New Western companies seek to break China's control over rare earths refining By Reuters

By Ernest Scheyder

ALEXANDRIA, Louisiana (Reuters) – tech startups are racing to transform the way rare earths are refined for the clean energy transition, a push aimed at fueling the West's expansion into the niche sector that supports thousands of millions of electronic devices.

The existing standard for refining these strategic minerals, known as solvent extraction, is an expensive and dirty process that China has spent the last 30 years mastering. MP Materials, Lynas Rare Earths and other Western rare earths companies have at times struggled to implement it due to technical complexities and contamination concerns.

Rare earth elements are a group of 17 metals used to make magnets that convert energy into motion for electric vehicles, cell phones and other electronic devices. While American scientists helped develop solvent extraction of rare earths in the 1950s, radioactive waste from the process gradually made it unpopular in the United States.

China began expanding rapidly in the industry starting in the 1980s and now controls 87% of the world's rare earth refining capacity, according to the International Energy Agency. That prowess has helped propel the country's economy to the second largest in the world.

Emerging Western rivals now offer the tantalizing prospect of processing minerals faster, cleaner and cheaper, if they can launch it successfully.

“The current rare earth refining process is a nightmare,” said Isabel Barton, a professor of geological and mining engineering at the University of Arizona. “That's why there are so many companies promising new methods, because we need new ones.”

Interviews with nearly two dozen consultants, academics and industry executives show that if one or more of these novel processing technologies are successful as expected by 2025, they could reduce dependence on Chinese rare earth technology and its toxic byproducts. and, at the same time, reinforce the plans of Western companies. charge premium prices for strategic minerals.

While none have launched commercially (and some industry consultants and analysts wonder if they will be able to do so soon), a handful of companies are moving forward with aggressive development plans.

At a former US Air Force base in Louisiana, Ucore Rare Metals aims to process rare earths by mid-2025 using a technology known as RapidSX that it claims is at least three times faster than solvent extraction , produces no hazardous chemical waste and only requires a third of the physical space.

“Our goal is to re-establish a rare earth supply chain in North America,” said Michael Schrider, chief operating officer of Ucore, during a site visit.

Founded in 2006, Ucore initially planned to exploit a rare earth deposit in Alaska. But the company changed course in 2022 to focus on refining, not mining, a shift born of what two executives said they saw as a flaw in the West's strategy to weaken China's minerals dominance by trying to master both steps simultaneously.

Ucore, which has been testing its process with funding from the Pentagon, is in talks with 17 mining companies to buy lightly processed supplies of rare earths known as concentrate, ship them to the port of New Orleans and then truck them to an area of ​​80,800 square feet. warehouse that will be equipped with RapidSX technology starting in January.

Rare earth miners increasingly say they are content to focus on unearthing rocks, rather than complicating their operations with the additional step of processing.

“Mining companies should focus on finding new deposits,” said Luisa Moreno, president of Defense Metals, which aims to open a rare earths mine in British Columbia within four years and is interested in licensing Ucore's technology. “You should probably let the refining be handled by others who specialize in it.”

Rainbow Rare Earths plans to deploy rare earths refining technology in South Africa by 2026 developed by its Florida-based partner K-Technologies, which uses a process known as continuous ion exchange, used by some lithium producers.

Startup Aether is developing nanotechnology that programs proteins to selectively bind and extract rare earths from mineral deposits.

In Norway, privately held REETec says its patented refining process emits 90% less carbon dioxide than solvent extraction and should be operational by the end of 2024.

And privately held Phoenix Tailings earlier this year began refining small amounts of rare earths in Massachusetts through a process it says is free of emissions and waste.

“Technologies can be developed that are much better than solvent extraction,” said Robert Fox, a scientist at the U.S. Department of Energy's Idaho National Laboratory. Last month, the lab agreed to research new refining techniques for private company US Critical Materials, which is developing a rare earth deposit.

SKEPTICISM

Despite the hunger for new refining techniques, industry consultants warned that manufacturers may be expecting too much, too soon from this group of hitherto unproven nascent technologies, especially given the world's aggressive electrification goals.

Ucore's technology, for example, has never worked on a commercial scale and is not expected to gain patent protection until next year, a timeline that industry consultants have pointed to as a cause for concern given strong rivalries over intellectual property.

“The time horizon needed to develop all of these new refining technologies will be longer than many expect,” said Frank Fannon, a minerals industry consultant and former US deputy secretary of state. Talks about production within a few years “create a false sense of security among policymakers.”

However, the need for alternatives is increasing, especially following Beijing's decision earlier this year to curb exports of germanium, graphite and other metals. This has raised concerns that rare earths could be next.

Fannon and several American politicians have called on Western governments to create central processing centers for rare earths, a plan Canada is already pursuing.

In Saskatchewan, government scientists are working to launch their own rare earth processing technology after attempts to buy Chinese technology failed in 2020.

“We looked at existing technologies and said, 'There's a better way to do this,'” said Mike Crabtree, executive director of the provincially funded Saskatchewan Research Council (SRC). “We wanted to put our own spin on it.”

Using artificial intelligence, the company designed processing equipment that it believes is more efficient than its Chinese rivals. Instead of needing up to 100 people to operate, as with traditional solvent extraction, the SRC estimates that only four people will be needed to operate its plant, which it hopes to open in late 2024.

While the SRC's goal is to stimulate mining across Canada, Crabtree said it is open to licensing the technology for use anywhere in the world.

“This whole sector needs to grow outside of China to support the energy transition,” he said.

Crabtree and SRC expect their facilities to cost more than their Chinese rivals to build, but less to operate, based on their desire to make zero-waste processing equipment that recycles acid and other key chemicals.

And while MP Materials and others have struggled to adapt their processing equipment to specific geological deposits, SRC, Ucore and others say they believe their new refining processes will be able to process critical minerals from multiple locations around the world.

“These new sources of rare earths will be paramount if we are to achieve global net-zero emissions goals,” said Steve Schoffstall of the Sprott Energy Transition Materials ETF, which owns shares in several rare earth companies.

Ucore shares rose more than 6% on Monday in Canadian trading after the Reuters story, while shares traded over-the-counter in the United States gained almost 8%.

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