Ucore's Trump card
Steep taxes on Chinese imports may bolster need for Strategic Metals Complex
Last updated 1/24/2018 at 6:46pm
The mining company that’s been working Southeast Alaska’s rare earths project is enthusiastic about President-elect Donald Trump’s support for an independent U.S. strategic metals industry, which Ucore Rare Metals’ top executive says will favorably impact its plans for a domestic Strategic Metals Complex.
According to Jim McKenzie, president and CEO of Ucore, China controls more than 90 percent of the global mining and production of rare earths ore and exhibits “near complete control over each subsequent stage of the supply chain.”
In a Dec. 13 statement, McKenzie said, “Dependence on foreign sources of rare earths leaves the Department of Defense vulnerable to supply interruptions and without a fallback for critical materials production should conflicts arise between the super powers.”
Trump, he said, has been “outspoken through his campaign regarding the protection of American workers and industry from damaging and unfair foreign trade practices. His proposed policies coincide well with our vision of creating a self-contained strategic metals hub on U.S. soil, independent of international political disruption. The movement toward U.S. self-reliance, especially in areas of the highest military and industrial vulnerability, speaks well to our plan to develop our recently announced Strategic Metals Complex.”
Evolution of a Strategic Metals Complex
In its quest to discover a more economic and environmentally sound way to separate the 16 rare earth elements found at its Bokan Mountain project on Prince of Wales Island near Ketchikan, Ucore has helped pioneer a new technology that could transform the way not only rare earths but an entire suite of strategic metals are processed in the United States and around the globe.
As reported in the Nov. 20 edition of North of 60 Mining News, over the past two years, the mineral-explorer-turned innovator has taken the unproven concept of using molecular recognition technology to separate the notoriously tightly interlocked rare earth elements, or REEs, from the bench of a lab to a successful pilot run. Now the company plans to cash in on this revolutionary technology by building what it calls a strategic metals complex, or SMC, an industrial-scale version of a recently verified REE separation pilot plant called SuperLig-One.
Instead of putting a lot of effort into modernizing inefficient and environmentally invasive legacy REE separation technologies such as solvent extraction or ion exchange, Ucore set out to find a whole new way of extracting the dysprosium, terbium, europium and other important REEs found at Bokan.
By 2014, this quest for a cutting edge REE separation technology Ucore turned to IBC Advanced Technologies and its proprietary molecular recognition technology, or MRT.
In the MRT process SuperLig resins are engineered to grab ions based on a number of traits such as size, chemistry and geometry. These resins are loaded into a column and latch onto the targeted material suspended in a solution that is pumped through the column. Simply rinsing the resin with a mildly acidic solution releases a nearly pure version of the material the resin is engineered to bind to.
This technology, which has been around for about 30 years, has already been proven in mining, such as platinum group metals refining and removing bismuth impurities from copper.
Before Ucore and IBC, no one had ever tried to utilize MRT to separate the hard to break apart REEs.
In less than two years, the two companies have proven that MRT can separate the REEs into nearly pure individual elements and that the innovative technology can be very efficient when scaled up to the commercial level.
IBC developed resins for Ucore that specifically bind with ions associated with rare earths.
Demonstrating that the technology works at the lab level, Ucore and IBC developed SuperLig-One, a pilot plant that has successfully separated the most valuable and critical heavy rare earth elements contained in a solution derived from Bokan Mountain.
After separating the entire REE suite as a group, scandium, a valuable REE used in aluminum alloys for the aerospace sector, was isolated from the other rare earths.
Once scandium was skimmed off, the highly coveted and more expensive heavy rare earths were separated from the more common and less valuable light REEs.
By August, the SuperLig-One plant had achieved the ultimate goal for REE separation, the isolation of dysprosium.
“The recovery of near-quantitative purities of dysprosium at industrial scale, solely using American feedstock, and without the use of chemically-intensive SX (solvent extraction) technologies, are significant firsts for the industry,” McKenzie said.
According to a 2011 study by the U.S. Department of Energy, dysprosium is deemed the most critical of all elements in terms of its importance to clean energy and supply risk.
“This metal is deployed extensively in United States military, high technology and clean energy sectors, with 100 percent of the product currently originating from China,” Ucore’s top executive said.
In fact, four rare earths – dysprosium, europium, terbium and yttrium – topped the list of DOE’s five most critical and supply risky elements.
The remaining heavy rare earths, minus the dysprosium and scandium, and the light REE solution are being retained for future work.
Basically, none of the rare earths were lost.
These results were confirmed by an independent third-party laboratory, paving the way for the next stage of evolution for SuperLig, which will include the scoping of a full-scale production plant to process high demand specialty metals, possibly in the Houston area.
The Halifax, Nova Scotia-based Ucore envisions developing hubs at strategic ocean-accessible locations around the globe by 2020. The company’s Bokan Mountain rare earth project in Alaska is one such location. Germany, India and Angola are international destinations being considered under the company’s aggressive strategic positioning plan.
Trump to levy tariffs against unfair Chinese imports
According to Trump, the trade disparity that exists between the U.S. and China has undercut U.S. exports and constrained American manufacturing. In order to ensure fair and transparent trade, the president-elect has proposed plans to levy up to 45 percent tariffs against unfair Chinese imports.
If enacted, a large tariff will have significant implications for the American rare earths market leading to increased urgency of investment in U.S. strategic materials, Ucore said in its mid-December statement. A tariff on strategic materials would drive downstream manufacturing, stimulating domestic job creation, and secure the supply chain for materials crucial to the proper function of numerous defense end-items, thus alleviating a dangerous risk currently posed to U.S. national security.
The Department of Defense has indicated that the lack of substitutability for rare earths in military applications will necessitate their increasing use on a go forward basis. Ucore officials and Trump believe that a secure supply chain of rare earths is an essential component of a robust national security policy, given the increasing reliance on materials such as dysprosium, terbium, praseodymium and neodymium for the proper function of defense end-items such as precision-guided munitions, lasers, satellite communications, and military equipment and vehicles.
The president-elect’s proposed trade policies speak well to innovation and a transition to more environmentally friendly technologies for the separation of rare earths, Ucore said.
China relies on antiquated separation and extraction techniques with low selectivity for individual rare earths and necessitates the use of many separation stages and corrosive chemicals resulting in the generation of vast amounts of highly toxic, organic waste. These processes have enabled the Asian country to artificially suppress rare earth prices and force competition from the marketplace at the cost of extensive environmental degradation and human health and safety. In turn, processes such as solvent extraction are expensive, both in terms of environmental cost and capital outlay, and highly problematic in terms of permitting in U.S. jurisdictions.
Much of the Chinese rare earths market remains opaque, leaving it vulnerable to an influx of low-cost black market materials that drive down prices and threaten to disrupt American access to strategic materials.
Trump’s proposed tariff on China would hold the country accountable, ensuring internationally recognized regulations are adhered to, and will go a long way toward enhancing America's leverage in international negotiations pertaining to security and defense, Ucore said.
"Ucore looks forward to cooperating with the Trump Administration's efforts to return the U.S. strategic materials market to self-sufficiency," Mackenzie said. "What's more, we look forward to continued collaboration with legislators in their efforts to break the United States of critical material dependencies."