Experts Forecast Rare Earth Element Revenue from Primary and Secondary Sources, A Pragmatic Tool?

Highlights

• MIT researchers forecast rare earth element revenues from primary and secondary sources, finding electronic waste yields high revenue driven by neodymium.
• A power-law correlation between total rare earth oxide content and value provides a simplified forecasting method for various resource types.
• The study offers insights for government and industry to prioritize rare earth development projects and compare estimated values.

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Ajay Gupta (opens in a new tab), affiliated with the Massachusetts Institute of Technology  (MIT) Materials Research Laboratory (opens in a new tab) and collaborative co-authors recently went on the record to forecast revenues linked to rare earth elements, both derived from primary and secondary sources. While rare earth elements are the main source of revenue among coproducts of most secondary sources, various sources within each category demonstrate variability in contained value.  Scandium drives industrial waste revenue with neodymium powering electronic waste revenue. Contained rare earth value increases as power law of total rare earth oxide content.

A Rare Earth Exchanges summary of this work:

• A dearth of academic literature in this topic—the valuation of novel resources for rare earths from a per ton of course material basis
• Output from this analysis demonstrates a significant  variation in value across source materials for rare earths, driven by scandium and neodymium.
• Rare earths are highest value product (opens in a new tab) in secondary sources; correlation between value and concentration is defined.
• Results provide government and industry with key parameter in prioritizing rare earth development.
• New deposit project owners can use this information to compare estimated value, highlights importance of robust ore grade data.

Published in the peer-reviewed journal Resources, Conservation and Recycling (opens in a new tab), the authors first emphasize the importance of deposit characterization behind the demand for rare earth element demand increase.

So, what are some challenges facing this sector?  According to the authors “variable REE concentrations (e.g., coal ash ranges from 267 to 843 ppm) and price volatility.”

This recently analysis published in August involved an estimate in distributions in the REE value per ton of material, by collecting multiple data points for each type and using mean-reversion price forecasting

Tracking primary ores (e.g., bastnaesite), industrial wastes (e.g., red mud) and consumerwastes (e.g., NiMH batteries) the authors point to the highest valueassociate with electronic wastes, driven by neodymium. They note that industrial waste value is driven by scandium.

Inevitable variability associated with resource types and revenue, offering examples such as the value of Australian monazite > Bayan Obo bastnaesite > Malaysian monazite.

Using a power-law relationship (a nonlinear relationship between two quantities where a relative change in one quantity results in a proportional relative change in the other quantity) “the total REE value of a sources correlates well with its ore grade.”

The authors are confident that their outcomes can influence investment decisions to develop primary and secondary sources via the process of clarification of potential variability and thus, affording a pragmatic rule of thumb to estimate revenues.

BreakDown Summary

Characterizing potential revenue from 11 source materials for REEs from varying regions and technology configurations, the authors calculate REE revenue  on a per ton of source material basis, assuming all REEs in a deposit are extracted.

By fusing robust price forecasting methods and the ore grade literature the researchers introduce Monte Carlo simulations of rare earth oxide  (REO) revenue from primary ores, industrial, and electronic wastes.

And the outcomes? On a  per ton basis potential, revenues derived from industrial wastes are relatively low and driven by scandium oxide content; while revenue derived from electronic waste is high, driven by neodymium oxide.

“Primary ores value and source of value vary by deposit. Considering possible income from non-REO co-products, for all source materials except sea nodules and NiMH batteries, REOs constitute the largest source of revenue, implying that recycling these sourceswould be based on REO process profitability.”

By using a power-law correlation with r-squared 0.86 between value of contained rare earth oxides and total REE content holds across resource types, the authors offer what they describe as a simplified, and pragmatic forecasting method for primary and secondary sources.

Can the authors’ tool be used as at least a preliminary method for project prioritization?  For those interested in exploring check out the paper.