Rare Earths MMI®: Can a Clean Earths Supply Chain Save Molycorp?

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Rare earth prices are falling because the metals used in magnets, batteries and electronics are not so, well, rare, these days. That availability has come with a major environmental price.

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China has lost control of its smaller, unauthorized rare-earth producers and, without export quotas, those metals are finding their way to foreign markets.

In addition to upsetting markets, most of unauthorized producers also have minimal environmental controls and even government-approved factories dump acid-rich, radioactive waste water into giant, leaky, unlined ponds which are threatening to pollute the Yellow River, a source of water for 150 million people.

Clean Earths

Molycorp, by contrast, has cleaned up its act and spent billions restoring its Mountain Pass, Calif., project, replacing its extraction systems and securing its mines.

Molycorp told Fortune it is building a rare earth supply chain that does not produce the kind of horrifying environmental damage other mines do. That means everything from using a process called chloralkali to use recycled water to separate the ore-less bad than chemicals, apparently-to generating power on-site.

The company is also using a new process to seal and bury its toxic tailings. Before reopening Mountain Pass, Molycorp used to dump its tailings in a slurry behind a dam. Now it uses a high-pressure system to squeeze out most of the water, leaving behind a “paste” that will be reburied in what’s essentially a 90-acre landfill just west of the pit mine.

Molycorp was recently selected as a 10-year provider of rare earths to Siemens AG for its wind turbine business and both companies touted its clean supply chain as a reason behind the move. If Molycorp, and other US-based rare earths miners, want to compete with the glut of Chinese products the way they will have to distinguish themselves is through supply chain accountability.

Actual Rare Earths Prices

Closing at CNY 3,550 ($571.48) per kilogram on the weekly Rare Earths MMI®, terbium oxide finished as the week’s biggest mover with a 2.7% decline. Neodymium prices were off slightly at CNY 370,000 ($59,563) per metric ton, down from CNY 375,000 ($60,417) a week ago. Praseodymium neodymium oxide fell 0.7% over the past week to CNY 290,000 ($46,685) per metric ton.

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Cerium oxide traded sideways last week, hovering around CNY 12,000 ($1,932) per metric ton. Prices for dysprosium oxide remained constant, closing the week at CNY 1,630 ($262.40) per kilogram. Closing at CNY 1,630 ($262.40) per kilogram, dysprosium oxide remained unchanged for the week. Following a steady week, prices for europium oxide closed flat at CNY 1,600 ($257.57) per kilogram.

Neodymium oxide traded sideways last week, hovering around CNY 295,000 ($47,490) per metric ton. At CNY 390,000 ($62,783) per metric ton, the price of praseodymium oxide did not change since the previous week. At CNY 25,000 ($4,025) per metric ton, the week finished with no movement for rare earth carbonate. Samarium oxide prices held steady from the previous week at CNY 17,000 ($2,737) per metric ton.

Terbium metal remained essentially flat from the previous week at CNY 4,900 ($788.81) per kilogram. Prices for yttria remained constant, closing the week at CNY 34,000 ($5,473) per metric ton. Following a steady week, prices for yttrium closed flat at CNY 270.00 ($43.46) per kilogram.

The Rare Earths MMI® collects and weights 14 global rare earth metal price points to provide a unique view into rare earth metal price trends. For more information on the Rare Earths MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.

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