Tierras Raras: Minerales Críticos del Futuro - Jueves Minero IIMP

Introduction to the Mining Conference

Welcome and Overview

• The Institute of Mining Engineers welcomes attendees to a new edition of their traditional mining Thursday event, focusing on critical minerals for the future.

• José Augusto Palma, Executive Vice President of Aclara Resources, will provide insights into critical minerals essential for upcoming decades.

• Rare earth elements (REEs), comprising 17 essential elements, are crucial for advanced technologies in renewable energy, defense, and automation.

Importance of Rare Earth Elements in Peru

• Although exploration of REEs in Peru is still developing, significant deposits exist in regions like Puno and the Amazon rainforest.

• The panel includes experts from various fields who will enrich the discussion with their knowledge and experiences.

Understanding Rare Earth Elements

Basic Explanation of REEs

• José Augusto Palma begins his presentation by explaining that rare earth elements are often misunderstood; they consist mainly of lanthanides plus yttrium and scandium.

• These elements share similar properties and are typically found together in nature. They can be categorized into heavy (e.g., dysprosium, terbium) and light (e.g., neodymium, praseodymium) rare earth elements.

Economic Viability of REE Deposits

• Despite being common in the Earth's crust, economically viable deposits are rare due to specific concentration requirements.

• The term "rare" refers more to their economic availability rather than their abundance.

Sources and Formation Conditions for REEs

Types of REE Deposits

• There are four main sources:

• Rock-type deposits (e.g., Mountain Pass mine in the USA).

• Regolith deposits formed from weathered granites leading to ionic clays.

• Monazite deposits containing phosphate quartz.

• Byproduct occurrences where REEs appear as secondary products.

Factors Influencing Ionic Clay Deposits

• Three key factors determine the formation of ionic clay deposits:

• Presence of alkaline rocks.

• Appropriate climatic conditions facilitating weathering over millions of years.

The Evolution of Ionic Clays

Stages of Formation

• The evolution of ionic clays begins with rocky formations in areas where erosion exceeds weathering, allowing rocks to erode into clay.

• In the second stage, these clays deposit on rocky surfaces where weathering is greater than erosion, leading to a transition from rock to regolith and then saprolite.

• Eventually, the rock transforms into clay, which contains significant deposits of rare earth elements (REE), crucial for various applications.

Characteristics of Clay Deposits

• Ionic clay deposits are typically fragmented and not uniform, making them challenging to locate and economically viable ones even harder to find; they usually reach depths of about 30 meters.

• A specific example is a fragmented deposit in Chile compared to Brazil's more extensive and favorable conditions for rare earth element accumulation due to its flat topography.

Applications of Rare Earth Elements

Everyday Uses

• Rare earth elements are integral in everyday technology such as smartphones, electric bulbs, flat-screen TVs, digital camera lenses, and computer hard drives.

• Some REEs like cerium and lanthanum are used in steel production for impurity removal.

Importance in Electromobility

• Permanent magnets made from rare earth elements are essential for electric vehicles (EVs), electric turbines, and overall electromobility technologies.

• The growing focus on climate change has increased demand for EV components that rely on these materials.

Future Demand for Electric Vehicles

Projections

• Demand for electric vehicles is projected to double over the next decade; this includes public transport systems like trains and buses as well as future innovations like drones and ships requiring permanent magnets.

Magnet Composition

• Permanent magnets consist primarily of boron (70%), light rare earth elements (30%), and heavy rare earth elements (10%).

Performance Requirements

• Light rare earth elements allow operation under normal temperatures while heavy ones maintain magnet strength at high temperatures—critical for automotive applications.

Technological Advancements with Rare Earth Elements

Case Study: Tesla Cybertruck

• The Tesla Cybertruck showcases how permanent magnets enable it to outperform traditional sports cars like Porsche in speed tests due to advanced motor efficiency.

Efficiency Benefits

Understanding the Global Market for Rare Earth Elements

Overview of Rare Earth Element Deposits

• The discussion begins with a comparison of companies possessing deposits of light rare earth elements (REEs) on the left and those with heavy REEs outside China on the right.

• Both types of companies are not mutually exclusive; they serve different market needs, as demand is expected to exceed production in the short to medium term.

Demand and Production Insights

• Heavy rare earth elements are currently considered more strategic due to their scarcity outside China, compared to light rare earth elements.

• In 2023, global production of heavy REEs like dysprosium and terbium was approximately 3,410 tons annually, indicating a specialized but essential market.

• China produced nearly 3,000 tons alone, controlling about 90% of the global market for heavy REEs.

Future Projections and Gaps in Supply

• Projections suggest that global production will need to double by 2030 to meet rising demand, highlighting a significant supply gap.

• Two projects in Chile (Penco and Karina) are expected to produce only 24–41 tons combined, emphasizing the urgent need for new sources.

Historical Context of China's Dominance

• A historical perspective reveals that in 1987, Chinese leader Deng Xiaoping predicted China's potential dominance in REEs compared to oil-rich regions.

• By 2008, China's share rose dramatically from 38% in 1993 to over 90%, showcasing its control over global production.

Recent Trends and Market Control

• Recently, China has expanded its mining operations into Southeast Asian countries while maintaining strict quotas on domestic production.

• From 2014 onwards, China has regulated its output of heavy REEs like dysprosium and terbium consistently.

Criticality of Rare Earth Elements

• The U.S. Department of Energy ranks critical minerals based on their importance and supply risk; heavy REEs rank high due to their significance for energy technologies.

• Despite high demand exceeding supply expectations leading up to price increases in previous years, recent trends show prices have stabilized or decreased due to better internal controls within China.

Understanding the Rare Earth Market and Global Responses

Misconceptions about the Rare Earth Market

• The term "market" is misused as there are no reliable data or verifiable contracts regarding production. There is a lack of public transactions and product traceability.

• Verification of compliance with environmental, social, and governance standards is absent, along with a geographically independent source of rare earth materials. Most sources are controlled by China or neighboring countries like Myanmar, Laos, and Thailand.

Initiatives to Establish a True Market

• Companies like Aclara are working on projects aimed at creating a market for rare earth elements that includes traceability and adherence to environmental standards. These elements will be increasingly necessary in the future.

Global Actions in Response to China's Control

• The U.S., EU, and other nations have begun addressing the issue of China's dominance in the rare earth market through various legislative measures initiated over recent years. This includes laws related to energy, infrastructure, and inflation reduction.

• In 2020, President Biden issued Executive Order 14017 mandating all executive agencies to ensure resilient supply chains for critical minerals essential for national security and economic prosperity.

U.S. Government Actions on Mineral Security

• In 2023, a uniform list of critical minerals was published by the Department of Energy and Interior; being included on this list subjects companies to additional programs from various U.S. agencies.

• The formation of the Mineral Security Partnership involves 14 countries led by the U.S., aiming to promote investment in industries related to critical minerals while ensuring stable supply sources independent from China. New tariffs were also imposed on electric vehicles and certain minerals from China as part of this strategy.

European Union's Strategic Moves

• The EU has launched initiatives such as the Green Pact aiming for carbon neutrality by 2050; it plans to ban sales of CO2-emitting cars starting in 2035 which will increase demand for lithium and rare earth elements significantly.

Impact of Tariffs on Chinese Products and Brazil's Mining Strategy

Overview of Brazil's Position in the Global Mining Market

• Brazil has followed the U.S. lead by imposing tariffs on various Chinese products, including rare earth elements.

• Unlike the U.S. and Europe, Brazil is a mining country actively positioning itself as a strategic hub for rare earth minerals and critical resources globally.

National Policies and Investments in Mining

• Brazil has established a national mining policy aimed at 2030, with plans extending to 2050, which could serve as a model for Peru.

• The Brazilian government has created a $100 million fund through its National Development Bank (BNDES) to invest in critical mineral projects from exploration to development.

State-Level Initiatives in Minas Gerais

• The state of Minas Gerais invested public funds to build a semi-industrial plant capable of separating rare earth elements and producing alloys and magnets.

• Local entrepreneurs have taken over the plant for research purposes, aiming to benefit the entire industry rather than focusing solely on profit.

Collaboration Between Government and Private Sector

• States in Brazil are competing positively for mining investments by signing memorandums of understanding with interested companies.

• These agreements facilitate collaboration where states commit to efficiently evaluate project permits while companies agree to invest in local capacity building.

Lessons for Peru from Brazilian Practices

• The speaker emphasizes that both public and private sectors in Peru can learn from Brazilian practices regarding investment facilitation and collaboration.

Introduction to Clara Company: A New Player in Rare Earth Production

Company Background and Strategic Partnerships

• Clara is a relatively young company formed in 2021, backed by two major groups: Hil Group and Cap Group from Chile.

Production Goals and Technology Innovations

• Clara aims to produce significant quantities of heavy rare earth elements like dysprosium and terbium, contributing approximately 1% of China's official production by 2023.

Sustainable Extraction Methods

• The company employs sustainable extraction techniques that differ significantly from traditional mining methods; it does not require explosives or extensive energy consumption.

Environmental Considerations

Overview of Rare Earth Elements Extraction Process

Internal Development and Validation

• The extraction process was developed internally and validated by the University of Toronto, resulting in two patents across four countries.

• The process involves low-depth deposits, making exploitation relatively straightforward; excavators load clay into trucks for transport to the processing plant.

Processing Steps

• At the plant, clay undergoes washing and filtering to remove large particles, ensuring a pure clay material.

• An ion exchange process uses electric currents to separate rare earth elements from the clay into an aqueous solution, followed by pH adjustment using ammonium sulfate for precipitation.

Environmental Sustainability

• The treated water is recirculated, and since the clays retain their physical and chemical properties without grinding or milling, they can be returned to their original location for revegetation.

• Pilot projects in Chile have successfully grown various trees and vegetables on treated clays, demonstrating a sustainable approach with minimal environmental impact.

Pilot Plant Success

• A pilot plant in Concepción, Chile operated for six months producing rare earth concentrates with approximately 90% purity; this investment refined processes while minimizing environmental harm.

• The success of this clean process contrasts sharply with negative narratives about rare earth production in China.

Expansion Plans

• Equipment from the Chilean pilot has been relocated to Brazil for a similar project aimed at producing concentrates from Karina clays.

• Ongoing community engagement focuses on educating locals about rare earth elements' utility and operational processes as part of environmental certification efforts.

Project Details

• Two main projects are highlighted: Penco (14 years lifespan requiring $130 million investment) and Karina (22 years lifespan needing $600 million), both advancing through feasibility stages towards construction pending environmental permits.

Strategic Goals

• Unlike China’s control over primary production and value chains, there is a strategic aim to integrate vertically beyond initial extraction phases into industrial operations.

Separation Processes

• Efforts are underway to develop separation processes that isolate valuable rare earth elements from concentrates through additional chemical methods.

Conceptual Engineering and Rare Earth Elements

Overview of Current Projects

• The team is working on conceptual engineering for a separation plant, likely to be located in Brazil, the United States, or the European Union.

• Collaboration with Chilean partners, particularly CAP, which is the fifth-largest iron producer globally. CAP has halted operations at Huachipato due to Chinese dumping issues.

• Engaging with a German company (VAC) that specializes in permanent magnets and is constructing a plant in the U.S., aiming to understand production technology for these critical components.

Vertical Integration Strategy

• The goal is to achieve vertical integration from mining to final product delivery, ensuring a comprehensive supply chain solution.

• Emphasis on becoming a reliable long-term supplier while adhering to environmental and governance standards for sustainable energy transition.

Panel Discussion on Geological Insights

Introduction of Panelists

• Welcoming panelists including Alonso Marcha (Inemed), Miguel Ampudia (Proactivo), Isaac Buste (Minsur), and César Manyari (Texu).

Geology and Mineral Potential in Peru

• Alonso discusses Peru's traditional mining focus on copper and lead but highlights potential for rare earth elements in the Eastern Cordillera.

• Introduction of new prospecting approaches by Inemed that differ from traditional methods; focusing on understanding deposit formation through deductive reasoning.

Critical Processes for Mineral Formation

• Identification of five critical processes necessary for mineral deposit formation: lithospheric fusion generating magmas, favorable architecture for magma emplacement, and geochemical evidence from rock samples.

• Preservation conditions are crucial; rapid exhumation rates in the Andes hinder preservation of potential deposits like ionic clays.

Challenges and Opportunities

• Lack of known ionic clay deposits in Peru despite some promising anomalies; ongoing efforts to map areas with potential mineralization.

China's Dominance in Rare Earth Elements

Overview of Global Rare Earth Production

• China leads the world in rare earth element production, accounting for approximately 30% of the total 130 million tons.

• Following China, Vietnam and Brazil are significant players in the market. Projections indicate a compound annual growth rate of 8.3%, potentially reaching $15 billion by 2030.

Strategic Importance of Rare Earth Elements

• The concentration of rare earth production in China raises national security concerns, as these elements are crucial not only for technology but also for energy transition and military applications.

• In response to geopolitical tensions, particularly with the U.S., China has restricted exports and established a state entity to oversee exploration and processing.

Opportunities in South America

• The U.S. is exploring alternative sources for rare earth elements due to reliance on Chinese supply chains, looking towards regions like Latin America.

• Peru has potential reserves; notable projects include Pampa de Pongo (iron with rare earth elements) and Falani (lithium with additional mineral reserves).

Market Dynamics and Challenges

Opacity of the Rare Earth Market

• The rare earth market is characterized by a lack of reliable data; estimates range from $4 billion to $6 billion, indicating its relatively small size compared to other minerals like gold.

Technical Challenges in Processing

• China's control over separation technologies poses challenges due to similar chemical properties among rare earth elements, complicating extraction processes.

• Environmental considerations play a significant role; Chinese methods involve using acid leaching techniques that lower costs but raise ecological concerns.

Emerging Applications and Future Demand

• There is growing interest in niche markets such as military applications involving high-energy infrared lasers that require specific rare earth elements like Thulium.

• While demand may be limited to grams or fractions per application, these niches could significantly impact geological potential assessments in countries like Peru.

Conclusion on Resource Potential

Discussion on Rare Earth Elements and Mining in Peru

Introduction to the Panel Discussion

• The panel discussion begins with Isaac summarizing previous points, leading to César Manyari's introduction as a new speaker.

César Manyari's Perspective on Rare Earth Elements

• César Manyari introduces himself as a professor at the Instituto Tecnológico Superior de Tup, emphasizing the need for innovation in rare earth element exploration.

• He notes that current studies primarily focus on known metals like gold and base metals, indicating a gap in research regarding rare earth elements despite their presence in Peru.

Historical Context of Rare Earth Element Extraction

• Manyari highlights that Peru has historically extracted minerals containing rare earth elements without awareness, citing past production of indium from La Oroya over 30 years ago.

• He mentions geological formations where these elements are found, such as igneous rocks and IOCG deposits, particularly in southern Peru.

Potential for Development and Environmental Concerns

• There is significant potential for developing critical minerals; however, concerns about environmental impacts must be addressed alongside technological advancements.

• The discussion includes the importance of establishing policies that support sustainable mining practices while fostering economic growth through mineral exports.

Critical Minerals and Legislative Needs

• Alonso adds that while Peru may not be competitive in rare earth elements compared to other countries, it possesses valuable subproducts like cobalt and germanium which are essential for energy transition technologies.

• He stresses the necessity of updating legislation to reflect current demands for critical minerals and ensuring proper reporting mechanisms are established within mining regulations.

Conclusion: Future Directions for Mining Policy

Metalogenetic Evolution and Resource Management in Peru

Overview of Mineral Potential

• The San Rafael tin deposit is part of a broader metallogenic belt extending to Bolivia, highlighting Peru's mineral potential.

• New maps are being developed to include various commodities that traditional maps overlook, aiding in understanding Peru's metalogenetic evolution.

Strategic Positioning Against Global Competitors

• While competing with countries like China and Brazil is challenging, there are opportunities for Peru as a polymetallic nation to leverage its resources effectively.

• Germany views Peru as a strategic ally for rare earth elements, aiming to double its renewable energy capacity.

Institutional Roles in Research and Legislation

• Institutions must promote academic research to provide theoretical and technical insights necessary for legislative discussions on mining topics.

• Continued advocacy from the mining sector is essential as legislation around lithium and uranium is still developing.

Importance of Copper in Energy Transition

• Copper remains crucial for energy transition strategies; however, it has been somewhat neglected despite its abundance in Peru.

• The focus on niche metals may distract from the significant potential copper offers within national development plans.

Challenges in Metal Recovery

• Metals like tellurium have small markets but are vital for technology production; understanding their recovery processes is critical.

• Selenium recovery from concentrates poses challenges due to market dynamics where producers often do not receive fair compensation for these by-products.

Opportunities for Value Recovery

• Producers need strategies to recover value from lesser-known metals which could increase national revenue through taxes and development funding.

Discussion on Rare Earth Metals and Mining in Peru

Challenges in Selling Rare Metals

• The speaker discusses the complexities of selling niche metals, emphasizing that there are dominant players in the market which complicate sales efforts.

Critical Minerals and Exploration Efforts

• A brief mention of critical minerals, particularly rare earth elements (REE), raises questions about existing mining claims for these resources in Peru.

• Historical context is provided, noting that studies on REE began around 2011, with some companies filing claims by 2015-2017; however, no significant developments have occurred since then.

Importance of Copper as an Energy Transition Mineral

• The speaker highlights copper (specifically chalcopyrite) as a crucial mineral for energy transition, asserting its abundance across Peru.

• There are multiple projects in Cajamarca focused on copper extraction, indicating a strong potential for development in this area.

Need for Technological Support and Research

• Emphasizes the necessity of technological advancements to explore REE further. While Peru lacks certain carbonates found globally, it has alkaline igneous rocks suitable for exploration.

• Identifies several geological locations within Peru where further research and exploration could yield valuable insights into REE potential.

Innovation and Collaboration Opportunities

• The speaker advocates for increased research and innovation partnerships between educational institutions and industry to develop critical metals effectively.

Interest from the Audience

• Acknowledges heightened interest from participants regarding questions about rare earth elements' potential reserves in Peru.

Current State of Rare Earth Elements Inventory

• Discusses the lack of individual inventory data on rare earth elements; they typically occur together due to similar ionic radii and electronic charges.

Governmental Role in Research Incentives

• Reflecting on Brazil's approach, there's a call for government support to incentivize research processes related to critical materials within Peru.

Collaborative Efforts Needed Across Sectors

The Role of the Private Sector in Research and Development

Importance of Private Sector Leadership

• The private sector is encouraged to take a leadership role in fostering research and development, particularly in collaboration with academic institutions.

• There is significant potential for investment from the private sector to enhance the academic level of students, emphasizing the need for partnerships.

Exploration of Marine Resources

• Discussion on marine resources highlights the potential for rare earth elements and other minerals, although specific studies on rare earth elements are lacking.

• Interest is sparked regarding manganese nodules found in marine environments, which may contain valuable elements like selenium.

Academic and Business Collaboration

• A call to action for academia and businesses to collaborate on new lines of research was made, indicating a gap that needs addressing.

• The geopolitical implications surrounding rare earth elements were discussed, noting ongoing efforts by countries like the U.S. and EU to break existing monopolies.

Acknowledgments and Future Opportunities

Panelist Contributions

• Gratitude was expressed towards panelists who provided technical insights that complemented the speaker's legal perspective on rare earth mining.

Student Engagement Initiatives

• An invitation was extended to students from various institutions to participate in a competition offering prizes related to mining presentations.

• Details about participating in the competition included creating video summaries of mining presentations shared on social media platforms.

Conclusion of Event