter Vehicles
Energy-Efficient
Lighting
Medical
Services
La
Dy
Eu
Tb
Ce
Nd
Gd
Wind Turbines
Smaller, Lighter
Electric Motors
Ce
Y
La
Nd Dy Tb Nd Dy
Tb
RARE EARTH pERmAnEnT
mAGnETS (REpms)
are much more powerful
than alternatives, providing
better performance with a
smaller size, which has led to
many miniaturization applications.
REPMs have been advanced by neodymium,
dysprosium, samarium, praseodymium and
terbium.
ElEcTRic moToRS
are made more energy
efficient, lighter weight,
quieter and smaller with
REPMs. These motors are
typically used in washers,
dryers, vacuum cleaners and
compressors.
W i n d T u R B i n E
power generation is directly
proportional to the sweep
area of the blades and the
cube of wind speed. As a
result wind turbines are being
deployed in remote areas, such as
offshore, where wind speeds are greater. Wind
turbine blade spans are also getting larger and
overall assemblies taller.
Direct drive turbine generators use REPMs
and eliminate the need for a gearbox
No gearbox means a simplified turbine
drivetrain, reduced energy losses and
decreased maintenance costs
Approximately 600 – 900 kg of REPMs
are needed per megawatt of wind turbine
capacity, of which 25-30% is REE

HyBRid VEHiclES
cut fossil fuel consumption
by combining a conventional
internal combustion engine
with a battery powered
traction drive.
REE are used in the metal hydride component
of the nickel-metal hydride (NiMH)
battery, the electric traction motor, and
regenerative braking system
Hybrid vehicles contain approximately 30
kg of REE, with the majority accounted
for by the NiMH battery
REPM electric motors are used for power
steering columns, windows, windshield
wipers and more
REE play a critical role in automotive
catalytic convertors, which transform the
primary pollutants in engine exhaust into
non-toxic compounds
m R i m A c H i n E S
used for medical imaging
and diagnostics now
incorporate REPMs to
generate high strength
magnetic fields.
REPMs are replacing expensive traditional
systems of wire coils that need to be cooled
in liquid helium to reduce electrical resistance
New units provide more space for the
patient.
l i G H T E m i T T i n G
d i o d E S ( l E d s)
use phosphors which
typically incorporate rare
earth elements. The most
common LED phosphor is
cerium-doped yttrium aluminium
garnet (Ce:YAG). LEDs are 80% more efficient
than incandescent lighting and 40% more
efficient than compact fluorescent light bulbs
(CFLs).
conSumER ElEcTRonicS
such as high performance
speakers, headphones and
ear buds use tiny REPMs
for improved bass response
and higher overall sound
quality.
c A m E R A l E n S E S
binoculars, eyeglasses,
mirrors and television
faceplates are polished
using agents which rely
on rare earth oxides, often
cerium oxide. In addition,
lanthanum oxide is used to improve visual
clarity in binoculars, camera lenses, microscopes
and telescopes.
m E d i c A l : Rare earths
are used in a wide range of
applications including drug
treatments, diagnostic
techniques and equipment.
Solutions of organicgadolinium
complexes are used as
intravenous contrast agents to enhance
MRI imaging
Radioisotope yttrium-90 is used in cancer
treatment
Neodymium-doped yttrium aluminum
garnet (Nd:YAG) lasers are used in eye
surgery
plASmA TElEViSionS
and computer monitors
are coated with phosphors
which generate the primary
colours red, blue and green.
Europium is required for
phosphors which generate the
colour red. A new blue europium phosphor
retains brightness ten times longer than previous
blue phosphors. Phosphors are also used to create
the white backlight used in LCD screens.
F l u i d c R A c K i n G
c A T A l y S T S u s e
lanthanum and cerium
in the refining of crude
oil to improve the activity
and hydrothermal stability
of the catalyst, and enhance
gasoline yields.

REE Supply cHAin
RARE EARTH ElEmEnT pRocESS:
FRom RocK To TomoRRoW’S pRoducTS
Mining
Milling
Hydrometallurgy
Separation
Refining
Products
From the
ground to
crushed ore
Grinding and
beneficiation of
REE minerals
Cracking the REE
minerals to produce
mixed REE oxides
concentrate
Separating and
purifying the
individual REE oxides
To meet specific
downstream technology
applications
Permanent magnets,
LED’s, consumer
electronics
Avalon’s contribution to REE supply chain
Value added
REE pRicinG: dySpRoSium And nEodymium
dy oxide 99% min FoB china - nd oxide 99% min FoB china
Dy Oxide 99% min FOB China - $/kg
3,000
2,500
2,000
1,500
1,000
500
0
0
May - 01 May - 02 May - 03 May - 04 May - 05 May - 06 May - 07 May - 08 May - 09 May - 10 May - 11 May - 12
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
Nd Oxide 99% min FOB China - $/mt
Date range: May 2001 - May 2012
Source: Metal-Pages
coRpoRATE SociAl RESponSiBiliTy
Rare earth based materials are fundamental components in many
modern day clean technologies. Avalon believes that environmental,
economic and social responsibility should be integral to the upstream
activities used to create these critical materials; from exploration and
development to production.
In this spirit, Avalon released its first Annual Corporate Sustainability
Report in April 2012. This report was completed in accordance to the standards of the Global
Reporting Initiative (GRI), Application Level C. Download a copy at avalonraremetals.com.
www.raremetalblog.com
RARE METAL APPLICATIONS is designed to encourage
the sharing of scientific and engineering advances related
to rare metals among industrial users, investors, policy
makers, entrepreneurs and academia.