Kennedy Rare-Earth-Elements (REE) Briefing to IAEA, United Nations

Kennedy Rare-Earth-Elements (REE) Briefing to IAEA, United Nations


Mr. Kennedy works closely with the Thorium
Energy Alliance to promote US legislation for the commercial development of thorium
energy systems and rare earths. Thank you, Brad. The title of the paper is
“Creating a Multinational Platform, Thorium Energy and Rare Earth Value Chain – a Global
Imbalance in the Rare Earth Market.” The rare earth imbalance is largely the result of regulations
with unintended consequences, like they always are. Rare earths and thorium have become linked
at the mineralogical and geopolitical level. Regulatory changes pertaining to thorium contributed
to the excess market concentrations in rare earths. This has resulted in economic dislocation
and national security concerns for many countries, and a solution is required. The rare earths people frequently say there
are 17. Promethium doesn’t exist in the earth’s crust, so we’ll leave it out of the discussion. Thorium is a companion element to rare earths.
There is a high correlation between heavy rare earths and thorium. Generally speaking,
when you are mining the much more valuable suite of heavy rare earths, you’re getting
a lot of thorium. Monazite was originally not mined for its
rare earth. It was mined for the thorium, and the thorium was used to make gas mantles.
It was the original high efficiency lighting source back in the late 1800s, early 1900s. Monazite was the primary source of rare earths
all the way through to about 1964. What’s interesting about monazites, in most cases,
they’re a byproduct of some other form of mining a commercial commodity. When you’re mining rutile or titanium or zirconium,
the monazite is a tag-along product, and it separates out quite easily by gravity. Consequently,
when you are mining for these materials, you got your monazite for free, basically. If you look at the first decade and a half
of the rare earth industry, you can see that the United States was a dominant supplier.
Brazil was a large supplier. China actually tried to enter the market, and they couldn’t
meet Western standards so they weren’t able to pursue it. At this time, monazites represented close
to 100 percent of the world’s heavy rare earths. In the mid ’80s, the NRC and the IAEA made
some classification changes that dealt with thorium. Basically, make monazites fall into
the category of source material. Because of that, no one really wanted to manage the material
any more. Refineries didn’t want to accept monazite
because they didn’t know what to do with the residue or residual thorium. Just prior to
this classification changes, monazite represented about 50 percent of the world’s rare earth
supply. Remember this is a byproduct. This is something that was a very low- or no-cost
byproduct of some other mining. China’s market advantage evolved from NRC/IAEA
resource classification changes. They basically pulled monazite out of the value chain and
China stepped in and took advantage of this. China also implemented an aggressive top-down
industrial policy, which I think was very wise. The corresponding moments of classification
change, China implementing well-known industrial policy programs 863 and 973, China, at the
highest levels of government decided that the rare earth industry was critically important,
and they intended to dominate that market. Their aggressive entrance into the market,
the inability of Western producers to utilize high-value, heavy, rare earth monazites caused
most of the companies that were mining these resources to exit the industry. It’s interesting to note that the one rare
earth mine that you can see here in blue was eventually shut down, not for competitive
reasons or costing reasons. It was shut down because they had a thorium discharge from
their tailings pipe. The EPA and environmental groups put enough pressure on them. They eventually
shut down. Fast forward to today. The United States and
Australia, just two companies alone have invested well over $6 billion into new rare earth projects.
If you were going to look at their financial situation, it doesn’t look good. It’s quite
dire. Being from the United States and dealing with
the legislative process over there, we have to always speak of things in free market principles.
Is this a free market failure or is it something else? This needs to be considered. To avoid liabilities, US and global financial
markets favored rare earth projects with low thorium content, not high-value rare earth
distributions. This is the largest rare earth mine operating
in the United States. I want to point out that this is only half of the rare earth elements.
This is the lighter-value, lower-value portion. The only heavy rare earth that they claim
to be able to produce is almost invisible right there in that little sliver. These deposits come with a cost. The cost
is they don’t contain the heavy rare earths critical to accompany survival in a very competitive
industry. By the way, the Australian company’s rare earth distribution looks very similar.
It is a little bit better than this, in terms heavy rare earths, but it’s basically the
same thing. This is the economic rare earths that are
needed if you want to be part of any modern economy. This is what’s being mined today
by Western companies trying to avoid thorium. There is a disparity. I hope you can see that.
The United States, very market-oriented, balanced its short-term return goals against the cost
of developing its own value chain for what’s just low-value rare earths. This dictated that the company actually make
investments inside China, and it’s integrated itself inside China. They send all of these
materials right here to China for processing. These are very low-value materials that sell
at or below cost. Finally, they’re taking all the thorium and cementing it in place. The Australians chose to establish their own
rare-earth refinery inside Malaysia, hoping to get around the source material issue. That
didn’t work out for them very well. They spent about a year fighting the government over
thorium issues. They did have, I thought, an honorable approach to it all by integrating
themselves into the OEMs and end-users. Unfortunately, the cost of shipping ore from
Australia to Malaysia, then processing it, not being able to go all the way up the value
chain — it’s a pretty truncated refinery system — and then ultimately not having the
heavy rare earths, this company’s having tremendous trouble also. Today both companies are facing unsustainable
losses and eventual bankruptcy resulting from large-scale production of low-value rare earths
that greatly undermine the marketing of all light rare earths. If you go back and look
at that truncated list of elements, they produce a tremendous amount of those. To get past the losses, they keep producing
more and more, in hopes of eventually breaking even. It’s the old saying, “We’re losing money
on every unit, but we’re going to make it up on volume.” It’s not really working out. Another problem is the high cost of direct
mining. I want you all to consider that 70 percent of China’s rare earths come from the
byproduct production from an iron ore mine. China very heavily utilizes byproduct, co-product
production to keep their cost down. Both of these mines are single-commodity,
source-dependent. Unfortunately for them, the distribution of those commodities are
on the low-value, light side of the equation. These enterprises have much higher capital
costs than traditional mining ventures. Traditional mining ventures do not get into refining.
This leads to a huge disadvantage for individual mines, always starved for capital, trying
to build the entire fully integrated value system. It’s just too costly. This leaves China with absolute control of
the high-value heavy rare earth market. They can enjoy the profits in that market without
any competition. Full-value rare earth production, in a fully
integrated value chain is what you need to survive. We’ve learned or seen that developing
low-value rare earth deposits with high direct costs is not economically viable. But, high-value,
low-cost byproduct resources are abundant and they’re available. In the United States alone, thorium-bearing
rare earth phosphates and other thorium-bearing mineralizations could easily meet 50 percent
of world demand for rare earths, if they could just get back into the value chain. What I’m saying is there’s no need to develop
any new rare earth mining operations. We just need to fix the problem. These resources are
abundant and available. Every year, mining operations across the United States and across
the world take these valuable monazites and other thorium-bearing phosphate rare earths. They either plow them back into the ground
and blend them in to make sure they meet the sub .05 threshold for thorium or they a cement
them into tailings, lakes or dispose them by other processes. The material is available.
It can be introduced in the value chain. We just need to come to grips with the thorium
issue. John Kutsch is the executive director of the
Thorium Energy Alliance. John and I have spent about six years working on legislation to
fix this problem. There are two bills in the United States Congress today that if enacted
would create a federally-chartered multinational rare earth cooperative that’s privately funded
and operated, and it would be authorized to accept monazites and other thorium-bearing
minerals. It would do this within existing regulations
under the definition of unprocessed and unrefined ores. All of the actinides associated with
this ore would pass to another federally-chartered, what we call thorium bank, to ensure long-term
safe storage and the development of future use. Here’s what the rare earth cooperative will
look like. These are lots of existing mines that throw away rare earths today. They can’t
bring it to market. By creating these two entities, this material could flow straight
through and it would be owned by multinationals. It would be owned by governments that were
interested in making sure that their industries had a secure source to rare earths. All the thorium liability would be passed
over to what we call the thorium bank, and this thorium bank would be given congressional
authority to develop uses in markets for thorium including energy. The bill also establishes the multinational
platform for the creation of a thorium bank that’ll take all of this liability. The creation
of the Thorium Industrial Products Corporation is authorized to develop industrial uses and
markets for thorium including alloys, catalysts, medical isotopes, and other uses. The same
corporation would also be authorized to develop thorium energy systems that include solid
fuels, MOX fuels, solid fuel reactor technology, beam/accelerator-driven technology, and liquid
fuel reactor technology. Liquid fuel reactors carry a re-circulating
load and burns down the actinides. The liquid fuel reactor component would also look into
electric, thermal, synthetic, desalination, and even nuclear waste reduction. A liquid
fuel reactor has the ability to basically burn down actinides, and you could develop
these reactors to consume much of the spent fuel around the globe and produce energy and
heat from it. Very useful. This is what that would look like, the thorium
bank with its various missions. Both of these entities would be open to international investment.
Any IAEA member state, any government agency, or any true end user or producer of rare earths
or energy could invest into these entities. I know this is probably the wrong form to
ever say anything like this but I want you to really think about this statement. No technologically
important and widespread industry ever began inside a regulated environment. You really
can’t find a real-world example. The current environment demands conformity to a standard
paradigm, so the point of the Thorium Corporation is to create an unrestrained R&D platform
for all member states to participate in the commercially-developed next-generation technology. Look, it’s evolution or revolution. Some nations
are opting out of the traditional light water, solid fuel technology paradigm, and it’s going
to happen. The Chinese government is very aggressively developing liquid fuel technology,
and so is India. If there’s a single developer, there’s a single winner. The legislation here
proposes a multinational platform where all members and participants could be winners. It’s about working together and sharing the
rewards. Thank you very much. [applause] That’s very challenging and intriguing proposition.
The first question to ask before open to the floor is, what is the probability of this
bill being approved in the United States Congress? That’s a good question. I can’t give it a
percentage. It’s certainly possible. There are national security concerns inside the
United States relative to rare earths and the defense industry that are very strong
and very deep. That is the driver behind the legislation. In another time, in another topic,
I could show you that the United States, its entire US military is 100 percent dependent
on China for rare earth materials and components. That is the driver behind the legislation.
We feel like we’ve got some leverage there. Thank you. It’s open to discussion. Frank Harris, Rio Tinto in Australia. The
thorium bank is a fascinating concept but I wonder, have you done the work behind what
the potential uses of thorium is in volume and weight percentages? As it goes, how much
will be produced? To me, it seemed like there are a lot of extremely small quantity applications
in there which wouldn’t even begin to account for the amount of thorium you would have going
and you end up with this massive bank with no one taking any money out. That’s exactly right and that’s why we push
so hard for the commercial development of thorium-based energy. If the bill passes,
you would be able to develop MOX fuels which would use a reasonable amount of thorium.
But ultimately, to utilize that much thorium, you would need to roll out a thorium liquid
fuel reactor economy on a global scale. If you want to look at it in a different way,
you’ll never have to mind thorium or directly mind rare earths and you’ll have all of the
rare earths you need and all of the energy you need. [inaudible 17:31] of France. Just about the
concept of the thorium bank is a good idea but it’s in your proposal bills for the new
legislations? The Congress will take into account that this bank will stay for only
a few decades before to supply rallies the market that’s been…you have to put the annual
legislation of finance during a few decades result any benefits. That’s a good point. The production of rare
earths, there would be a small fee. Let’s say it’s five cents a kilogram, and that would
pay for the long-term storage of thorium. There’s really nothing to storing the thorium.
There would be almost no cost. You would basically have seismically, hermetically
sealed buildings, and you’d put the material in a container, and you’d draw off the radon
as it came off, and then let it decay to lead. There would be no radio emissions from the
building. Nobody ever needs to go into it. It’s really very, very low cost. You could store about 50 years worth of thorium
in a building about a third the size of this. Yes, there’s some cost, but they’re totally
reasonable. What’s the cost of the United States, Japan, Korea, and Europe continuing
to lose technology industries to China because they’re concerned about a guaranteed supply
for rare earths? I’d say that’s pretty high cost. One of the propositions of the generation
for reactors is that you mostly run into the 300 megawatts to 150 megawatts category. Not
in the thousands, or thousand-something category that we have today. That’s an excellent point. The difference
between these reactors and PWRs, LWRs, once you have an approved design, you could basically
build these on an assembly line. Just like an aircraft, when the aircraft gets to the
end of the assembly line, it is a permitted unit ready to go into the field. You would have sight requirements, but if
you were moving these initially onto the campuses of existing reactor sites, it would be a very,
very quick and easy process. Alvin Weinberg, the man who held some of the original patents
to the light-water reactor, invented these liquid fuel reactors in the ’50s as they were
building the first of three that they operated at Oak Ridge. He said, “It’s so simple, all I need are my
three p’s, a pipe, a pot, and a pump.” That’s it. All of the safety features are a hundred
percent passive, so they’re very, very different than traditional light-water reactor. Thank you very much. As we see there is no
problem, the shortage of energy, the future, at least regarding sources.

10 thoughts on “Kennedy Rare-Earth-Elements (REE) Briefing to IAEA, United Nations

  1. It's a great talk, but what exaclty is he trying to achieve through the IAEA? I can't really see them changing anything significant without a go-ahead from the US

  2. Thank you Gordon. James Kennedy is a forceful speaker, and I can hear all the years of frustration in his voice. I was especially caught by the question from Frank Harris (Rio Tinto) at 16:20, wondering what we could use 'all that thorium' for. After I watched this, I watched Stephen Boyd's presentation at TEAC6 on the mechanical and metallurgical properties of thorium. I was completely floored by how versatile thorium is as a metal, and how we have barely started to understand its uses. Its very mild alpha radioactivity needs to be taken into account, of course. But it's long half life means that there's no real concern about metallurgical properties changing over the lifetime of a machine or a part. If my arithmetic is correct, only .36 nanograms per gram of thorium is lost to radioactive decay in a year. Normal wear and tear on machinery would remove more.

    We can use all the thorium we can get. Its use as fuel wouldn't actually show up in a pie chart of eventual thorium production. According to Wikipedia, chromium production is about 9.5 million tonnes a year. We can easily use that much thorium for metallurgy and chemistry. The worlds energy can come from about 10,000 tonnes of thorium a year – 1/10 of 1% of production. Step up, Rio Tinto!

  3. Source Material: Materials containing any ratio or combination of Thorium and Uranium above .05%. Producing or holding these materials within the regulatory threshold (.05%) requires extensive and wide-ranging licensing, storage, transportation, remediation disposal and compliance costs, including prohibitive liability and bonding issues. Consequently any potential supplier of byproduct / co-product rare earth resources that would be designated as "source material' disposes of these valuable resources to avoid liability and compliance issues.

  4. Has anyone contacted John Stossell about this as a possible segment on his show?  “Contacting him” means more than just posting comments on his Facebook or Youtube sites.
          (A) The statement: “no technologically important & wide spread industry ever began in a regulated environment…”  fits his program and philosophy exactly.
          He loves covering unintended consequences that the government creates: (B) This regulatory structure creates unintended consequences:  Instead of people Americans being safer:  (1) there is the unsafe situation of providing China with control over a needed defense product, (2) The effectively unregulated Chinese processes dump more toxic items in the environment than a U.S. based system does.(3) The inability to have thorium reactors mean more dirty coal ends up in our atmosphere, water and ground.  The reactors would reduce toxic releases.  They would produce less toxins building photovoltaic cells and storage systems.
          (C) He dislikes the lawsuits that defeat progress or allow stupid behavior to be rewarded, like in his show on gasoline cans.  One of the main problems against corporations working on using Thorium is lawsuits.
          It can be stated that while some of this proposal appears to be against the philosophy of libertarians and Republicans to have what is basically a government structured corporation, this structure would actually reduce the burden of regulation and litigation, and is funded and operated as a private corporation like a regulated utility. Should perfection be the enemy of better?  Is it better to get 90% of what you want or hold out for the 100% which you can’t get? 

  5. The IAEA is worthless…. Israel can deny inspections and their Prime Minister is a Rothschild Zionist who is a madman. No country should respect this agency…. Natenyahu is committing genocide ..

  6. Thank you for putting up this most interesting presentation. Good luck in carrying your thoughts further. George Morris

  7. Man, I'm tryin' to get outside for a bike ride but I spat my coffee out listening to this now youtube entrenched piece of MISinformed crap from an otherwise educated smart dude.
    Re Lynas…ITS WEATHERED Monazitre dude!! very very LOW in Thorium OK???
    what else, oh yeah ..bankruptcy MY ARSE! JOGMEC/Sojitz just rolled over and re-shaped the debt repayment profile to match the now relentless DEMONSTRATED
    rise in production of the VALUABLE Nd/Pr product ..coupled with falling COP.!!! Green tik of compliance from the last IAEA visit but a reminder to put a bra on the bull for the opposition backed ie politically motivated science retards – THE GOVERNMENT NEVER OPPOSED THE PROJECT…sheesh I could go on – suffice to say i just bought a shitload more shares in this winning company that everyone thought was mugged to death but is rising like ROCKY!!! Gotta go.. my bike ride awaits. oh yeah, one more thing.. "Don't believe everything you see/hear on the Internet" – Benjamin Franklin  (well he wud have 🙂 . .  PS Any idea on how much Dysprosium is now being designed OUT of the Magnets ??? HEAPS Someone needs to attend the 10th Int Conf on Rare Earths in Singapore this NOV 2014.   Improving Chinese environmental production processes is costing them a fortune and they are on the hunt against their stinky rogue illegal producers/smugglers = price rises coming down the pike…..  MIS information is so counterproductive!!!!! DIS information is pure evil – Satan surely is the Father of LIes

  8. And North Korea has about 6 Trillion doallars worth of Rare Earth's metals you see it all begins to make sense

  9. Instead of admitting that you are stupid and that you are wrong…blame the free market..
    Because we are losing…let's isolate ourselves for the world and vote Trump, this way we don't have to play free market…but still brag to people that we are free! Let's have food stamps and not call it communism.

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