by ADAM BRUNS
adam.bruns@conway.com
Mark A. Smith, CEO, Molycorp Minerals, LLC
We need to make better use of selected holes in the earth in order to support the alternative energy technologies designed to preserve it.
So say miners and processors of rare earth elements such as europium, lanthanum and neodymium, which lurk near the bottom of the periodic table but top the list of essential elements in such technologies as wind turbines, hybrid and electric vehicles, batteries and compact fluorescent lamps, among other products such as consumer electronics and defense systems applications.
Today, some 97 percent of the 125,000 tons of rare earths sold each year come from China, especially the Baotou region. And that nation knows what it possesses: Over the past few years, it’s taken steps to limit rare-earth exports, and has made it clear that companies needing an assured supply of these materials would be well advised to set up shop in China.
There are only two other generally recognized locations on the planet with rare earth deposits rich enough to be economically extracted: One is in Western Australia, and the other is in Mountain Pass, Calif., on the edge of the Mojave National Preserve just west of the Nevada state line. The U.S. Geological Survey once referred to the Mountain Pass rare earth deposit, in operation for the past 57 years, as “the greatest concentration of rare-earth minerals now known.” What’s more, it has all critical permits, including renewal of a 30-year mining and reclamation plan.
Previously operated by Chevron subsidiary Chevron Mining, the mine was purchased by an investors group on October 1, 2008, when Molycorp Minerals, LLC, was formed to operate it. Mark Smith, CEO of the Colorado-based firm, plans to expand operations at the site tenfold, from a current output of just over 2,000 tons per annum (well under capacity) to 20,000 tons by mid-2012. What’s more, the company will create hundreds of jobs in the process, as it expands and integrates its scope of operations from today’s mining and production of ore and concentrates to an entire range of products such as metals, alloys and magnets.
“Right now we have 120 people in the company,” says Smith in a phone interview from Molycorp’s offices just south of downtown Denver. “We’ll probably grow that to 150 this year, as we ramp up production. By 2012, we should be a company that has roughly 1,000 employees.”
In addition, he says, the company will employ an average of 700 construction employees a day during the 18- to 22-month construction period.
The mine, located on 2,200 acres of private property, has been at low production levels since 2002, due to an inability to compete on price with the Chinese. It was during that same period that Magnaquench, the world’s largest producer of bonded Neodymium magnetic powders, was forced by cost considerations to relocate its operations and 225 jobs from Indiana to China in 2003.
But Smith says Molycorp has been perfecting processing capabilities in order to be cost-competitive with any rare earth producer in the world. One benchmark: “We will need less than half of the ore from the mine to produce the same amount of material we used to produce in the 1980s and ’90s.” Helping support future growth is a nearly complete study of the deposit itself, which Smith says shows “that the resource is larger than has ever been reported before.”
