A mining industry consultant says the high processing costs and level of expertise required in bringing rare earth mines into production means most of them will fail.
In an interview with Reuters, Jack Lifton, founder of Technology Metals Research, said of the 244 companies hoping to extract REEs, less than 4% will be profitable:
“The choke point for all the companies is the question of what they can do with the concentrated REM ore once it’s above ground. You can extract the rare earths together, but then you have to separate them…the world’s REM separation capacity is 99 percent Chinese and they have unused capacity,” Lifton said.
“The Chinese overwhelmingly control this and that is the key to the rare earth industry. Without separation capacity, all you have is a loss-making ore concentrate company.”
Mining companies are striving to ramp up rare earth exploration and production after China cut its export quota two years ago on the 17 elements used in everything from manufacturing electric cars to cell phone components to magnets used in guidance missiles.
MINING.com reported Oct. 23rd on a plan by Molycorp., the only rare earth producer in the Western hemisphere, to spend $114 million to accelerate by three months the start-up of its rare earth processing facility at Mountain Pass, California.
The mine has re-opened after closing in 2002 due to low rare earth prices and a series of radioactive wastewater spills.