Rare Earth Processing

Q&A based on News Release from October 7, 2014 [click here to view]

What did you announce today?

We announced that we are expanding our business model to include the processing monazite, a high grade rare earth bearing mineral, in Elliot Lake, Ontario.

How will this announcement impact your business?

We have long characterized the goal of being early-to-market with critical rare earths outside of China, as a ‘race’. We believe that this expansion of our business plan will help us win that race in Canada, while helping to position Canada as a global leader in this vital industry.

Why have you decided to take this step at this time?

Recent market conditions have not supported the construction of relatively high CAPEX mining and processing projects, such as those proposed by Canada’s aspiring rare earth developers, including Pele. While we remain optimistic that this situation will improve over time, our business plan has evolved naturally in response to the current market reality.

How does this announcement impact your plans for the development of Eco Ridge?

We believe that this expansion of our business plan will help us to win the race to production of critical rare earths in Canada and, ultimately, will support the development of our Eco Ridge Mine as markets improve.

Pele intends to import monazite for processing. Why aren’t you first looking to process rare earth bearing ore and tailings already in Elliot Lake?

In seeking an early-to-market opportunity to produce critical rare earths, we first looked at regional tailings deposits that were previously mined, crushed, and ground during Elliot Lake’s productive years and are located on the surface. While we believe that regional tailings may present an opportunity in time, recent market conditions redirected our focus toward sources containing high-grade rare earths such as in monazite. The very high rare earth grades found in monazite can facilitate substantial production from relatively low tonnage, allowing for relatively lower CAPEX and OPEX than a large-scale mining and processing operation.

Where do you plan to acquire monazite?

We are in discussions with qualified sources of monazite in countries that embrace sustainable mining practices and are allied trading partners with Canada. Our plan is to work with two or three suppliers to diversify sources and improve security of supply.

What products use critical rare earths in the manufacturing process?

Critical rare earth elements are key ingredients in many of today’s high-tech products, from hybrid and electric automobiles to wind mills and high efficiency lighting and smart phones to catalytic converters. Rare earths are also used widely in defence applications.

Your announcement makes reference to establishing a relatively low cost, early-to-market rare earth supply. How will this project stimulate the Canadian economy?

We believe that Canada can be a global leader in the sustainable production of critical rare earths, and not merely concentrates, but separated, high-purity, individual rare earth oxides to be used in value added processing and manufacturing. By expanding our business plan to include monazite processing, our objective is to kick start the supply chain in Elliot Lake and to lever the production of critical rare earths into downstream value added processing and manufacturing, including in Canada.

Why is domestic production of critical rare earths so important?

We’ve been outspoken in our advocacy for the sustainable development of a critical rare earth supply chain in Elliot Lake to support downstream value added manufacturing in Canada. China currently produces about 90-percent of the global supply of light rare earths and over 99-percent of heavy rare earths. China’s dominance in the production of rare earths has helped it to develop clean energy and high-tech value chains. In testimony to the Parliamentary Committee on Natural Resources, Pele President Al Shefsky said, “Access to a reliable rare earth supply chain is essential to Canada’s strategic and economic security. With world-class deposits of its own, Canada is in a unique position to not only produce rare earths, but to create its own rare earth supply chain, thereby creating billions of dollars of economic activity along with thousands of high-paying jobs.”


Environmental & Regulatory

Which rare earths do you expect to produce from monazite processing operations?

Our target rare earths are the ones at highest risk for supply disruption outside of China, especially the important magnet materials, Neodymium, Praseodymium, together with some Dysprosium, Terbium, Europium, Yttrium, which combined, are referred to as the "critical rare earths."

Which rare earths do you expect to produce from monazite processing operations?

Our target rare earths are the ones at highest risk for supply disruption outside of China, especially the important magnet materials, Neodymium, Praseodymium, together with some Dysprosium, Terbium, Europium, Yttrium, which combined, are referred to as the "critical rare earths."

In addition to its rare earth content, monazite contains naturally occurring radioactive materials including thorium. What are the permitting requirements regarding the management of this type of radioactive material?

There are regulations and guidelines relating specifically to Naturally Occurring Radioactive Materials (NORM). We are fortunate to have a stable domestic regulatory environment. This leads to well understood pathways for securing the necessary government approvals to import, transport, and manage NORM. The regulatory process will follow its due course and Pele will comply with all applicable regulations and guidelines.

Your announcement includes quotes from local community leaders, including the local First Nation. How can your announcement impact the local communities?

We have been actively engaging with government, local First Nations, industry leaders in the rare earth supply chain, and academia to advance the sustainable development of Canada’s first critical rare earth supply chain in Elliot Lake. We particularly appreciate the friendly and productive relationships we have built with the Serpent River First Nation and the City of Elliot Lake. We have worked closely and productively with the local communities for almost a decade. We share their interest in ensuring that economic development in the Territory is sustainable and provides benefits to local communities.

How would you characterize your relationship with the provincial and federal governments?

We have a productive relationship with the Ontario government, particularly the Ministry of Northern Development & Mines. We have kept the provincial government apprised of our work to date and in turn the province has helped open doors to potential partners, explained incentive programs at various ministries, and is providing clarity regarding the regulatory requirements. Since our testimony before the House of Commons Standing Committee on Natural Resources earlier this year, we’ve seen an increased interest by the federal government in our project. In particular, we appreciate the metallurgical support being provided by the Federal Government through CanmetMINING.