By Paul Epier – Alaska Dispatch – Published: December 27, 2010

Rare earth minerals are so rare you probably couldn’t name one unless you’d been forced to memorize the periodic table in chemistry class.

But Gov. Sean Parnell sees the future of Alaska in pockets of dysprosium, terbium, yttrium and other obscure rare earths that might be buried around the state. His proposed budget for fiscal year 2012 includes $500,000 for a strategic assessment of rare earth elements, or REEs, in the hopes of someday wresting business away from China, which now controls 97 percent of the rare earth production and export market.

“I see a day when we can unlock a new set of resources for our nation,” Parnell said in unveiling his budget proposal earlier this month.

Parnell is hoping to take advantage of a resurgence of interest in REEs, which have become vital components in cell phones, computer hard drives, solar cells, wind turbines, hybrid vehicles and other clean energy technology. As the demand for REEs grows, the supply is starting to dwindle, mainly because China is cutting back on its production, some believe in an effort to drive the cost up.

Bob Swenson, director of the state division of geological and geophysical surveys, says his agency requested money for the survey so the state can begin to identify the potential and, in the future, play a key role in the domestic production of rare earth minerals.

Parnell’s timing is impeccable. A week after his budget speech, the U.S. Department of Energy released its Critical Minerals Strategy, also aimed at kick-starting a fledgling U.S. rare earth industry. Government officials are worried that the minerals are vital to national defense, among other things, and they don’t want to get squeezed by China or other countries, including Australia and Kazakhstan, that are starting to ramp up production.

To that end, Alaska Sen. Lisa Murkowski introduced legislation in June that would foster investment in exploration and development through expedited permitting and access to federal loan guarantees, among other things. At the time she noted that world demand for REEs was 120,000 tons per year and China had recently announced it would cap production and export on 35,000 tons annually over the next five years.

The House passed a similar measure in late September.

Ketchikan’s dysprosium mother lode

Major deposits of REEs are known to be in Idaho, Montana, Wyoming and California, near the Nevada border, where a company called Molycorp just revitalized an old mine with a $531 million investment.

But as often happens when it comes to resource development, Alaska could be a major player, too.

A mine at Bokan Mountain near Ketchikan is thought to be one of the three largest sources of REEs in the U.S., probably the largest for dysprosium, which is used in magnets and particularly in magnets used in vehicles. A small amount of dysprosium goes a long way and allows magnets to keep operating when temperatures get high.

Bokan Mountain is thought to hold about 3.8 million tons of REEs or, as Murkowski put it, “more than enough to break China’s stranglehold on the market and protect America’s access to the rare earths that are vital to the production of cutting-edge technologies in this country.”

Jack Lifton, an expert in REEs who spoke to the Alaska Miners Association conference in November, called Bokan Mountain the “most desirable deposit” in the country because the proportion of “heavy” rare earths like dysprosium to other REEs in the same deposit is high, and that means it’s easier to separate the valuable dysprosium from the other REEs that might not be as economically feasible right now.

There are 17 different minerals considered to be REEs and, according to geologists, many of them are often found together in the same piece of ground, to put it simply. Something like dysprosium or terbium or neodymium, which was singled out as strategically important by the Energy Department, might be worth a mining company’s investment, while others might not.

So, Lifton explained to the conference, according to a story in North of 60 Mining News, the process for extracting just the dysprosium can be long and relatively tedious, involving a chemical separation process followed by even further refining.

Alaska at the center of a heavy rare earth movement

Lifton calls dysprosium “the metal of the century” and thinks Alaska could become “the center of heavy rare earth production.”

The operators of Bokan Mountain hope so, too. In a Dec. 22 newsletter, Ucore Rare Metals Inc. president Jim McKenzie updated the company’s most recent round of testing at the mine and said the company hopes to embark on an aggressive development schedule in 2011.

He said the results confirm the enriched heavy rare earth content at the mine including “inordinate levels of dysprosium and terbium, metals recently earmarked by the U.S. Department of Energy as being critical to near term American energy policy.”

Steve Borell, executive director of the Alaska Miners Association, thinks there’s a great future in rare earth minerals in Alaska, partly because the mining operation as well as the processing facilities cause few environmental issues. He describes the processing as basically a large warehouse with a series of washing tanks that use different chemical reagents.

Borell would like to see a major company that has a need for REEs back a mining operation in Alaska, a company that could ride out the ups and downs of the rare earth metals market.

“I’m talking about somebody that sees a long-term strategic need — a Boeing or General Dynamics, for instance — that can put together a processing facility, somebody that can withstand the challenges the Chinese are likely to bring to the marketplace,” Borell said.

He also thinks the situation warrants state assistance in the form of incentives, such as providing land for processing facilities.

Swenson, the state geologist, said a strategic assessment, if approved by the Legislature, will build on work already done by the mining industry and other agencies, the federal Bureau of Mines, for instance, or the U.S. Geological Survey.

Studies done over the past few decades have identified REEs in roughly eight different areas of the state, Borell and Swenson said, primarily in southeast Alaska, the Interior, the Seward Peninsula near Nome, and the Ambler district on the south slope of the Brooks Range.

The survey would involve looking more closely at the chemistry of the rocks, sampling and surface mapping. He does not envision this survey to include any drilling or core sampling.

Borell called the assessment “an excellent idea.”

“This is what this nation needs,” he said. “Somebody needs to step out and go find these things.”