There are 17 elements found on the earth that are classified as rare earth elements (REE). While the word "rare” may make you think that these elements are scarce, they are in fact found all over our planet but typically in small amounts. The term "rare earth” comes from their initial discovery in which only tiny portions of these minerals could be isolated from larger quantities of still more common elements.

Today, "rare earth” is used to describe any of the 15 metallic chemical elements with atomic numbers from 57 to 71 (called "lanthanides”) and the chemically similar elements scandium and yttrium.

The global demand for rare earths has increased as more uses for these elements are found. Today there are hundreds of uses for REE, ranging from high tech (lasers, camera lenses, computer memory modules, x-ray machines), energy (batteries, lamps, superconductors) and industrial (aerospace, caustic cleaning agents, specialized glass) applications.

A List of All Rare Earth Elements

(Remark: Z = Atomic Number)
Elements 29, 61 = Rare Earths
Elements 57 – 60, 62 = Light Rare Earth Elements
Elements 39, 63 – 71 = Heavy Rare Earth Elements

Rare earths elements are also being used for a growing number of applications. At the forefront of this wave of discovery are new technologies being developed for computer science uses, industrial engineering, renewable energy sciences and military applications.

Here are a few examples of how rare earth elements are being utilized in the world today:

Electronics:
Television screens, computers, cell phones, silicon chips, monitor displays, long-life rechargeable batteries, camera lenses, light emitting diodes (LEDs), compact fluorescent lamps (CFLs), baggage scanners, marine propulsion systems.

Manufacturing:
High strength magnets, metal alloys, stress gauges, ceramic pigments, colorants in glassware, chemical oxidizing agent, polishing powders, plastics creation, as additives for strengthening other metals, automotive catalytic converters.

Medical Science:
Portable x-ray machines, x-ray tubes, magnetic resonance imagery (MRI) contrast agents, nuclear medicine imaging, cancer treatment applications, and for genetic screening tests, medical and dental lasers.

Technology:
Lasers, optical glass, fiber optics, masers, radar detection devices, nuclear fuel rods, mercury-vapor lamps, highly reflective glass, computer memory, nuclear batteries, high temperature superconductors.

Renewable Energy:
Hybrid automobiles, wind turbines, next generation rechargeable batteries, biofuel catalysts.

Other interesting facts about uses for rare earths:
The rare earth element europium is being used as a way to identify legitimate bills for the Euro bill supply and to dissuade counterfeiting.

An estimated 1 kg of rare earth elements can be found inside a typical hybrid automobile.

Holmium has the highest magnetic strength of any element and is used to create extremely powerful magnets. This application can reduce the weight of many motors.

                    


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Lynas Corp has no doubt been one of the headline leaders in February. After a protracted legal ordeal to confront environmental activists, at the end of February, Lynas started producing rare earth products at its LAMP processing plant in Malaysia. Lynas is expected to ramp up production by the second quarter of 2013 at a rate of 11,000 tons per year. The start of production and the preparations for the first official shipment have shifted have officially shifted Lynas’ mode from development to production. This shift is reflected in CEO Nick Curtis’ decision to step down from his chief executive role to remain as Chairman. He will be replaced by Eric Noyrez at the end of March and whereas the news may appear as a bombshell, the change at the executive floor reflects a planned transition and Lynas’ official switch from development to production. Indeed, Mr. Curtis, who will remain at Lynas as non-executive Chairman and who has led the company through a particularly challenging period, will leave on a high note in the wake of the start of production announcement. Eric Noyrez, , has extensive experience in chemical processing companies having held executive positions at Rhodia Group and Shell. Many will recall that Rhodia owns a rare earth processing facility in La Rochelle, France.

Lynas completed its initial commercial product samples, en route to nominal Phase 1 capacity (which is expected before Q3 2013).  Lynas also announced that it would receive an AUD$15.2 million rebate payment from the Australian Taxation Office (for R&D expenditures generated in 2012) in March. Nevertheless, rare earths prices continued to suffer in February, reflecting the trend from January. Nevertheless, the scenario is more complex.  Lower prices were seen in praseodymium oxide, yttrium, neodymium oxide, terbium oxide, rare earth carbonate, dysprosium oxide and europium oxide.  The remaining metals in the index actually managed to post gains for the month with neodymium, lanthanum oxide, and praseodymium neodymium leading the list of gainers.

                 

A combination of new supply and weaker domestic demand out of China is being viewed as the reason for the falling Rare Earths prices but it is important to look at individual examples in the metals index because these negative moves are not seen in all areas.  Export numbers for Chinese rare earth products have been the subject of debate (as different sources have reported different figures and Hong Po’s recent articles have highlighted some recent numbers), but all of the available data suggests that increased on-stream supply continues.

Chinese producer Rare Earths Global (LSE:REG) released a statement saying it is unlikely 2012 profit forecasts will be met, and that “normalized” losses will be seen on broader downside price changes in the rare earths market.  The company cited rapid industry changes and governmental uncertainties (the election of a new Chinese leadership body, changing statements from the Ministry of Commerce, and a recent white paper on rare earths).  Rare Earths Global said the added uncertainty is creating major delays for the reception of its production quota (an export quota was not received in 2012).

These factors are seen inhibiting operations in the company’s trading divisions and separation plant.  Rare Earths Global explained it is open to the possibility of joint ventures and believes demand for rare earths oxides will rise along with increased regulation and control of production. Meanwhile, Great Western Minerals (TSXV: GWG | OTCQX: GWMGF) entered its commercial production phase at its Less Common Metals subsidiary, with confirmation that specialty alloys have been sold to three existing clients.  The program is set to ramp up production with its second strip casting furnace before the end of the current quarter.   Tasman Metals (TSXV:TSM | NYSE MKT: TAS) released information relating to its Olserum heavy rare earth project in Sweden, saying the resource comes in at 4.5 million tonnes grading 0.6% TREO, with an inferred resource of 3.3 million tonnes grading 0.63% TREO (both with a 0.4% TREO cut-off).


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Molycorp’s shares are trading at the lowest point yet; they have crossed the negative side of the ‘not so magical’ USD 6.00/share floor this week, finding bottom at USD$ 5.73/share on the last Thursday in February and started to recover a little on the first day of March. Many stocks experienced a topsy-turvy trading week and many could attribute the moody pattern to the fears about the results of the Italian elections and their impact on the Euro – and as a result on prospects for a European economic recovery. However, Molycorp has no such luxurious excuse; its stock has been feeling the impact of its decision to postpone the filing of its fourth-quarter report with the Securities and Exchange Commission.

Molycorp needs more time to calculate – or perhaps to prepare investors’ stomachs – the sum of a goodwill impairment charge that will be noted for the fourth quarter related to its USD$ 1.3 billion acquisition of Neo Materials (Molycorp Canada) last spring. This news stings all the more given how it contrasts with news that Lynas Corp (ASX: LYC) has officially launched production. Apart from Molycorp, then, Lynas is the only listed company outside of China able to supply rare earth metals, from mine to finished product, in 2013. Indeed, Lynas is producing rare earths in Malaysia, with ore from its own deposit material in Mount Weld. The level of production will soon rival Molycorp as the Company expects to produce 11,000 tons of REE in the second quarter of 2013.

Accordingly, Lynas shares rose by at least 4.3%; Molycorp dropped by twice that percentage. Nevertheless, is Molycorp actually the one that should be blamed? Perhaps not. Demand for rare earths exists. The U.S. Department of Energy estimated in late 2011 that there was a real risk for the production of wind turbines with synchronous motors using permanent magnets treated with dysprosium. These engines are very popular because they are much more efficient than induction motors using copper, improving performance and usability – given that they can function with less wind. Then there are the heavy rare earths (europium, terbium and yttrium) powder phosphors needed in video screens and light bulbs. In 2010 China produced 81% of magnetic alloys for permanent magnets; 13% were made in Japan and North-East Asia (i.e. South Korea), 2% in the United States on foreign license and 4% in the rest of the world including Europe.

A similar pattern explains the geographic distribution for producing powder phosphors. China is not the one to blame for its dominance – and why should it? After all China was handed the rare earths industry dominance on a silver (perhaps masquerading as dysprosium) platter. Europe and the United States, in contrast, have sinned by lacking vision and strategy; they have squandered their expertise and scientific knowledge and not just in rare earths. Indeed, the technology for processing rare earths has completely American and European (mostly French) roots.

The chemistry to separate rare earths speaks was developed in France thanks to the experiments by Paul Lecoq de Boisbaudran (1838-1912) who discovered samarium and dysprosium and Georges Urbain (1872-1938) who discovered lutetium and invented fractional crystallization. Then there is the Manhattan Project, which resulted in the atom bomb while also leading to devising a hydrometallurgical process (ion exchange and later solvent in 1953) to process rare earths. The Manhattan Project first explored the separation of lanthanides before separating radioactive actinides. In Europe, there was the good sense to maintain separation and purification technology at La Rochelle. Molycorp and Lynas were supposed to help reverse the trend, also because China itself may soon to go beyond its domestic rare earths supplies. Technology is increasingly controlled by China. This is odd because the patents for separating and processing rare earths are owned in the West (and Japan). General Motors and Sumitomo announced discovering the process to make neodymium-iron-boron magnets in 1982.

Magnequench, originally a subsidiary of General Motors, was established in 1986 to produce Nd-Fe-B magnets in Anderson (Indiana). Then there was the beginning of the end of the western dominance. In 1995, Magnequench was sold to Sextant Group, an American but Chinese controlled company, which then promptly moved the production line to China in 1998, shutting down US operations. Magnequench returned to the West through Neo Material Technologies, a Canadian corporation acquired in 2012 by Molycorp, whose concentrates required for the production of permanent magnets are still exported to China.

The Molycorp woes are, in a sense, keeping the United States dependent on China for neodymium-iron-boron. Hitachi of Japan now owns the original Sumitomo patents after the 2007 merger between Sumitomo Special Metals Co. and Hitachi Metals. There are also agreements between Hitachi and cross Magnequench. Overall, the framework is favorable to the rebirth of a North American or Western rare earth industry. For Molycorp, the question now is to what extent the write-down will affect its long term business. If we assume that the mine-to-magnet business is the right approach, then the write down will have very short term impact and one probably already absorbed by the market over the past two days. Molycorp’s strategy may yet pay off; however, it will only become a winner if the West changes its attitude to technological know-how – sending it off to cheaper labor markets simply to save a buck has been a short-sighted policy and not just in rare earths.


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After falling 22.8 percent, lanthanum oxide was the biggest mover in this week. Cerium oxide weakened by 17.0 percent. Rare earth carbonate finished the week after falling 15.4 percent.

Neodymium oxide dropped 8 percent over the past week. Europium oxide prices fell $30 per kilogram, down from a week ago. Europium oxide saw a 3.4 percent drop-off this week. The past week saw praseodymium neodymium oxide close after a 3.2 percent decline.

Praseodymium oxide fell 0.7 percent over the past week.

Neodymium prices held steady from the previous week. The week also finished with no movement for samarium oxide, terbium metal, terbium oxide, yttria and yttrium.

          


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