EDITOR: | October 28th, 2013 | 18 Comments

Rhenium: A case study in critical metals inaction

| October 28, 2013 | 18 Comments
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SONY DSCIt’s wrong to say the U.S. Congress never gets anything done. In the midst of the partisan gridlock that paralyzed Washington past the start of the new fiscal year, the U.S. House actually passed the Defense Authorization Act for 2014, sending it to the Senate, where leaders say there’s potential for early action.

What importance does that have for resource wonks – especially those who follow strategic and critical metals?

For those who plow through the 478 pages of House act (I read it so you don’t have to) there’s an alarm bell lurking in the torrent of legis-speak. Take this section in Title III:

“Tungsten rhenium wire for Department of Defense requirements

The committee is aware that the manufacturing of tungsten and molybdenum powders, including tungsten rhenium (WRe) wire, is used in a variety of Department of Defense (DOD)
applications.

The committee is aware that currently there are not suitable substitutes available for WRe wire.

Accordingly, the committee directs the Secretary of Defense to report to the congressional defense committees no later than February 1, 2014, with a determination as to whether DOD has a sufficient supply of WRe wire to support DOD requirements.

If not, the Secretary shall also submit a mitigation plan to ensure that DOD has a sufficient supply of WRe wire to support its requirements.”

In the case of Tungsten, the U.S. currently produces more than half of the metal it uses each year. Which makes Rhenium the weak link in the WRe chain. At the risk of spoiling the suspense for the SecDef staff tasked with reporting on the Tungsten Rhenium wire situation, they’ll find that

  • Rhenium has the second-highest melting point of any element – behind Tungsten, the other material in Tungsten Rhenium wire.
  • According to USGS, the U.S. currently imports 78% of the Rhenium it uses, most of it from Chile and Kazakhstan.
  • Rhenium is critical for high-temperature superalloys used in the turbines of the Joint Strike Fighter-35 and other fighter aircraft.
  • There is no Rhenium in the U.S. National Defense Stockpile.

But don’t bother looking for a Rhenium mine that produces this element. Rhenium doesn’t occur freely in nature; it can only be recovered as a by-product of the copper and molybdenum smelting process. If it’s not, Rhenium literally goes up in smoke – as a particulate that disappears up the smelter flue.

With just 50 tons or so produced worldwide each year, Rhenium is a rare metal by any definition. And it takes truly massive amounts of copper production to yield even the small amounts of Rhenium captured each year. According to General Electric:

“It takes, on Average, approximately 120 metric tons (264,554 pounds) or the equivalent weight of 44 Cadillac Escalade SUV´s – of copper ore to produce 1 ounce of Rhenium – or the equivalent of five U.S. quarter coins.”

But there’s good news – or at least there could be – by way of the proposed Resolution Copper mine in Arizona, projected to generate more than 20 tons of Rhenium per year as a copper by-product. That would increase U.S. Rhenium production by more than 200% — to a level nearly double the high point of U.S. Rhenium production at the end of the Cold War.

Not only would that help meet the non-specified military needs that caused members of the House Armed Services Committee to include the Rhenium Tungsten study into the 2014 Defense Authorization Act – it would provide for the first time a steady U.S. supply of Rhenium that would allow metallurgical engineers to “design in” the element’s remarkable physical properties, rather than engineer-out Rhenium needs the U.S. market cannot meet and which would only deepen foreign dependency.

And yet the copper mine in question remains in limbo, hung up in the very same U.S. House that passed the Defense Authorization Act — by mine opponents who claim the project will imperil a Native American sacred site, despite two rulings by the U.S. Forest Service that such concerns have no basis in fact.

U.S. policymakers have a choice to make. They can put in place a strategic resource development policy that would help produce more U.S. supply of critical metals like Rhenium – and, while they’re at it, the 18 other metals for which the U.S. is currently 100% import-dependent – or they can stick with our current faith-based resource policy on the theory that other countries will happily sell us the metals and minerals we fail to mine in the U.S.

Until then, Rhenium will remain an example of the leverage the U.S. places in other country’s hands to provide – or withhold – metals critical to U.S. national security.


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Comments

  • Jim S.

    There is a greater good issue at play here. Great article Dan. The US MUST work to obtain critical metal independence. We need watch dogs like you to keep the public informed and the pressure on the government.

    October 28, 2013 - 9:45 AM

    • vacuum

      If one looks at recent foreign policy, healthcare and overall fiscal management of the USA, one must conclude that Lifton’s REEs for North America paradigm is bunk, since it relies upon a forward thinking national policy in the USA.

      Sorry; there is no William Mulholland (1855–1935) inside the WashDC beltway.

      Rather, the North American REEs need a Steve Jobs character to rise up within the ranks and develop some sort of consortium.

      October 30, 2013 - 2:19 AM

  • vacuum

    on their website, General Moly (GMO) lists Re in technical studies of one of their Nevada, properties. Another company to examine is Thompson Creek, which has active mining and milling in the USA; unsure if Re involved, but definitely the related metals. … These operations are not abstruse as is the Resolution project in Arizona.

    October 28, 2013 - 12:26 PM

  • Daniel McGroarty

    Thanks for the kind words, Jim S. Vacuum, U.S. mines — USGS doesn’t break down the aggregate number, but we can assume General Moly is among them — currently produce approximately 9 tons of Re annually. That’s just 22% of annual usage, which leaves the U.S. with its significant foreign dependency. Resolution would more than double U.S. production (I don’t know that it would be any more abstruse than other copper mines already in production!).

    October 29, 2013 - 8:41 PM

    • vacuum

      welcome. GMO is currently not yet in production. However, it might figure as USGS resource. GMO’s chart as at support with multiple bottom tests–though weakness in the steel stocks might weigh upon molybdenum (and vanadium) companies. … Resolution would be great if it was in Idaho or Nevada, for a lot of prospects in Arizona turn out to be bunk. Just have this Bre-X feeling since Arizona is a very snaky place when it comes to mining and also realty.

      October 30, 2013 - 1:53 AM

  • Robin Bromby

    Daniel

    What price is rhenium commanding these days? It hit about $12,000/kg before the GFC and then fell as low as $4,500, but I cannot find any reliable figure for the present.

    As I communicated privately, thought this was an excellent piece. The minor metals have many fascinating stories.

    October 30, 2013 - 1:19 AM

    • vacuum

      I was wont to consider rhenium a platinum group metal (PGMs), but these are instead: ruthenium, rhodium, palladium, osmium, iridium, and platinum.

      There’s been recently cogent speculation that palladium will double in price from prices today. This then might influence the other PGMs.

      I would be curious of any inter-market relationships entangled with rhenium price other than that implied by this article–that one could say of rhenium what one says of silver: when less base-metals are produced, then less silver is produced (for there are few primary silver mines).

      October 30, 2013 - 2:04 AM

  • Anthony Lipmann

    Your article criticizing your government for inaction requires another point of view to be made. While rhenium is a rare element both in nature and production (50 mt primary supply), the fall in price from $12,000 per kg in August 2008 to present prices near $2000 per kg Re (for basic raw material of Ammonium Perrhenate) end 2013 suggests that even ‘rare’ metals both go down in price as well as up. Exactly the same is true of Rare Earths or, more correctly, the lanthanides. Both Rhenium and REs have suffered from the argument made in the USA by not entirely unbiassed lobbyists who have sought to hype the risk to the USA from an apparent dependence on foreign powers. Indeed, it was the misguided 2007 report into Critical Minerals by the National Academy of Sciences citing that the US was dependent on China for 97% of its REs that caused untold and misplaced hysteria about prices of Rare Earths. Six years after that report, Rare Earth prices are back to where they were before the National Academy of Sciences strayed into this field, and it is possible to see that the answer to U.S. fears of dependence were misplaced. All countries have deficits of some resources and surpluses of others. It was in fact the deeply paranoid Soviet system that saw the rest of the world as the enemy and thus attempted to produce all metals and resources within their boundaries that set the tone for this type of thinking. But the U.S? Surely, the U.S. has more confidence in its ability than the former Soviets. No, it is not your Congress who is wrong-headed, for they perhaps understand the one great law of economics better than the above writer – that the solution to all imbalances of resources is none other than ‘trade’. Make trade, not war. As to dismissing the rights of Native Americans as if these would be in conflict with U.S interests, these are the inconveniences that make our democracies work and ensure the quality of life that distinguishes us from other states whose mining laws in many cases overrule local interests. By all means highlight how rare rhenium is, but do not put false fear into the minds of your law-makers or citizens that anything other than foresight and trade will be the cure.

    November 18, 2013 - 11:26 AM

    • Jack Lifton

      Anthony,

      An excellent commentary, as usual. Although I am a resource Darwinian-I believe that the lifestyles and governments of those who have the resources are thus reinforced in their quest for survival-I cannot disagree with you that “make trade, not war” is the best option. I note that the Chinese seem to be adhering to this policy quite well. I also note that Europe is far more dependent on natural resource free trade than the USA is or ever will be. I think, by the way, that the bureaucrats and credentialed (but jejune) scholars of the National Academies are relatively innocent. It was the global share market hype machine that saw the opening and decided to once again fleece the suckers. Asteroid or deep sea mining anyone?

      November 21, 2013 - 9:28 AM

  • gobucks

    Couple of problems, Mr. Lippmann–

    1. Congress understands almost nothing unless it will impact their re-election efforts;
    2. Rare earth prices fell dramatically because the world demand fell dramatically. Please check the percentage of Chinese export allocations that actually got purchased—it’s way down.
    3. There are serious deposits of a wide variety of minerals in lands of the old Soviet Union. Siberia, for example, is a lot like Alaska in that respect. So no, they did have a decent reason to go get them. They’ll make money off them now.
    And then a comment–writing reports based on facts–which Jack Lifton does–is hardly a form of fear-mongering.

    November 18, 2013 - 12:03 PM

    • Gareth Hatch

      Gobucks: rare-earth prices began to fall “dramatically” as a result of the second allocations of export quotas announced in 2011. Demand for some rare earths had already dropped off prior to that, and yet the prices still kept on rising. Immediately after that announcement, the upward price climb switched to decline.

      November 18, 2013 - 12:08 PM

  • gobucks

    Thanks for the clarification.

    November 18, 2013 - 1:44 PM

  • Daniel McGroarty

    Apologies to the recent round of commenters. I’ve been unplugged for the past while for matters of family. Nice to resurface and see Rhenium is still on people’s radar screens. The lengthy comment above casts — perhaps castigates is the better word — me as a critic of “my” government, and I suppose I am, from a sort of “tough-love” perspective: I’d be delighted to write a piece commending the government for getting things right… which does happen. I worked in the USG and that experience informs my work, but the cabinet departments can do their own press releases. I’m more interested in what I see in regard to the interaction of politics, policy and resources.
    And of course that involves the global market and trade, the freer the better. But it is to me inarguable that we don’t live in an Econ 101 textbook, but in a world where power politics intrudes, and trade between countries is not always free of the quest for leverage and advantage. Even the father of free market theory, Adam Smith, knew that — a topic for another day.
    And finally, Rhenium and REEs are just one tiny corner of this issue — resource access and resource security — that I believe will be one of the defining factors of the decades ahead.

    November 19, 2013 - 11:54 AM

  • gobucks

    A republic must have criticism from its citizens in order to function.

    November 19, 2013 - 12:23 PM

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    April 23, 2016 - 9:25 PM

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