Editorial | Rare earth elements and red mud

Donald Trump’s plan for American control of Ukraine’s rare earth elements (REE) should be an impetus for the Jamaican Government to clearly legislate the country’s ownership of minerals that remain in red mud.

Or, alternatively, as this newspaper has long argued, royalties charged for mining the island’s bauxite must be set at levels to appropriately compensate for these minerals, including rare earth elements, that are still in the residue after bauxite is refined into alumina, and over which the producers retain control and access. This is particularly relevant in cases where bauxite is mined for export, rather than refined on the island.

Rare earth elements – there are 17 in the group – are not particularly rare, experts say. However, they are not generally found in large, commercial-scale deposits. In that sense, they are not plentiful.

There are two other major factors that enhance the economic and geostrategic importance of these minerals.

First, they are essential components in many of today’s high technology and high-precision products – from mobile telephones to missile guidance systems, and for batteries used in electric vehicles and power grids.

Then there is the China factor. Up to the beginning of March, China had about a third of the world’s known REE reserves. Its companies controlled 60 per cent of global production and 85 per cent of processing capacity worldwide.

Indeed, China’s production of 240,000 metric tonnes of REEs in 2023 was over five-and-half times America’s 43,000 metric tonnes, which made the US the world’s second-largest producer. Last week, China confirmed the discovery of another 1.15 million tonnes of the elements in its southwestern province of Yunnan, adding to its previously estimated reserves of 44 million tonnes.

DOMINANCE STRENGTHENED

The bottomline: China’s dominance has strengthened with respect to this strategic resource that is of importance in its economic and geopolitical competition with the United States and the West.

That is part of the backdrop to which Mr Trump has demanded suzerainty of sorts over Ukraine mineral deposits, which he pitched as a way for Ukraine to repay America for the weapons it supplied to fight its war with Russia.

In 2022, a Ukrainian government official estimated that the country had five per cent of the world’s most “critical minerals”, including rare earth metals. However, those estimates have not been verified, and much of what exists would be in territories occupied by Russia, which itself is estimated to have about 12 per cent of the world’s REE reserves.

Mr Trump has said that the US is close to concluding the controversial mineral deal with Ukraine. “One of the things we are doing is signing a deal very shortly with respect to rare earths with Ukraine,” the US president said last week.

Jamaica has no specific deposits of REEs, but the elements exist in bauxite and can be extracted from the effluent left by the alumina production process. This effluent, called red mud, is stored in large ponds near the island’s alumina refineries.

The technology has long existed to extract rare earth minerals from red mud, but not at a cost for it to be economically competitive.

CLOSE TO BREAKTHROUGH

In 2013, the Jamaica Bauxite Institute (JBI) and Japan’s Nippon Light Metal, believing that they might be close to a breakthrough, experimented on new extraction techniques at a lab at the JBI compound in Kingston. While their systems appeared to have been promising, it obviously did not make sufficient progress to be economically feasible.

Five years ago, years after the JBI-Nippon initiative, DADA Holdings, which then owned the old Kaiser alumina refinery at Gramercy in Louisiana, announced an agreement with a Canadian clean-energy outfit, Exnervoxa, for the extraction of REEs from 35 million tonnes of red mud at the refinery. The refinery is now Atlantic Alumina Company LLC.

The project did not get off the ground. Notably, however, the red mud that was intended to be used was from Jamaican bauxite shipped to Gramercy by what is now Discovery Bauxite Operations, a company that Atlantic owns with the Jamaican Government, and manages. Any rare earth element extracted from the Gramercy red mud would have been a gain to the company from a resource whose original price did not reflect this additional value.

In 2023, Bobby Stewart’s mineral prospecting outfit, Geophysx, announced plans for testing the feasibility of extracting REEs from red mud domestically. It was not clear, however, what was the planned scale of the research, who were Geophysx’s partners (if there were any), and the status of the long-term legal ownership of the red mud once it is discharged from an alumina refinery.

Global events, not least the advent of Donald Trump, require that Jamaica re-evaluate the status of its bauxite and alumina industry, including the place of REEs within it. Indeed, emerging technologies could possibly, if properly packaged, burnish the sector’s future.

The Government, though, has first to put its house in order.