EDITOR: | August 3rd, 2014 | 13 Comments

The 800 Pound Gorilla in the room for rare earth sustainability in North America – thorium

| August 03, 2014 | 13 Comments
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The West must deal with thorium content limits before it can hope to become rare-earths independent…

800 LB GorilllaJames Kennedy works closely with the Thorium Energy Alliance to promote US legislation for the commercial development of thorium energy systems and rare earths. And when he asked me to review a video where he presents a paper entitled “Creating a Multinational Platform, Thorium, Energy and Rare Earth Value Chain – a Global Imbalance in the Rare Earth Market” – it occurred to me that Tracy’s frequently referenced ‘800 lb. gorilla’ in the proverbial rare earth room was overdue for discussion: thorium.

Kennedy’s essential argument is that the rare earth imbalance is largely the result of regulations with unintended consequences: “Rare earths and thorium have become linked at the mineralogical and geopolitical level.” In other words, thorium should be considered as a rare earth mineral.

There is, in fact, a close relationship between thorium and rare earths; they often come together. In fact, monazite, was first mined to produce thorium and rather than rare earths. In the 19th century, thorium was used to make gas mantles. Later, with the development of technology that required rare earths to function, monazite started to be mined for elements other than thorium. Meanwhile, monazite itself is a by-product. It is separates easily, through gravity and at almost no cost, in the mining of titanium or zirconium, such that the monazite can be said to be produced practically free of charge. The United States was the leading supplier of monazite – which was in the main source of rare earths – in the first decades of the rare earths industry (the post WW2 period). Brazil was also an important supplier and China, ironically, tried to become a world supplier but failed to meet Western standards and “so they weren’t able to pursue it.” How ironic! However, in the 1980’s, international classification changes concerning thorium changed the way the market saw monazite.

The International Atomic Energy Association (IAEA) placed monazite in the category of source material. After representing the major source for the world’s rare earth supply, nobody wanted to deal with monazite any longer, wondering what to do with the residual thorium. The interesting aspect is that monazite was itself an almost zero cost by-product. And this is where and when China sneaks past the ‘Western” standards to begin its rare earths market dominance. China stepped in and took advantage, deciding that it would dominate the rare earth industry, which was understood to be critically important. Western companies that had mined monazite until that point, decided to abandon the industry. Mines were shut down simply for having thorium discharges in the tailings under pressure from environmental agencies and groups. Such is the context in which companies like Molycorp in the USA or Lynas Corp in Australia have put the West back into the contest for rare earth production; and what a costly contest it is proving to be, especially because neither one of these two companies has been able to produce even moderate quantities of the high-demand heavy rare earths (HREE) – this is very costly.

The two companies alone have invested some USD 6 billion and the proverbial ‘market’ has not been kind. In order to avoid the ever longer catalogue of liabilities and risks, the markets have promoted low thorium content projects rather than high-value rare earth distributions. In the case of Molycorp, says Kennedy, the “United States, very market-oriented, balanced its short-term return goals against the cost of developing its own value chain for what are just low-value rare earths.” Moreover, despite the goal to become a US based alternative to China, Molycorp has had to invest in China, where it processes the ore (ore that delivers low market value LREE’s). Lynas has gotten itself into a similar conundrum, shipping the ore for processing in Malaysia: and all of this just to avoid the thorium by-product. In order to confront the losses, high expenses and inability to deliver HREE’s, Lynas and Molycorp are trying to boost production to break even – they have already abandoned the notion of making a profit.

The Chinese have become very skilled at maximizing profit by rationalizing all aspects of the rare earths mining value chain. Kennedy stresses that “70% of China’s rare earths come from the by-product production from an iron ore mine,” while focusing on the high value elements, which suggests that if the West is really going to compete, it will have to re-focus its efforts on developing low-cost byproduct resources. In many cases these have high thorium content and “In the United States alone, thorium-bearing rare earth phosphates and other thorium-bearing mineralization could easily meet 50% percent of world demand for rare earths.” The high HREE yield monazites are abundant. Now,  mining operations worldwide are concerned with thorium content limits and across the United States and across the world take these valuable monazites and other thorium-bearing phosphate rare earths, which are often plowed back into the ground simply to ensure the mining company has not exceeded its threshold for thorium.

So, the actual cause of the West’s reliance on China for heavy rare earths is the thorium content conundrum. The Thorium Energy Alliance has been working on legislation that will fix this issue. There are currently two bills before the US Congress “that if enacted would create a federally-chartered multinational rare earth cooperative that’s privately funded and operated, and it would be authorized to accept monazites and other thorium-bearing minerals. The thorium would be removed and stored on what Kennedy calls a federally-chartered ‘thorium bank’ for safekeeping. This will help mining companies, which help place liability to the bank, leaving the miners to produce higher value HREE’s.


Editor:


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Comments

  • Veritas Bob

    While their profit prospects may not look good, what is the basis for the statement “they have already abandoned the notion of making a profit” in “In order to confront the losses, high expenses and inability to deliver HREE’s, Lynas and Molycorp are trying to boost production to break even – they have already abandoned the notion of making a profit”? Is this profit making notion abandonment forever, or just for the next x quarters?

    August 3, 2014 - 2:01 PM

  • Fred

    The issue goes full circle. Nobody wants a radioactive storage area in their back yard. The uranium industry has seen decades of radioactive waste material held in “temporary” storage sites.

    And what are the radioactive waste issues from thorium power generation? What are the risks associated with living near a thorium power plant?

    On the legislative practicalities issue, I look at the US’s illegal immigrant children issue. Obama grants them amnesty, so they flood across the border. Obama wants to spend billions of dollars on resettling them. The Republicans want to deal with the immediate problem at the border. Who gets stuck trying to handle the issue? The state of Texas calls up 1,000 National Guard troops to throw extra resources into the problem. And Obama just reached a deal with it’s southern neighbors to inspect the trains carrying the immigrants. Instead of traveling for free, now they’ll have to buy train tickets or pay bribes. So now there’s even more money to be made in bringing them in to the US.

    There’s a quick and easy way to solve the thorium problem. Grant thorium energy companies accelerated depreciation for the construction of their power plants, with unlimited carry forward of unused depreciation expenses. Let them write off construction costs in perhaps 3 or 5 years. Let the US government back the bonds for the financing of the first batch of power plants built. If thorium is such a nice fuel to use, the markets will then make it happen.

    August 3, 2014 - 2:09 PM

    • Fred

      I should make this point clear. Politically correct people may think my remarks are racist. I would have made the same remarks no matter the title of the article. I do not think that an article should be titled in such a way as to stifle debate on the topic. I grew up as a white in a black world, while Obama grew up as a black in a white world. I may have had more real black friends than he has had. I’m not even a Republican. The topic is politics, so my discussion is politics. My solution to the topic is free world economics, with only easy to enact simple incentives from government.

      August 3, 2014 - 4:52 PM

      • Tracy Weslosky

        Fred,

        The title is a quote from a powerful Chairman in our industry about thorium and — I would argue that the title welcomes debate. This was certainly the intention…

        Thorium is rarely discussed in the REE industry, but we are well aware of the role that it has in the path to production for any of our REE leaders.

        Like rare earths, thorium is a complex subject and I applaud Jim Kennedy for his insightful commentary on this topic. It’s an excellent video, and you can access it above — providing nearly half an hour update by one of the brightest minds in our industry on what we should do….

        Thanks for visiting. Tracy

        August 3, 2014 - 5:29 PM

    • ChrisB

      “Nobody wants a radioactive storage area in their back yard.” Fred- It’s quite true about NIMBY. However people need to realize that highly radioactive elements have short half-lives, some only a few hours before all radioactivity is dissipated. Conversely, long half lives would mean low radioactivity. With a half-life of 14 BILLION years, Thorium is only slightly more radioactive than limestone!

      But thorium is great at absorbing neutrons. In fact, it has been used as an atomic shield. When thorium absorbs a neutron (when placed in a star or a reactor) it changes and in 23 days settles into a now extinct isotope: Uranium-233. U-233 is highly efficient as reactor fuel in tested (but not yet commercially built) Gen IV reactor designs. [No one has built a newly designed reactor core since the 1960’s!] China, with DOE assistance, has made a huge project (rivaling the Mercury/Apollo years) out of utilizing Th/U in a Molten Salt Reactor – which would solve both their energy crunch and smog problems simultaneously.

      [Back to topic] Thorium is not radioactively dangerous. The Thorium Bank has been proposed just to satisfy regulations which were enacted without serious thought. In fact, China has been safely storing mounds of thorium outside for years. Solving the thorium problem would mean 1) reopening mining/processing/manufacturing businesses in the west; 2) not shipping ore to China (expenses) just to process, manufacture, and return REE components back to the west; 3) not allowing China to stockpile our *thorium waste* after processing, until they find a use for it.

      August 5, 2014 - 2:24 PM

      • Fred

        Then why all the fuss? Tell the government that it should just be dumped back into the ground as an inert component.

        August 5, 2014 - 2:31 PM

  • Steve Mackowski

    Well done Jim. A very well presented case for the future of thorium. As always though gains in one area results in losses in another. I can see the uranium industry being opposed to a developing thorium industry. I once thought that thorium supplementing uranium was a very cost effective way of managing residual thorium post-REO extraction. However, since the thorium is essentially free, the impact on the uranium price would be pretty severe.
    The monazite issue in North America has always puzzled me. Why is it acceptable to blend back the monazite into beach sand mining tailings, when it is not acceptable to manage the same thorium if it produced as a chemically inert waste from a REO plant?

    August 4, 2014 - 10:54 PM

  • old grommit

    As always, it is nice to hear from Mr Kennedy. I applaud his efforts to create an energy industry from a REE by-product. It is clean, efficient and cost effective. Unfortunately for him and others in the nuclear energy industry, the world has been led like rats by the pied piper over the cliff and it will take some time for common sense to prevail. Globally, Governments rely on minority, non-scientific based “watermelons” (Green on the outside and Red in the middle) to remain in office. These minority (unelected in most cases) parties have the media convinced that human generated carbon emissions are somehow changing the climate of the world and therefore we must resort to unsustainable and costly energy sources to save the planet. Until this is rectified I fear that nuclear will remain on the back burner. The US (which was smart enough in my view to avoid signing the Kyoto agreement) has significantly reduced its carbon emissions in the last few years predominately through the use of the vast shale gas reserves. This will alleviated the “green” pressure on US governments to look for energy alternatives such as Th and thus hinder any fast tracking of Th energy technology coming to the market – a pity.
    As a participant in the Rare Earth Industry I welcome open debate and commentary around Th so thank you Allessandro for posting your article. It is only through open discussion that thorium and radioactivity can be understood and accepted. I must raise one point of issue from your article however, “Lynas has gotten itself into a similar conundrum, shipping the ore for processing in Malaysia: and all of this just to avoid the thorium by-product.” There was no radiation issue that I am aware of that prohibited LYC processing their ores in Western Australia. Illuka mines mineral sands in the region and these contain radioactive elements. In fact, there is even a Public Environmental Review document prepared in the early 1990’s for Ashton Mining (LYC’s predecessor) to build a rare earths processing plant only 100 km’s outside of Perth (a major city of over 1m people). (as an aside – readers may be interested to know that Prof. Kingsnorth appears as the Project Manager for Ashton in this document).
    I can only go on public documents and commentary here but the former MD/CEO of LYC, Mr Curtis regularly touted the advantages of Mt Weld over other rare earth deposits as being “high grade and low Thorium” . Provision of pioneering tax status and ease of access to chemicals were the reason for their LAMP in Malaysia.(not Th issues as the article suggests)
    Hindsight is a wonderful thing but maybe early, open discussion on the 800lb gorilla may have alleviated some of the current pain?

    August 5, 2014 - 4:00 AM

  • john werneken

    Idiots, and the general public (if those terms differ in any respect, which I doubt) ought to be ignored. Including the ones with an irrational fear of risk in general and of radioactivity in particular.

    August 6, 2014 - 9:10 PM

    • hackenzac

      In a one idiot, one vote system, they can’t be ignored. Check out the chapter in de Tocqueville’s Democracy in America entitled the Tyranny of the Idiots.

      August 6, 2014 - 11:32 PM

  • Fred

    I decided to expand my limited knowledge of thorium:

    http://en.wikipedia.org/wiki/Thorium-based_nuclear_power

    I had previously read that India was contemplating the REE’s to be their monazite by-products, and here I’m reading that China is also very close to commercialization of thorium based power plants.

    August 8, 2014 - 12:48 AM

  • ANOTHER COMPANY WANTS TO DO CORE DRILLS AT HICKS DOME | Disclosure News Online

    […] However, the latest item those interested in what's beneath the dome are after seems to be something else entirely: Thorium. […]

    May 4, 2015 - 2:43 PM

  • Rich Woods

    What were the concentration limits on thorium prior to the .05% limits established in the mid 1980’s. Was this the result of some environmental group effort or possibly the existing nuclear power industry? According to the NRC website they encourage ” Openness” “ensure regulatory processes, encourage transparency, collaboration and participation” Further ” Before writing or changing the regulations, the NRC solicits the views of the public, industry representatives, researchers, state officials, scientists and technical experts.” Where were the mining and geology/nuclear experts during this reclassification process? There should have been massive push back by the REE miners and end product manufacturers. Apparently there was none. The regulation just slipped through with ” unintended consequences?

    November 26, 2016 - 9:17 AM

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