Resource World Magazine

66 www.resourceworld.com F E B R U A R Y / M A R C H 2 0 1 5 ALTERNATIVE E n E R g Y R E v i E w Developments in Alternative Energy by Jane Bratun rare earth mining poiseD for a rebounD Toronto-based exploration company, avalon rare Metals Inc. [AVL-TSX, NYSE MKT] is developing an advanced heavy rare earth mining project in Canada's Northwest Territories, 100 km southeast of Yellowknife – the 100%-owned flagship Nechalacho Project at Thor Lake. The Nechalacho rare earths (when in production) will be used to make magnets for wind turbines. A 2 megawatt wind turbine contains about 800 pounds of neodymium and 130 pounds of dys- prosium. Avalon's Nechalacho rare earth project will contain these rare earths as well as other rare earths and rare metals such as nio- bium, tantalum, and zirconium. China is the source of the majority of the world's supply of heavy rare earths, and new supply sources are needed to meet growing demand from new technology. The term rare earth elements (REE) describes the 15 lanthanide elements or metals, usually grouped with yttrium and scandium, all of which display similar physical and chemical properties. REEs are used in many applications, including high strength per- manent magnets (used in electric vehicles, industrial motors, air conditioners, speakers, wind and tidal turbine generators), LED lights, colour monitors, medical equipment, and catalysts. According to Donald Bubar, Avalon's President and CEO, when discussing Nechalacho, a look at the outlook for rare earth proj- ects in general is helpful. He says that despite the fundamental need for rare earth materials, rare earth mining investors outside of China have hit the pause button, and the Nechalacho Project is waiting on funding to begin its building phase. He says rare earth projects were red hot a few years ago because of perceived shortages when China began to impose export quotas but have fallen out of favour with investors when expectations on return on investment were not met. Another major hurdle is the need for a relatively large capital investment with capital cost estimates typically in excess of a billion dollars. Also of great concern is the toxic mess left behind by poor min- ing practice, in China, over the course of the last 50 years. This has created a negative image of rare earth mining in general, although modern mining practice would mitigate most of the unwanted environmental impacts. Because of these concerns, Bubar states, rare earth mining companies are finding it hard to attract investors. But, says Bubar, the fundamental need for new rare earth pro- duction outside China still exists. He says CleanTech industries still needs secure supplies of rare earths for alternative energy solutions, such as electric cars and wind turbines. And, compa- nies are looking for new sources of these rare earths because China still produces most of the world's rare earths and does not have a good track record with regard to being a reliable supplier of critical raw materials or in environmental stewardship. Being in Canada, Avalon's proposed mine will comply with some of the world's high- est environmental standards. Bubar stresses that Avalon is seeking to minimize its mining footprint and maximize benefits to the community in which it works. However, refining and separating the various rare earths is a technical challenge which Avalon has resolved by partnering with Solvay [SOLB-Euronext Brussels, Paris], a Belgian chemical company with an excellent reputation among industrial consum- ers of specialty chemical products. solvay will provide the technical support to optimize the design, engineering, and commissioning of Avalon's hydromet- allurgical processing plant. Avalon plans to ship a concentrate containing 98.5% rare earth oxide to La Rochelle, France, where Solvay will produce separated oxides of praseodymium, neodym- ium, europium, gadolinium, terbium, dysprosium, lutetium and yttrium ranging in purity from 99.5% to 99.99%. With environmental standards in the forefront, Avalon pub- lishes annual sustainability reports in accordance to Global Left to right, Bill Mercer, VP Exploration, David Connelly, Strategic Advisor and previous board member, and Donald Bubar, President and CEO of Avalon Rare Metals, examine diamond drill core at the Nechalacho rare earths project in the Northwest Territories. Photo courtesy Avalon Rare Metals Inc.

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