EDITOR: | April 23rd, 2015 | 10 Comments

Peak can block 80% of cerium — and transform project economics

| April 23, 2015 | 10 Comments
image_pdfimage_print

In these days of subdued rare earth prices, scant investor interest in the sector, and the need to do something to attract the market’s attention, strategy is a key requirement.

Peak Resources (ASX:PEK) has already signalled it is prioritizing toward concentrating on the REE that are used in magnets. Today the company has refined that strategy. Magnet metals are in the planned mix, cerium not so much. The company has found a way to reduce the amount of cerium being produced in its treatment plant, a technology that will be watched with interest by the rest of the world’s rare earth industry (including, one assumes, by the Chinese companies)

The magnet metals – particularly praseodymium and neodymium – are (by value) of increasing importance to the global rare earth market. That much we know, but Peak today puts some interesting statistics in front of us: the magnet metals have risen sharply in value terms from 47% of the world rare earth market in 2011 to 54% in 2012, 68% in 2013 and – in 2014 – constituting 74%.

Peak says that, in its Ngualla project in Tanzania, it has “one of the world’s highest grade neodymium-praseodymium development projects”. Those two will now be the focus.

But the problem is that in its weathered Bastnaesite (at 3% cut-off) cerium constitutes 48.2% of the resource. Praseodymium makes up 4.73%, neodymium 16.6%. The other LREE, lanthanum, comprises 27.6% of the Ngualla production zone, with samarium at 1.6% (all other REE being below the 1% mark). So much cerium, so few buyers.

Now the company claims to have overcome that problem.

Peak says laboratory work has demonstrated that it is possible to reject 80% of cerium at an early stage during the leach recovery process. Peak expects this will allow it to build a smaller plant as the capacity of the separation unit will be reduced by 40%; it will also slash the major operating cost drivers – hydrochloric and oxalic acid – by up to 60%; and while slicing only 6% off the project’s total revenue projections, the operating margins will actually be increased (because the production cost of cerium exceeds the sale price).

At current prices, and with Ngualla’s new projected rare earth production profile, 81% of revenue will now be derived from neodymium and praseodymium.

Peak signaled the cerium breakthrough last August, but now test-work has been completed on samples of high-grade mineral concentrate produced by the improved beneficiation process which demonstrate that it works. It makes sense: as the company points out, cerium is a low value rare earth that is now in over-supply, a problem when (until now) Ngualla’s production mix was going to be 45% cerium.

This ability to market the Tanzanian output will also help the marketing effort. Trying to sell cerium is no easy task. But say that Nd and Pr are available, then buyers begin to pay attention.

Incidentally, a recent Peak presentation has another interesting statistic: the breakdown in 2014 of the magnet sector shows that Neodymium had a 60% share, praseodymium a 25% share, followed by dysprosium (11%), terbium (3%) and samarium and gadolinium at 1% each. Nd and Pr make up 30% of the rare earth business by volume – but more than double that by value.


InvestorIntel

Editor:

InvestorIntel is a trusted source of reliable information at the forefront of emerging markets that brings investment opportunities to discerning investors.


Copyright © 2016 InvestorIntel Corp. All rights reserved. More & Disclaimer »


Comments

  • Tony

    Excellent news for Peak and its shareholders, this must be one major competitive advantage over the likes of Molycorp and Lynas who process all their Cerium.

    April 23, 2015 - 5:26 AM

  • InvestWatch

    Peak Resources deserves more coverage and I am so relieved to see an update! Thank you Robin.

    April 23, 2015 - 1:21 PM

  • Cem Ozyakup

    There are of course some other magic separation methods which either already works or being worked on, in the settings of a laboratory! Mr Lifton has kindly informed us about these these. He is very confident one of them would be the (only) way ahead for the Rear Earths industry.

    Could Peak Resources’ cerium rejection method surpass them?

    What is the significance of reducing (percentage) usage of dysprosium?
    1. Could this make the unregulated Chinese production gradually redundant, even if or instead of the Chinese fail to bring it to a halt?
    2. Would anyone still invest into any Heavy Rear Earth Junior mine?
    3. As dysprosium was one of the more valuable rewards to get, would the new technologies being piloted or under development, became economically more unviable?

    I think any other Rear Earth mine (not just Ngualla of Peak Resources,) primarily aiming for neodymium-praseodymium; have the undesirable cerium in their mix, (about just under 50 %,) from Mother Earth?

    Love to hear what you think.
    Cem

    April 24, 2015 - 9:37 AM

  • Jack Lifton

    Cem,

    Let me say something. I have been advising REE juniors to dump the cerium (and perhaps some of the lanthanum!) they have to produce back into the pit for the last three years. The well managed ones came to this conclusion without my help or prodding anyway. There is NOTHING new here. Rare Elements Resources, which I believe will wind up as North America’s largest supplier of ALL of the magnet metals, neodymium, praseodymium, and dysprosium showed its cerium-free, thorium free, concentrated PLS more than a year ago. The global rare earth permanent magnet industry, like the global automotive exhaust industry, has been looking for substitutes for “decades.” Thrifting is what is going on in the magnet industry NOT SUBSTITUTION. “Thrifting” means finding out how little can be used without significantly degrading the properties that the material being thrifted bestows upon the magnets. Dysprosium and terbium will ALWAYS be in short supply so long as the global demand market grows. In North America I think this means that we need Ucore, RER, and TRER in production as soon as possible so that the rare earth permanent magnet industry has the independent, secure, and reliable source of feedstocks it needs to de-risk prospective investments.
    The remaining “hole” in the non Chinese global supply chain is a secure, reliable, source of magnet-alloy production capability and capacity.

    April 27, 2015 - 9:45 AM

  • Tim Ainsworth

    Jack,

    Ames appears quite clear on “Replacement of Dy” in their latest research paper stating: “the intrinsic coercivity of (Nd 0.8 Ce 0.2 ) 2.4 Fe 12 Co 2 B melt spun ribbon and hot pressed magnets is higher than that of 5.9 wt% Dy containing {[Nd 0.45 (Y 0.66 Dy 0.33 ) 0.55 ] 2.2 Co 1.5 Fe 12.5 B} 5.58”

    The conclusion in fact mentions: “eliminating the need for Dy alloys” ……….”high temperatures applications”……….”such as the automobile engine compartment and wind turbines”.

    https://www.ameslab.gov/news/news-releases/ames-laboratory-scientists-create-cheaper-magnetic-material-cars-wind-turbines

    Also note the EU initiative ROMEO, where the R stands for replacement, states “objectives: i) to develop high coercivity Nd-Fe-B magnets with zero or drastically-reduced heavy-rare-earth (HRE) Dy or Tb content;”

    “For Goal 1 it is expected that with the planned strategy of joining the successful method of electrophoretic deposition and the grain-boundary diffusion process, combined with an average grain size of the sintered magnets of around 2 μm, the foreseen objectives will be achieved.”

    http://cordis.europa.eu/result/rcn/156247_en.html

    Now my contacts are limited solely to Cut & Paste but really does appear ROW Govts & OEM’s are successfully investing in breaking down this dependence, perhaps to largely incidental production from the higher grade NdPr resources.

    April 27, 2015 - 10:43 AM

  • JJBeswick

    Dunno Jack, seems to me both thrifting AND substitution are on the HRE-in-Magnets agenda.
    The thrifting- led by Siemens and the like- involves some pretty sophisticated processes; ultra purity, O2 exclusion, grain boundary control etc. Very successful in getting the Dy/Tb content down to around 10% of historic levels but it comes with its own costs.
    As far as I can tell, this Co/Ce mix is an absolute game changer. It’s NOT about thrifting but delivering a FUNDAMENTALLY new approach to high-coercivity magnets. Based on Nd-Fe-B but REPLACING the Dy with a relatively low cost alternative (a Cerium Cobalt mix).
    To quote the press release: https://www.ameslab.gov/news/news-releases/ames-laboratory-scientists-create-cheaper-magnetic-material-cars-wind-turbines
    “The new alloy …. eliminates the use of one of the scarcest and costliest rare earth elements, dysprosium, and instead uses cerium, the most abundant rare earth.”
    Seems your “Thrifting is what is going on in the magnet industry NOT SUBSTITUTION” mantra might well be obsolete.
    The details are of course important. The press release suggests that NONE of the extra controls (O2, purity etc) are needed, Just a change of raw materials.
    IF that is in fact the case ALL the analysis of the critical role of HRE in magnets is history.
    And along with it, the business plans of the likes of RER, Ucorp and Northern Minerals.
    Worth noting that none of this decreases the importance of Nd/Pr in high performance magnets.

    April 27, 2015 - 11:23 AM

  • Jack Lifton

    None of these announcements about REPLACING HREEs in high operating temperature cycling applications (such as under the hood) seems to mention PPAP, the Production Part Approval Process. If you are going to replace a high volume manufactured part, much less a technology, with a differently made part then Global1000 manufacturing corporations require life cycle testing and cost projection stability at least as good as already supplied. In the automotive industry the testing can take 3 years even with so-called accelerated aging. Then the new part gets a small order as an alternative supplier, and then if that works out on cost, on-time delivery, volumes, and service the newer part will replace the older part.

    It is a fantasy of University labs, government labs, and to some extent industrial labs that there are disruptive technologies that suddenly overnight replace proven technologies. Another fantasy is that a new technology, if it is PRACTICAL, displaces ALL of the previous technology by some kind of divine right of innovation.

    The same people seem to be saying that dysprosium is doomed as are saying that new separation technologies are not going to be economical or timely.

    By the way if all of the dysprosium used today were replaced by cerium in rare earth permanent magnets there would still be a massive surplus of cerium, so its price would not change.

    Time will tell if the substitution of cerium for dysprosium; immortality for human beings through head transplants; and the end of the influence of money upon politics and junior mining promotion come about.

    Jack

    April 27, 2015 - 1:44 PM

  • Alex

    At Singapure Confernce Simens told that they will not need Dy for their big magnets in future. And nanoparticles of Nd-Fe-B give the same efect as Dy dopants for magnets Nd-Fe-B. So, may be it ‘ll need not too much Dy for future magnets.

    April 27, 2015 - 3:53 PM

  • Tim Ainsworth

    Jack,

    Who exactly are these “same people seem to be saying that dysprosium is doomed as are saying that new separation technologies are not going to be economical or timely”?

    You appear to throw out that label broad brush to anyone who dares query the economics behind your HRE mantra, yet all I’ve seen to date is a bunch of very high price decks from the sub one percenters and as to current claims of viable alternate process Gareth puts it eloquently elsewhere, “I’m not a fan of ‘science via press release.’ It remains to be seen how it all works”.

    By contrast Jon Hykawy presented an excellent research piece here on the likely demand profile for phosphors http://investorintel.wpengine.com/technology-metals-intel/lighting-way-rare-earths-lighting/ which was broadly supported by GE’s presentation at Roskill’s Nov 14.

    Re magnetics, we’ve seen a string of articles from the likes of Hitachi, Siemens, et al, reporting considerable success in Dy reduction and reporting further optimism, together now with published reports from the EU & US Govt sponsored research at ROMEO & Ames respectively that clearly points in the same direction.

    Is that not sufficient that investors might at least query the projected demand/price profiles put forward by self interested parties?

    Common themes to Dy reduction appear to be supply security + price security, the flip side to the HRE mantra might be the potential growth profile of NdFeB at least partially liberated from those constraints. Where does NdFeB need to be cost/weight/power to start chewing off some serious chunks of ferrite market share for example?

    April 28, 2015 - 2:10 PM

  • Mike Sander

    Cerium now has some potential value based on the completion of the AMES Lab results of a few days ago. I am interested in hearing the experts comments on this new development. I also wonder if the Siemens agreement is based on this finding.

    April 28, 2015 - 5:02 PM

Leave a Reply

Your email address will not be published. Required fields are marked *