Canadian consortium plans to become rare earth king

Being in the right place at the right time is the aim of every mineral exploration company with a view to earning a handsome return on its investment dollars.

But for a consortium of Canadian companies which is currently exploring southern Greenland for the rare earths used to produce superconductors, a major discovery could allow it to corner what could become an extremely lucrative market.

In securing the exploration permits covering 600,000 acres including five alkaline intrusive complexes known for lanthanide enrichment, Highwood Resources of Vancouver, Aber Resources of Calgary and Platinova Resources, a private company in Toronto, consider themselves five years ahead of the competition.

Since scientists agree that superconductors will change almost all aspects of human life, what was considered a major coup (the Canadian consortium is the first to win exploration rights in this known rare earths area) could later become a financial coup de grace.

Back in 1986, ibm announced that it had found a way to send 1,000 times the electric current carried by a typical household wire through newly discovered superconductor materials.

These so-called superconductors are a ceramic compound (consisting of yttrium, barium and copper oxide) which can conduct electricity at -183 degrees C with no power losses to resistance. Since the ibm discovery, scientists around the world have been scrambling to produce the first functional room- temperature conductors.

If the consortium’s eventual production timing coincides with a major scientific breakthough, the rewards could be enormous.

As reported (N.M., Mar 10/87) a 1980 survey of southern Greenland led to the identification of a large tantalum niobium occurrence.

A conservative estimate of reserves in this area was estimated at 100 million tons grading a minium of 0.5% tantalum oxide and 0.3% niobium oxide. Grades were reported to range up to 6% niobium and 1% tantalum in places within a 100-m-wide zone striking for 1 km.

“With a large deposit in hand we could be in a position to control production and demand,” said Highwood’s exploration vice-president, David Trueman.

However, the Greenland drilling results won’t be available until September and scientists caution that it could take 20 years before the full potential of the ibm discovery is realized.

Meanwhile, world consumption of yttrium (a byproduct of the separation of rare earths from monazite and bastnasite) has been growing by 10%-17% annually as the Japanese stockpile against rising prices. But Trueman anticipates an explosive growth rate spurred on by demand for stabilized ceram ics in the automotive industry and superconductors.

In December, 1986, yttrium oxide at 99.9% purity was selling at $118(US) per kg while yttrium metal was priced at $510 per kg.

So-called three wavelength fluorescent lights are currently the world’s largest ceramic consumer but superconductors could also be used to replace wires between transistors or chips. Conceivably this could increase computing speed while reducing the amount of power that computers dissipate in heat. Levitated trains, which run suspended on magnetic fields could also move from prototype stage into commercial use.

“Between the two, ceramics and superconductors could stress the entire rare earths business,” said Mr Trueman. Reserves 47 million tonnes

According to mineral industry surveys released by the U.S. Bureau of Mines, world rare earth reserves currently stand at 47 million tonnes. China is potentially the world’s leading producer with reserves of 36 million tonnes, while the U.S. has 6.5 million tonnes and India 1.9 million. Canada ranks well behind with reserves of 200,000 tonnes.

Last year, rare earth ore minerals were mined by Molycorp Inc. and Associated Minerals, the United States’ two largest producers. Using surface techniques, Molycorp produced 13,428 tonnes of bastnasite from its California mine. An undisclosed amount of monazite was also mined in Florida by Associated Minerals from a placer deposit.

In Canada, Denison Mines (in a joint venture with Unocal Canada, Molycorp Inc., Shin-Etsu Chemical Co. and Mitsui and Co.) is producing yttrium oxide concentrate as a byproduct of uranium from a new recovery plant at its Elliot Lake Ont., mine. While the plant is designed to produce 150 tonnes a year and has been operating for nine months (enough to supply 35% of the Western world’s requirements), Mr Trueman believes the Greenland area has much greater potential. In the vanguard

“We consider ourselves to be in the vanguard of the rare earths business and our long-term objective is to be number one,” he said.

His lofty ambitions will be assisted considerably by the location of the Greenland deposits. The area to be worked is a 600,000- acre site situated within the Gardar geological province at the southern tip of Greenland. It is easily accessible by ship year-round and is served by an international airport.

“A well-aimed stick of dynamite would blow the whole deposit into the hold of a freighter,” said Mr Trueman.

“Most deposits produce only one metal, but since the Greenland deposit has a number of metals including tantalum-niobium mineralization in the same deposit, we can look forward to a much more stable cash flow. The peaks and troughs in demand for one metal will be softened by demand for another.”

Also valuable is Highwood’s extensive experience in yttrium and other lanthanides through its existing property in the Thor Lake area of the Northwest Territories. Platinova brings to the venture, the experience of President Robert Gannicott (who worked in Greenland for eight years). The venture is owned 30% by Highwood, 30% by Aber and 40% by Platinova.

Platinova is a private mineral exploration company with interests in platinum, gold and industrial metals. It was recently acquired by Black Hawk Mining as part of the latter’s reorganization plans. Aber Resources meanwhile is involved in a number of joint venture projects including a 39% interest in the Contwoyto Syndicate, owners of gold properties in the Northwest Territories.

“We look at Greenland as a way to flesh out our product capabilities.” said Mr Trueman.

During the rest of l987, the consortium will be prospecting, geochemical sampling, trenching and diamond drilling in the area. Mr Trueman predicts preliminary metallurgical studies will cost in the region of $500,000.

With a production target of 300 tons per year, Highwood is currently looking at possible refining sites. Alberta, the Northwest Territories and Nevada are among the leading contenders.