LYNAS and Blue Line have signed a memorandum of understanding (MoU) for a joint venture (JV) to develop rare earths separation capacity in the US. This is amidst trade tensions between the US and China, the world’s largest producer of rare earths.
Rare earth elements, or rare earths, are a group of 17 elements which occur in rich deposits in limited areas. They are essential inputs for cutting edge and clean technologies including catalytic converters, batteries, and electronics.
The elements frequently occur together in compounds, but they need to be separated and highly purified to be useful. The US has lacked rare earths separation capacity for several years and the JV between rare earths producer Lynas and downstream processor Blue Line aims to fill a key gap in the US supply chain.
Currently, China has a near monopoly on mining, processing, and supply of rare earths. According to the US Geological Survey (USGS), China produced about 84% of the world’s rare earths, between 2011 and 2017. The agency added that during the same period the US only produced the elements between 2012 and 2015, providing about 4% of the world’s rare earths.
The US relies greatly on Chinese import of rare earths. According to a 2019 minerals commodity summary, 80% of the US’ rare earth elements and compounds were imported from China. This supply relationship is currently being threatened by trade conflict between the two countries.
The proposed JV would provide the only large-scale production of separated medium and heavy rare earths outside of China and a US-based source would help to ensure that US companies have a continued supply of rare earth products. Rare earths are classified based on atomic numbers, going from light (lower atomic numbers) to heavy (higher atomic numbers).
Lynas and Blue Line plan to work together exclusively over the next year on the proposed development of a rare earths separation facility at a Blue Line site in Texas, US. The JV will initially focus on the separation of heavy rare earths but may also include work on light rare earths separation.
Lynas is the largest rare earths producer outside of China. It will have majority ownership of the JV.
Amanda Lacaze, CEO and Managing Director of Lynas, said: “This is an exciting opportunity to develop local separation capacity for our customers in the United States and to close a critical supply chain gap for United States manufacturers.”
Jon Blumenthal, President and CEO of Blue Line, said: “We are looking forward to working with Lynas to provide a secure source of rare earth materials to both US and international markets and using our technical expertise to produce raw materials for uses in green and other high-tech industries.”
Concerns have been raised about the environmental impact of rare earth extraction methods used in China. A 2012 article by The Guardian discussed the poisoning effects of processing on local villages.
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