Pope Francis opens door to greater government participation in rare earth industry
A recent US Military contract to Texas Rare Earth Resources Corp. (OTCQX: TRER) asserts the widely held opinion that western governments should invest in the rare earth industry in a systematic manner.
At the same time Pope Francis urged the US Congress to “avert the most serious effects of the environmental deterioration caused by human activity.” He was not talking about rare earths, but rare earths are a significant tool to achieve his vision.
Texas Rare Earth Resources, in conjunction with its joint venture partner K-Technologies Inc., will conduct research to demonstrate, at the bench scale level, the ability to separate and refine yttrium (Y) oxide to a minimum of 99.999% purity, ytterbium (Yb) oxide to a minimum of 99.99% purity and a third rare earth oxide, which is not being publicly disclosed, to a minimum 99.999% purity level, using continuous ion exchange (CIX) and continuous ion chromatography (CIC). It is anticipated that all work under the contract will be completed within ninety days of contract award.
Ninety days is a short period of time for a research contract, therefore we can assume that the cash value of the contract is small, possibly in the same order of magnitude as $100,000. This is good news for Texas Rare Earths but pundits are rooting for a significant shift in the rare earth policies of western countries.
Thus far, western policy of benign neglect toward rare earths has been one of the four apocalyptic horsemen of the sector. The other three are: 1. Prove new extraction and purification technologies. 2. Raise huge amounts of capital to develop projects. 3. Finds high-grade ore that is cost-effective to process.
There is a need to create government support schemes that offset the previous advantages offered by the Chinese governments with lax environmental laws. And these go well beyond importation levies.
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According to traditional wisdom, China’s lax environmental laws facilitated the commercial exploitation of rare earths in a state-sanctioned wildcat approach. Thus supported by indirect subsidies, the Chinese industry flourished until it turned into a capricious dragon that spewed fire across the western manufacturing sector like a new sequel of the Hobbit.
While China was ramping up production capacity, the western preoccupations of the early nineties were heavily coloured with oil-centric and Soviet-phobic fears, with no concern for rare earths: The Berlin wall was destroyed in 1990. In January 1991, a coalition of 35 countries took on Saddam Hussein in the First Gulf War, to protect oil interests. On December 25, 1991 the Soviet Federal Government was dissolved, leading to the independence of the USSR’s republic. Undoubtedly the price of oil, as manipulated by Saudi Arabia in the 1980s, played a role on the disintegration of the Soviet regime.
To reach Pope Francis’s vision and that of most stakeholders in the rare earth industry, there is a need for concerted and systematic western support to build up the industry in three ways: 1. Subsidize research and testing at the pilot scale of extraction and purification technologies to reduce capital and operating costs. 2. Assist with value-added research to support market uptake of rare earths in those areas where supplies have left theoretical voids in capacity building, and 3. Organize clusters of stakeholders to facilitate the exchange of ideas, licensing of IP, creation of standards and nomenclature, and support commercialization. Compare the effort of the western governments in the rare earth industries with the $ 4 B Euro investment by the European community in graphene research: to achieve a rare earth industry we need to find a way to support it.
Dr. Luc C. Duchesne is a Speaker and Author with a PhD in Biochemistry. With three decades of scientific and business experience, he has published ... <Read more about Dr. Luc Duchesne>