Rare Opportunities

December 1, 2009
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REITA’s executive director discusses the challenges facing the rare earth industry and the association’s plans for the future.



The Rare Earth Industry and Technology Association (REITA) was created in June 2009 “to facilitate and foster the creation of a global rare earth industry and technology base to meet the growing need for rare earth materials and products for green energy, defense, energy independence and homeland security applications.”

I recently had the opportunity to speak with Keith Delaney, REITA’s executive director, regarding the challenges facing the rare earth industry and the association’s plans for the future.

Why was REITA formed?
The word coming out of China, and the opinion of industry experts, is that it won’t be long before China will not be in a position to export rare earth materials. Their internal markets are growing extremely fast, and there’s a desire on the part of Chinese officials to limit production because they see their rare earth reserves as limited resources that need to be managed.

Secondly, rare earth technologies-the downstream products made from mining and processing rare earths-have moved offshore, often to China. Equally disconcerting is the fact that rare earth technology innovations have pretty much dried up in the U.S.

What are the association’s major goals?
The major goals are three-fold, and these aren’t necessarily in order of priority. One is the development and commercialization of rare earth technologies. Second is the creation of rare earth technology supply chains that will assure diversity and secure the supply for those industries that use these rare earth technologies. The third is to educate stakeholders in countries like the U.S., Europe and Japan, for example, regarding these issues and what needs to be done to address them.

The first rare earth technology that REITA has focused on is rare earth permanent magnets, which are the enabling technology for many of the applications that the U.S. and the rest of the world are counting on for energy independence and green energy. Rare earth permanent magnets are used in brushless DC motors that power the electric drive in hybrid electric vehicles, plug-in electric vehicles and so on. You can’t make any of those electric vehicles without rare earth permanent magnets.

You also can’t make the next generation of wind turbines without permanent magnets. Next-generation wind turbines, which are already being deployed, are gearless. Without the gear mechanisms that the conventional wind turbines have, the new wind turbines can act as reliable power generators that can stay online and produce electricity more consistently.

How will REITA interact with manufacturers and suppliers?
The interaction will primarily be through membership. Because the members will be focused on creating reliable supply chains to add diversity to the marketplace, we’re looking for membership at all points in these various supply chains-from the mine to the OEM. In the case of magnets, we have Molycorp Minerals and potentially other rare earth producers on the mining side joining in. On the other end, we have original equipment manufacturers such as General Electric.

Prime defense contractors would be a welcome addition to REITA. Another example is auto manufacturers, because their efforts toward hybrid and all-electric vehicles are so tied to the availability of rare earth magnets.

How will rare earth customers benefit?
Membership in REITA will allow members to build relationships within their given supply chain that will be very progressive and far-reaching. Since the consortium will be focusing on development efforts, they’ll also have early access to technology that’s being developed. Lastly, but not necessarily least important, is the fact that they’ll have a chance to influence development efforts as they unfold.

What is the rare earth industry’s major challenge?
The challenge is a sense of urgency. China is doing what they think needs to be done, which is to take care of their own rapidly growing economy. Much of their economy is based on rare earth technologies as well, and I wouldn’t begrudge them their policies to conserve their natural resources and to continue to sponsor the growth of their own industries. It’s a matter of urgency for the rest of us to take the bull by the horns and develop our own supply chains.

How will REITA help the industry face that challenge?
It’s a function of addressing that urgency to have a critical mass of talent, capabilities and interest within the consortium of REITA. REITA will also be a conduit to the members for certain government funding of the development of these technologies. The government, particularly in the Department of Defense and the Department of Energy, is quite concerned about these issues.

For additional information, contact REITA at 8400 East Prentice Ave., Suite 1500, Greenwood Village, CO 80111; (303) 409-7603; fax (303) 409-7605; e-mail Keith.Delaney@reitausa.org; or visit www.reitausa.org.

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