Reaching for ‘Rare Earth’—Alaska’s Critical Minerals Gain National Attention
Have you used a cellphone, logged on to a computer, or watched a flat screen TV lately? If so, you’ve been using a device that requires rare earth elements (REEs). And while these elements can be found throughout the world, including in Alaska, most of the world’s production takes place in China, putting the supply chain for hundreds of products—as well as significant defense applications—at risk.
What are Rare Earth Elements?
Simply put, REEs are a set of seventeen metallic elements, including the fifteen lanthanides on the periodic table plus scandium and yttrium. According to the US Geological Survey news release “Going Critical,” while the amount of REEs used in a product may not be a significant part of that product by weight, value, or volume, it can be necessary for the device to function. For example, REE magnets often represent only a small fraction of a device’s total weight, but without them, spindle motors and voice coils in desktops and laptops would not be possible.
“A number of these commodities are crucial for consumer electronics but also for alternative energy sources like wind turbines that have specialty magnets that require rare earth elements,” explains Steve S. Masterman, state geologist and director for the Alaska Division of Geological & Geophysical Surveys. “They are also used in military applications such as lasers and laser guidance systems, and GPS systems.”
This is important because—despite the overwhelming need for REEs—in 2019 China produced approximately 90 percent of the world’s total output while accounting for 70 percent of the world’s exports, according to research firm Adamas Intelligence. This is a huge change from 1993, when 38 percent of REE world production was in China, 33 percent in the United States, 12 percent in Australia, and 5 percent each in Malaysia and India. Other countries, including Brazil, Canada, South Africa, Sri Lanka, and Thailand, made up the remainder.
The Chinese government determines the amount of the REEs that are produced and exported and can also limit the number of companies that export REEs from China. This is of particular concern to the United States, which relies heavily on those materials.
“A few years ago, when China cut off the supply of REEs, it was a wake-up call for the US government,” says Masterman. “They realized that, ‘Holy moly, we are completely relying on China for an integral element that we need to run environmentally friendly power systems, military technologies, and even cellphones.’”
The government compiled a list of significant elements that the United States sources from foreign markets. “The question then became, ‘How do we reduce our dependence on foreign supplies and stimulate domestic production?’” continues Masterman of the thirty-five critical elements that made the list. “It became the US Geological Survey’s responsibility to assess in what states these metals and minerals occur and to share that information with the public and industry.”
Good News for Alaska
According to Masterman, of the thirty-five identified critical minerals, which include REEs, only three are considered unlikely to occur in economic quantities in Alaska.
“Each of these generally occurs in a specific geologic environment, so if you understand the geology of the state and the mineral systems, you can identify areas where a particular critical mineral is likely to occur,” says Masterman.
“For example, rhenium is very commonly found in the porphyry copper-molybdenum deposits, and the Pebble Mine area probably contains forty years’ worth of global rhenium demand. Massive sulfide deposits contain barite, and the Palmer deposit outside Haines includes barite in its economic analysis, which could be recovered for a saleable product. So, if you know where porphyry and massive sulfide systems occur, you have an idea where to look for rhenium and barite.”
While the minerals are here, one of the issues facing those who would mine for REEs is how to make it a profitable enterprise.
“When people think about the buzz surrounding critical minerals, what they need to realize is that many of them are not produced in vast quantities; for example, the US consumption of beryllium was 180 tons, which is almost nothing,” says Masterman.
“The economics of mining some of these minerals are quite fragile, which is why many of these commodities are produced as a byproduct of mining other more economically substantial commodities,” he adds.
The Dotson Ridge resource is the highest grade NI 43-101 compliant heavy rare earth resource on US soil. The resource is open both at depth and on strike, indicating potential expansion.
The Red Dog Mine, for example, produces lead and zinc as its principal commodities, but could also benefit from recovering the byproducts of indium and germanium.
“You would never produce indium and germanium as principal commodities as they are not primary economic drivers,” says Masterman, adding that some critical minerals—tin, chromium, cobalt—are. “But if you can find the gold, zinc, and silver deposits that host them, it makes the economics of their production more attractive.”
While these established mines could profit from recovering critical minerals, there is also interest in creating new mines specifically geared toward REE production. These include a possible mine as part of the Bokan-Dotson Ridge REE project near the head of Kendrick Bay on the southern end of Prince of Wales Island, where engineering studies are underway.
First Things First
According to Michael Schrider, Ucore Rare Metals’ vice president and COO, the company currently has two primary goals in Alaska: develop a processing and separation plant for REEs, followed by the development of the Bokan-Dotson Ridge mine.
“We envision the plant, called Alaska SMC, as the very first component for the Bokan-Dotson Ridge project, where we hope to ultimately develop a mine,” he says. “The Alaska SMC would enable us to import US-allied-sourced feedstocks and process them into made-in-the-USA finished REE oxides, which would put us in revenue mode.
“In the meantime, on a parallel track, we are continuing with engineering work behind the scenes to advance the mine to the point where we can get it to a near shovel-ready status, meaning that engineering is complete and permitting is well underway,” he adds.
“In the short term, the best approach may be encouraging existing mines and development projects to produce the critical minerals they contain while advancing technologies to develop other mineral systems.”
Become an Industry Sponsor
According to Schrider, the roughly $35 million Alaska SMC plant, which will be located in the Ketchikan Gateway Borough, would be one of the first REE processing and separation plants in the nation.
“There is a little bit of a race going on right now in the United States; there is ore being mined in California, but it is being sent to China for processing. There are various plans in the works from different companies to create processing plants, but what differentiates us is that while there are plants being considered that focus on either heavy REE or light REE, we will have the ability to process both,” he explains, adding that the Bokan deposit contains heavy rare earth elements, which, because they are less abundant, tend to be more valuable.
To this end, in May 2020, Ucore acquired Innovation Metals Corporation and its separation technology, known as RapidSX.
“This was a critical piece to ensuring economic viability of the Alaska SMC,” says Schrider. “Right now, we’re working to develop specific engineering based on RapidSX technology, which will help us to obtain funding.”
Bokan Mountain’s Dotson Ridge resource core shack has held approximately 8,000 meters of diamond drill samples in qualifying the resource.
Ucore is in discussions with AIDEA (Alaska Industrial Development & Export Authority) about some form of funding participation and is looking at other ways of raising the balance, including potentially taking advantage of Department of Energy loan programs as well as private financing.
The goal is to have the Alaska SMC up and running by the end of 2023. The facility would create roughly two dozen jobs with the possibility of expanding beyond that number. While there is no set timeline for the development of the mine, the next phase of engineering studies is expected to be complete by the end of this year or the first quarter of 2022.
As interest in REEs grows, support is building on both local and state levels.
“We’ve been in touch with Governor Dunleavy and he has been very supportive and has spoken publicly of the importance of REEs coming out of Alaska,” says Mark MacDonald, vice president of business development for Ucore Rare Metals. “He believes that Alaska could be an important strategic supplier of REEs and processing for the US market.”
According to Marleanna Hall, executive director of the Resource Development Council, having responsible REE development in the state would not only help already established mines but have far-reaching impacts for America’s security.
“Our policy is to advocate to develop resources in responsible ways, including encouraging exploration and production of natural resources from existing deposits,” Hall says. “We support the development of mined materials that benefit Alaska with jobs and economic activity, and that could decrease dependence on foreign minerals.
“We have a lot of different prospects, as well as six large operating mines and hundreds of placer mines and smaller operations that could help to provide what the nation needs going forward,” she continues.
In addition to the jobs that new or expanded mines would create, Hall adds that such developments support infrastructure improvements as well.
“When you have a resource development project in rural Alaska, you often see improvements in the related infrastructure in the area,” she says. “These projects not only provide family-wage jobs but have an impact on the communities through general improvements in infrastructure and access, such as increased broadband or upgraded transportation facilities.”
“A few years ago, when China cut off the supply of REEs, it was a wake-up call for the US government. They realized that, ‘Holy moly, we are completely relying on China for an integral element that we need to run environmentally friendly power systems, military technologies, and even cellphones.’”
She credits recent efforts by the Alaska delegation and Senator Lisa Murkowski to get critical minerals included in federal legislation. In January, then-President Donald Trump signed the Consolidated Appropriations Act of 2021, which included the American Minerals Security Act, sponsored by Murkowski. This act includes such key provisions as codifying the methodology used to designate minerals as critical; new requirements for geological surveying and resource assessments; streamlining certain regulatory review processes; and authorizing research and development for recycling and replacement.
“Senator Murkowski has been an avid supporter and leader in not only passing legislation concerning critical minerals but in securing funding to do the work that is ongoing,” says Masterman. “Our own state government has been very supportive of this work as well, with the current administration recognizing the value of mineral development in all forms.”
This level of support is not a surprise. A McKinley Research (formerly McDowell Group) study commissioned in 2013 showed that the two-year construction of the Bokan mine alone would employ approximately 200 workers per year, with peak employment of 300. Annual payroll in 2013 was estimated at $20 million a year, with indirect and induced statewide employment equaling another 125 people with an addition payroll of $7 million.
Alaska is an abundant source of minerals, metals, and rare earth elements.
“This is based on the idea that the initial life of the mine is eleven years, but keep in mind that the extent of the mineral resource has not yet been defined,” says Schrider. “Based on eleven years, the study indicated that we would create 190 jobs per year with a payroll of $20 million and indirect and induced statewide employment of another 150 jobs with benefits of $8 million. That’s quite significant.”
There are also other areas of Alaska that contain critical minerals, including the Ray Mountains in northcentral Alaska, where Ucore holds claims; Trilogy’s Bornite deposit, which contains cobalt; and at Graphite One’s Graphite Creek project north of Nome.
As interest in REEs and other critical minerals continues to grow, so will interest in the 49th State.
“There’s not a huge push now from an exploration standpoint, but that’s mainly because these minerals are not as financially significant in terms of dollars on the table as other elements like copper, gold, and zinc. If the United States is consuming 15 tons of gallium a year, who is going to go out and start a gallium mine?” says Masterman, adding that it is more likely that a company will search for zinc deposits and then assess those deposits for gallium. “In the short term, the best approach may be encouraging existing mines and development projects to produce the critical minerals they contain, while advancing technologies to develop other mineral systems.
“But because critical minerals are of national interest, mining companies are starting to pay more attention,” he adds. “This might also change things on the permitting side; it might ease the permitting path for new mines because these are nationally recognized, important commodities.”
“There is a little bit of a race going on right now in the United States; there is ore being mined in California, but it is being sent to China for processing. There are various plans in the works from different companies to create processing plants, but what differentiates us is that while there are plants being considered that focus on either heavy REE or light REE, we will have the ability to process both.”
In This Issue
The Corporate 100
Alaska Business has been celebrating the corporations that have a significant impact on Alaska’s economy since 1993. At the time, the corporations weren’t ranked as the list didn’t have specific ranking criteria. Instead, the Alaska Business editorial team held long, detailed, and occasionally passionate discussions about which organizations around the state were providing jobs, owned or leased property, used local vendors, demonstrated a high level of community engagement, and in general enriched Alaska.