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Strategies for More Effective Critical Materials Use 3 December 2010 Trans-Atlantic Workshop on Rare Earth Elements and Other Critical Materials for a.

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Presentation on theme: "Strategies for More Effective Critical Materials Use 3 December 2010 Trans-Atlantic Workshop on Rare Earth Elements and Other Critical Materials for a."— Presentation transcript:

1 Strategies for More Effective Critical Materials Use 3 December 2010 Trans-Atlantic Workshop on Rare Earth Elements and Other Critical Materials for a Clean Energy Future Peter C. Dent VP Business Development Electron Energy Corporation 924 Links Avenue, Landisville, PA 17538

2 Real World Views “The purpose of a business is to serve a customer” Peter F. Drucker “Effective” – “Do the Right Thing” Provide customer value – Fulfill a need – Better Performance – Lower Cost – Realistic expectations Solutions MUST make sense commercially Sustainable manufacturing & supply chains Environmentally responsible 212/17/20142

3 EEC’s Beginnings Marlin Walmer - innovator and pioneer in magnet materials Founded Electron Energy Corporation in 1970 First non-captured commercial Samarium Cobalt (SmCo) producer in the world Last US Rare Earth magnet producer (Samarium Cobalt or Neodymium Iron Boron - NdFeB) Marlin Walmer 1/11/29 – 12/12/99

4 About EEC Landisville, PA – 40,000 sq ft single site 118 employees Small Business One Modern Manufacturing Site Samarium Cobalt magnet producer ISO 9001:2000 Certified Compliance with DOD Domestic Preferences of Specialty Metals (DFARS 225.252-7003, 7008, 7009) Defense Directorate of Trade Controls Registered

5 5 Real World View of Magnet Materials Production WW Total Market Size $7B 2010, $15B by 2020 NdFeB magnets 72% Rare Earth Oxide Ore production 97% Rare Earth pure Metals nearly 100% Hard ferrites 66+ % Alnico ½ SmCo 63% Japan, US, European producers close plants, move production CHINA 5/18/2010IVEC 201012/17/20145

6 Typical Manufacturing Process for Sintered Rare Earth Magnets – Labor is predominant cost Magnetizing & Testing Induction Melting or co- reduction Ball milling or Jet milling To  m scales Sintering, Solution and Heat treatment ~ 200 - 500  m Crush into Pressing Grinding, lapping, honing, Or wire EDM Machining Raw Materials Sm, Co, Fe,Cu, Zr (SmCo) Nd, Pr, Dy, Fe, Co, B (NdFeB) Crushing

7 Criticality Matrix (US National Academies, 2008) This matrix was devised by the U.S. National Academies and published in 2008 in Minerals, Critical Minerals, and the U.S. Economy (2008). The matrix preceded by a detailed explanation of the conclusions from which it was created is (free) on the Internet at, Critical Minerals, and the U.S. Economy -Increase use of periodic table of elements -Semiconductors- 24 plus new elements used in 2000 and beyond -11.3 Tons/year per person non- fuel minerals in USA, - ? T/yr developing world -New inventions -Changing demographics 12/17/20147

8 Magnet Sales Worldwide Market is growing due to automotive & more uses, miniaturization People pay lots more for better magnet performance ($5.4/kg Ferrite, $90/kg Nd) Smaller magnets make smaller less costly systems Lower systems costs will increase market “More electric” means more magnets Data courtesy of

9 9 Material Usage Perspective 30 years ago? Mother nature’s gifts Unique properties Benefits vs. cost of replacement 9IVEC 20105/18/2010 Light Rare Earths (LRE’s) Heavy Rare Earths (HRE’s) 9

10 Item2008 Mine Prod. (Metric Tonnes) Item2008 Mine Prod. (Metric Tonnes) Raw Steel1,360,000,000Uranium (2007)41,279 Pig Iron958,000,000Lithium27,400 Aluminum39,700,000Silver20,900 Copper15,700,000Cadmium20,800 Manganese14,000,000Bismuth5,800 Zinc11,300,000Boron4,100 Lead3,800,000Gold2,330 Nickel1,610,000Selenium1,590 Magnesium808,000Zirconium1,360 Strontium Materials512,000Tantalum815 Molybdenum212,000Yttrium (2001)600 Antimony165,000Indium568 Rare Earths (mixed, oxides) 124,000Palladium206 Cobalt71,800Platinum200 Vanadium60,000Rhenium45 Niobium (Columbium)60,000Rhodium30 Tungsten54,000Hafnium25 Global Metal Production 2008 - Record Year Courtesy: Jack Lifton 12/17/201410 - A steel world -Recycling effectiveness of large vs. small, mid size - expectations -Large users volume, mature recycle -Rare metals have high price and big incentives

11 Rare Earth Mineral Production China REE worldwide reserves –2 years ago over 50% –today substantially less –Reason, more discoveries 100 plus potential sites for REE’s discussed for development worldwide 5-6 new non-Chinese mining operations will likely be developed Lots of investment is flowing to major REE producers –well funded –Downstream supply chain needs –Non-Chinese customers, OEM’s 12/17/201411

12 Rare Earth OxideDemand Supply/Production REO Tonnes% % Lanthanum51,05028.40%54,75026.90% Cerium65,75036.50%81,75040.20% Praseodymium7,9004.40%10,0004.90% Neodymium34,90019.40%33,00016.30% Samarium1,3900.80%4,0002.00% Europium8400.50%8500.40% Gadolinium2,3001.30%3,0001.50% Terbium5900.30%3500.20% Dysprosium2,0401.10%1,7500.90% Erbium9400.50%1,0000.50% Yttrium12,1006.70%11,7505.70% Ho-Tm-Yb-Lu2000.10%1,3000.50% Total180,000100%203,500100.00% Forecast Global Demand for Individual Rare Earths in 2014 (±15%) (Im)balance of Supply-Demand 12/17/2014IVEC 201012 Source: Dudley J Kingsnorth IMOCA 2009 12/17/201412 - Air Products O2, N2 -steel -Reduce use of higher demand -Increase use of lower demand (Ce, Sm) – unsold material = cost, wildcard -Thorium?

13 Rare Earth Supply-Demand Source: Industrial Minerals Company of Australia 12/17/201413

14 Rare Earth Prices 12/17/201414 -Fe, Co, Tb, Ce, Au, Re price comparisons -REE price disparities ($3/kg-$500/kg pre July 8, 2010, $10-12/kg avg.)

15 Core Issues What will be impact of new RE applications (wind power, Li vs. NiMH batteries, lighting, MCE refrigeration, To Be Invented) ? 1000’s of REE applications, how many can be helped? Who will make it to market profitably & sustainably grow over time? What will China do? –Wildcard factor, SEO’s Can private sector fix problems alone? 12/17/201415

16 REE Supply Core Strategies -Market Driven- Stockpile raw materials – price/availability disruptions Mitigate/Replace REE usage (short-medium term) –Incremental Process improvements (Kaizen – Japan NdFeB) –Better magnet technology (same flux with less material) => mitigate Hi electrical resistivity NdFeB, SmCo (DOE) Nanocomposites (NdFeB, SmCo) add 30% Fe New magnet systems (non REE) –Leapfrog, disruptive technologies Develop / Adopt Recycling with ROI Develop applications for Ce, Sm, Pr and others in over supply – grow business Secure long term reliable, sustainable supply Develop & recruit people to innovate Engage with US government to affect appropriate REE policies Move from Studies => Resource Allocation & Action Multi faceted, balanced, realistic public policy approaches & expectations Be EFFECTIVE 12/17/201416

17 Peter C. Dent (717) 459-1001 direct (610) 349-5525 cell Electron Energy Corporation 924 Links Avenue Landisville, PA 17538 (717) 898-2294 12/17/201417 Questions 17

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