Friday, The House of Representatives approved the National Defense Authorization Act, which outlines the US Department of Defense’s (DoD) budget and expenditures. Included in the Act was an amendment to formulate a plan to establish a domestic source of rare earth element neodymium.
By Desmond McMahon–Exclusive to Rare Earth Investing News
On Friday, The House of Representatives approved the National Defense Authorization Act, which outlines the US Department of Defense’s (DoD) budget and expenditures. Included in the Act was an amendment to formulate a plan to establish a domestic source of rare earth element neodymium.
Widely used in green technology, Neodymium-based magnets are currently the strongest and longest-lasting type of magnet. While 50 percent of the element is still used in computer hard drives, neodymium is also used in wind turbines and electric motors, which makes neodymium an important part of the United State’s Green Initiative and an important strategic resource.
The amendment outlined and accepted the findings of a recent Government Accountability Office report, concluding that only Chinese companies are producing and selling commercial quantities of rare earth metals, rare earth processing is only performed in China and worldwide supplies are expected to tighten significantly within the next three to five years as demand continues to grow.
The Bill directs the DoD to build a plan to restore domestic neodymium production capability. Promising deposits in Australia, Greenland, Canada and the United States could be in production as early as 2014. But, with an obvious shortage of rare earth infrastructure outside of China, the bigger problem is developing US-based refining capabilities to completely rebuild the supply chain.
Complicating matters, patent licensing will need to be worked out with Japan-based Hitachi Metals for the patent to process light rare earth alloys into magnets using a small amount of cobalt. However, the patent will expire in 2012. Thomas & Skinner last manufactured neo magnets in the United States in the1990s and maintains the technical capabilities required to successfully restart neo magnet production. It is currently evaluating reentering the defense supply market by constructing a dedicated new facility on its urban Indianapolis campus.
The Senate will also work on its own version of the Bill. The legislation is expected to be signed into law later this year for implementation in 2011.
Hoidas Lake, Saskatchewan
Several companies with promising sites in North America are continuing their exploration programs. One of those promising sites is the Hoidas Lake Rare Earth Project in northern Saskatchewan. It is wholly-owned by Great Western Mineral Group Ltd. (TSXV:GWG) and is North America’s most developed, and possibly most significant, primary neodymium property. Some believe this site could be the first outside of China to produce heavy rare earths economically.
The results were reported in November 2009 for the most recent drilling program with an overall resource estimate increase of 123 percent to 2,560,835 tonnes from the previous value of 1,150,000 tonnes.
The company is in the process of completing a metallurgy study to optimize the previously defined extraction processes, and examine new potential alternatives for the Hoidas Lake mineralization. If the company can get satisfactory results from its metallurgical testing and optimization, it will move onto a feasibility study.
In March, Medallion Resources Ltd (TSX.V:MDL) released test results from previous sampling that supports the potential for high neodymium and heavy rare-earth-element at the company’s Eden site in Manitoba.
The company then announced its exploration program at the Eden Rare-Earth Project has been finalized. The first phase is to define outline targets to establish drill sites for a second-phase program, which could be completed before the end of 2010. The crew plans to be in the field by the first week of June and the first-phase of the program is expected to be completed by August.
Diamond Creek, Idaho and Lemhi Pass, Montana
Another promising undeveloped rare-earth deposit lies along and adjacent to the Continental Divide between Montana and Idaho, centered on the Lemhi Pass area where two sites are held by U.S. Rare Earths Inc (Private).
The area had been mined heavily in the 1950s and 1960s for thorium and the geologic setting in this area is complex. Rare earth elements look to be as abundant as thorium in rocks of Lemhi Pass, but the veins in this area are of note because most of them have neodymium as the most abundant rare-earth element present.