Attention Rare Earth End-Users: There Is a New American Source
By Jack Lifton
27 Feb 2008 at 11:49 AM GMT-05:00
resourceinvestor.com
DETROIT (ResourceInvestor.com) -- It was announced yesterday, Tuesday, February 26, 2008, in Salt Lake City, Utah, at a special session of the Society for Mining, Metallurgy, and Exploration’s annual national meeting entitled “Industrial Minerals: Rare Earths-Mining, Geology, and Metals” that a historically known-since 1949-very significant major high-grade hard rock source of thorium, presenting as thorium oxide rich mineral veins in Idaho and Montana, at sites in the geographic region known as the Lemhi Pass, has been “re-explored,” validated and quantitatively confirmed by geologists.
The specifics of the announcement were made in a paper jointly presented by geologists Richard Reed, a consultant with Idaho Engineering & Geology, Inc, and Dr. Virginia Gillerman of The Idaho Geological Survey, a state agency located in Boise, Idaho, as part of the special session named above. The paper was entitled: “Thorium and Rare Earths in the Lemhi Pass Region.” It contained the statement: “The claim holdings [being resurveyed] include the Last Chance vein in Montana, reportedly the largest and richest known thorium and rare earth vein in the United States.”
For investors who are non-miners I want to point out that the word “claim” in the above sentence is a noun and refers to a type of property right in a geographic unit of (usually publicly, federal or state owned land) upon which a valuable mineral is to be sought for commercial purposes. When and if a commercial amount of a valuable mineral or resource is proved to exist on the claim then it may be ‘patented,’ i.e., ownership may become absolute for the claim holder.
Hey, you say, that’s nice, but don’t think you’re going to just ignore the words, “rare earth,” in the above announcement and only talk about thorium, are you? I certainly am not, but before I discuss the rare earths at Lemhi Pass, I want to try to be clear about the total investment opportunity; it is a synergy composed of value both from thorium and from the rare earths reinforcing the value of each other. This has not happened before, and it might not have happened even just a couple of years ago. I will discuss the details of the rare earth discovery and opportunity tomorrow, but for now I need you to understand why the Lemhi Pass will soon enter the working vocabulary of nuclear power advocates, genuinely ‘green’ environmentalists, politicians, and, oh yes, bankers and investment advisors.
Once upon a time, the United States Atomic Energy Commission (USAEC) released a report on the status of work it had sponsored and funded, and which was being carried out by a combination of government laboratories and privately owned in-house laboratories of a select group of industrial nuclear reactor construction companies, on the feasibility, from an engineering standpoint, and the economics, from the standpoint of materials’ costs and availability, of nuclear reactors based on a fuel combination of a relatively small amount of enriched uranium, or plutonium, being used to activate the naturally occurring, more common than uranium in the earth’s crust, radioactive metal, thorium to breed fissile isotopes, which would then fission releasing useful heat.
The report is available in all of its 147 pages on the web, “The Use of Thorium in Nuclear Power Reactors.” Several thorium using reactor technologies had been designed and extensively studied, even back then. The USAEC report contains the following paragraphs, taken from 4. Nuclear Fuel Resources, Requirements, and Economics, 4.1 Introduction:
Both U-238 and Th-232 are convertible to fissile material in a nuclear reactor, but unlike natural uranium with its small percentage of U-235, natural thorium contains no fissile isotopes. Hence, the initial fuel inventory and any makeup fuel requirements to sustain the operation of reactors using the thorium cycle must depend on the U-235 separated from natural uranium, or on secondary fissile material produced in another reactor. Even in the latter case, the secondary fuel depends at some point on naturally occurring U-235 for fissile material. Thus, it is essential that the uranium as well as thorium requirements for fuel inventory and fuel replacement be examined when considering the use of the thorium cycle.
The use of the thorium cycle can lead to reductions in the amount of uranium ore that must be mined for the production of electrical energy; nevertheless the amount and cost of the uranium ore required still will be more important than the amount and cost of thorium ore. For example, a thorium fueled reactor might require on the order of 0.1 kg ThO2/kWe to provide its initial fertile material requirement compared to about 5-10 times as much uranium ore to provide for its initial fissile fuel requirement. At a ThO2 cost of $5/1b, the initial thorium requirement would, therefore, be about $1/kWe, or a thorium inventory charge of less than 0.02 mills/kWe compared to the uranium ore inventory cost of 0.1 to 0.2 mills/kWe at an ore cost of $8/lb U3O8. Clearly, in contrast to the effect of an increase in uranium ore price, an increase in the cost of thorium ore by a factor of two would have little effect on the cost of electricity from a thorium-fueled reactor.
The amount and cost of thorium ore are, therefore, of little concern in assessing the possible role of the thorium cycle in the production of nuclear energy so long as the cost of recovery and amounts available are not very different from present estimates. Because of the present low thorium prices and the uncertain processing cost of the present low-volume thorium processing industry, there might be an economic incentive not to recycle thorium in the near-term, but to stockpile it until a large-scale, lower unit cost, industrial thorium processing capability was developed.
In the following discussion, the estimated domestic reserves of uranium and thorium ores are reviewed and the relative requirements of resources for reactors using the thorium and uranium cycles are discussed within the context of the projected nuclear power growth. Finally, the economics of the thorium cycle are discussed with particular emphasis on the effect of possible uranium ore cost increases.
You can read the report’s optimistic conclusions with regard to the projected growth of nuclear power or the economics of the “thorium cycle,” but I first have to tell you that the report, WASH-1097 was written more than 40 years ago, and clearly, as any bear in the forest knows, the creation of an electric power industry based on nuclear reactors fuelled principally by thorium has not yet come into existence.
I’d like to now point to an opinion, which I share, and which is well argued and discussed on a Blog called Nuclear Green. It is simply that the perceived need, at the height of the cold war, for vast amounts of weapons grade fissile materials, primarily plutonium created (i.e., man made) in breeder reactors politically killed the “thorium” reactor program, which the USAEC was developing from the 1950s through the early 1970s, in order to reduce costs and make safer nuclear reactors in terms of reduced or eliminated meltdown potential (Chernobyl), reduced possibility of the emission of radioactive gaseous contaminants (Three Mile Island), costs of operation, non-production of weapons grade fissile materials, and reduce the U.S. dependence on foreign sources of nuclear fuel,, if at all possible.
When politics killed the above program it also killed any interest in prospecting for or developing mining resources in America for thorium. But, it turns out, that the validation of what economic and political developments have made into one of the major American natural resource discoveries of the twentieth century was thereby delayed until now.
Although most of my readers are aware of the present, second, uranium prospecting boom, most of you will not remember the first uranium rush in the 1950s, when the hope of unlimited peaceful nuclear reactor generated electricity was in the air for the first time. It’s certain that you didn’t know that thorium was very much in the running, right behind uranium, to be a nuclear reactor fuel even back in the days of the first uranium rush, but, as you now know, it got sidetracked by the influence of the military, which wanted all of the enriched uranium fuelled ‘breeder’ reactors it could build, encourage, or cajole so as to insure a steady and increasing supply of weapons grade plutonium.
Back during the first uranium rush, I’ll call it UR1, some far sighted power companies were making longer range plans, and one, Idaho Power, now stands out as precociously prescient. Idaho Power was interested in finding its own captive supply of uranium to fuel the reactors that everyone said would ‘soon’ supplant coal. The prospectors were sent out with Geiger counters and one mandate, as Shakespeare might have had a character proclaim, “Go, get uranium!” Well, you can guess the rest; the prospectors not only found uranium, but with only the Geiger counter as a selection and identification tool they were soon bringing the company’s analytical laboratories samples of minerals containing the only other naturally radioactive material, thorium, and the thorium was, quite naturally associated with rare earth minerals.
Idaho Power and a successor group of like minded large nuclear-power-involved companies decided that it was a good and valuable bet to have direct access to thorium, and until the USAEC put the brakes on the development of thorium fuelled nuclear reactors (in 1967) the Lemhi Pass region, where thorium had first been noted in 1949, was surveyed for thorium and rare earths in greater detail than most rare earth nines even today have been surveyed; tens of millions of pre-1967 dollars were spent on prospecting and testing.
Ironically it was the rare earth elements (REEs) that were, so to speak, along for the ride, in the beginning, anyway, with the focus being then on the thorium locations, reserves, and resources.
The companies involved slowed and then, finally, stopped the work after the publication of WASH 1097, and the mineral claims were mostly abandoned, i.e., allowed to expire. Without being patented. In 1988 a mining investor found the expired claims and began re-staking and acquiring them, because he thought that thorium’s potential as a non-proliferative fuel was going to resurface with the collapse of communism. He also thought that the REEs might have some value as he was hearing that more and more uses were being found for them every day.
Two years ago, that same investor, hired Mr. Reed, who had worked for Idaho Power during the last few years of the original period of that company’s claiming in the Lemhi Pass, to review the immense set of records of past work and to resurvey promising claims for the purpose of deciding on which areas might be most profitably worked in the event of a thorium renaissance.
This recent work soon attracted the attention of both the Idaho Geological Survey and of the United States Geological Survey (USGS) whose thorium and rare earth specialist, Mr. James Hedrick was in fact the moderator of the special session of the SME where Reed and Gillerman presented their current results. Mr. Hedrick has stated that the credibility of the work by Reed and Gillerman and the extent of the deposits mapped by them will cause the USGS to re-evaluate both their thorium and rare earth mineral commodity surveys, and that later in the year the figures for the reserves and resources of both the US, and the world, for thorium and the rare earths will be revised to take into account the very large amounts of both which are now proved to be present in the Lemhi Pass region.
Thorium is naturally found associated with rare earths, but since it was cast aside by the USAEC, its uses are far too few for it to be considered an asset of rare earth mining, so it has become a kind of pariah with rare earth companies, which, when they do report its presence, quickly add footnotes that it is only present in low concentrations and that it can be removed and contained (It is after all naturally radioactive), and provides no environmental hazard.
One commentator, present at the meeting, but not a speaker, said to me that there is so much thorium in rare earth tailings that it is not worth mining any new ore bodies. I take exception to that statement, because, thorium in tailings, which in one reported case is running 500 parts per million (ppm), is in no way just one easily targeted undifferentiated material; it is mixed in every case with other residues from the mining, including chemically unrelated metals and minerals, and a process would have to be developed, expensively and with the use of very limited specialized manpower, to extract it commercially from each different type of tailing.
Also, although I agree that thorium is present in rare earth tailings and also in many, if not most, iron ore bodies, it is the amount and grade of a material in an ore body that determines the value of mining it, if there is a renewed demand; the Lemhi Pass deposits may well be the highest grade and most extensive in that grade that are accessible on the earth, they are certainly the best in North America. Therefore if the second life of thorium as a green nuclear reactor fuel should come about the Lemhi Pass deposits will be the most economically viable, probably in the world, for the production of nuclear fuel.
So we have the dawn light, I think of a complete reversal of fortune for the thorium deposits in the Lemhi Pass. In fact, as I will discuss tomorrow, in the near term, the thorium in the Lemhi Pass may well be produced regardless of the immediate need for it, because of a further development; it turns out that the Lemhi Pass district is America’s richest accessible source of not only the rare earth metals, but of the key rare earth metals needed today for the production of magnets, such as neodymium and gadolinium and of europium, a key ingredient for the production of phosphors for television screens.
To document and validate my statements above, and to give you the data background for tomorrow’s report, I include here the PowerPoint presentation of the talk about thorium and the rare earths by Reed and Gillerman. Pay particular attention to the slides numbered 7 and 8, which give the figures for thorium and rare earth reserves now proven at primarily just one site in the Lemhi Pass, and then read slide 13, which summarizes the paper’s conclusions.
Note well the prices for uranium and thorium stated in WASH 1097 above for 1967 and the economic forecast of the impact predicted (none) of a rise in thorium prices on the economy of thorium reactors. Don’t you wish that you had bought uranium for the long term in 1967? If you don’t invest in thorium now you may wish, a lot sooner than in 40 years that you had done so.
Excuse the pun, but this data is going to rock the rare earth mining community in North America, if not the world, and there is now no longer any question of where the thorium can be obtained for green nuclear reactors for both the U.S. and the world for a long time to come.
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