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
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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 , 7008, 7009)
Defense Directorate of Trade Controls Registered

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

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
~ 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)
-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
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
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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 Webmagnetics.com

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

10. Global Metal Production 2008 - Record Year
Item
2008 Mine Prod.
(Metric Tonnes)
Raw Steel
1,360,000,000
Uranium (2007)
41,279
Pig Iron
958,000,000
Lithium
27,400
Aluminum
39,700,000
Silver
20,900
Copper
15,700,000
Cadmium
20,800
Manganese
14,000,000
Bismuth
5,800
Zinc
11,300,000
Boron
4,100
Lead
3,800,000
Gold
2,330
Nickel
1,610,000
Selenium
1,590
Magnesium
808,000
Zirconium
1,360
Strontium Materials
512,000
Tantalum
815
Molybdenum
212,000
Yttrium (2001)
600
Antimony
165,000
Indium
568
Rare Earths (mixed, oxides)
124,000
Palladium
206
Cobalt
71,800
Platinum
200
Vanadium
60,000
Rhenium 45
Niobium (Columbium)
Rhodium 30
Tungsten
54,000
Hafnium 25
-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
Courtesy:
Jack Lifton
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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
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12. (Im)balance of Supply-Demand
Forecast Global Demand for Individual Rare Earths in 2014 (±15%)
(Im)balance of Supply-Demand
- Air Products O2, N2 -steel
-Reduce use of higher demand
-Increase use of lower demand (Ce, Sm) – unsold material = cost, wildcard
-Thorium?
Rare Earth Oxide
Demand
Supply/Production
REO Tonnes %
Lanthanum
51,050
28.40%
54,750
26.90%
Cerium
65,750
36.50%
81,750
40.20%
Praseodymium
7,900
4.40%
10,000
4.90%
Neodymium
34,900
19.40%
33,000
16.30%
Samarium
1,390
0.80%
4,000
2.00%
Europium
840
0.50%
850
0.40%
Gadolinium
2,300
1.30%
3,000
1.50%
Terbium
590
0.30%
350
0.20%
Dysprosium
2,040
1.10%
1,750
0.90%
Erbium
940
1,000
Yttrium
12,100
6.70%
11,750
5.70%
Ho-Tm-Yb-Lu
200
0.10%
1,300
Total
180,000
100%
203,500
100.00%
Source: Dudley J Kingsnorth
IMOCA 2009
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13. Rare Earth Supply-Demand
Source: Industrial Minerals Company of Australia
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14. Rare Earth Prices -Fe, Co, Tb, Ce, Au, Re price comparisons
-REE price disparities ($3/kg-$500/kg pre July 8, 2010, $10-12/kg avg.)
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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?
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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
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17. Questions www.electronenergy.com www.usmagnetmaterials.com
Electron Energy Corporation
924 Links Avenue
Landisville, PA 17538
(717)
Peter C . Dent (717) direct (610) cell
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