U.S. on Track to be Second-Largest REE Producer
Source: Resource Investor, Brett Hartke (12/28/10)
"China continues to constrict exports, but things are about to change."
Things are about to change. The U.S. is on track to be the largest non-Chinese producer of REEs within two years. By 2012, U.S. output may account for 12% of global supply of REEs. By 2015, both Australia and Canada may also be contributing significant supply.
U.S.-based Molycorp is on the verge of mounting full-scale mining operations at its California Mountain Pass project. Within a year, the project—a revamped existing mine that's been dormant for years—is forecast to produce ~20,000 tons per year (tpy) of rare earth oxides—more than twice the level of all current non-Chinese production combined (which currently accounts for just 3%–4% of global supply).
In Australia, Lynas Corp.'s Mt. Weld project is also expected to start in 2011 and build up to planned output of ~11,000 tpy by 2012.
In two years, Mountain Pass and Mt. Weld could approach 25% of China's current REE output or an estimated 21% of expanded Chinese output.
Canada could enter the ranks of REE producers by 2015, when Avalon Rare Metals (TSX:AVL; OTCQX:AVARF) may have its Nechalacho project (formerly known as Thor Lake) in production.
But Western producers have a long way to go to match Chinese output. China's 2009 REE production is estimated at 120,000 tons (120 Kt.), of which about half is a coproduct of iron mining at a single operation in Inner Mongolia. By 2012, Chinese REE output is expected to increase more than 20% to about 145 Kt. And by 2014, Chinese output is forecast to grow another 14% to 165 Kt., while the rest of the world will produce upward of 38 Kt.—a fourfold increase from 2009 levels.