Avalon Rare Metals Inc. (TSE:AVL) Industry Bulletin: Chinese Production of Dysprosium to Be Temporarily Halted in Three Mining Districts
Toronto, Sep 8, 2011 AEST (ABN Newswire) - In its ongoing efforts to provide you with broader communications and industry information, Avalon Rare Metals Inc. (
TSE:AVL) (PINK:AVARF) are pleased to issue this Industry Bulletin which provides its readers with an update and brief analysis on recently reported targeted rare earth production restrictions announced in China.
The state-run Xinhua News Agency reported Monday (September 5, 2011) that Ganzhou, the number one producer of dysprosium (Dy), a heavy rare earth that is vital to many magnet formulations, has ordered strict compliance with annual production quotas in three areas in southern China. Since they are believed to have already exceeded their annual quotas, production will likely be suspended until at least the end of the year.
Ganzhou, which produces dysprosium-based alloys in Jiangxi Province and elsewhere, sees potential for global dysprosium supply shortages in two to three years should China continue with its strict regulation of rare earth production.
The move comes despite the Japanese call for a softer Chinese approach to regulating rare earth production. Japan is concerned that reduced exports from China would lead to supply shortages for the metals and price hikes on products that use them. Alternative sources of dysprosium and other rare-earth metals will not be found quickly.
Rare earth production is active in the north, centering on the Inner Mongolia Autonomous Region, as well as in and around Jiangxi in the south. Production in the north has been controlled by major state-run companies, which have complied with the regulations. But down south, small and midsize operators have engaged in illegal production. To tighten control in the south, the Chinese government in January designated 11 locations in Jiangxi as mining areas subject to national planning.
Dysprosium is a fundamentally important additive in neodymium-iron-boron magnets (or Neo-Magnets), to raise the coercivity or strength, for demanding applications such as drive motors for hybrid electric vehicles and wind turbines (i.e. Dy allows the magnet to operate effectively at higher temperatures). Dysprosium additions to Neo-Magnets can represent as much as 6% of the weight of the magnet. The dysprosium addition also tends to improve the corrosion resistance of the magnet. According to Metal-Pages, dysprosium oxide FOB China is presently offered at US$2,300/kg, up from just US$100/kg two years ago.
International forecasters anticipate annual demand for dysprosium oxide of approximately 2,850 tonnes (+/- 20%) in 2105, for which there is expected to be a supply shortfall of 950 tonnes. Avalon's view is that its Nechalacho project, which is one of the world's largest and richest heavy rare earth deposits, will make a significant contribution to relieving the supply shortage when it is brought into production in late 2015. Avalon should produce approximately 270 tonnes annually of dysprosium oxide, and be, by far, the largest single producer of dysprosium in the world outside China.
About Avalon Advanced Materials Inc
Avalon Advanced Materials Inc. (TSE:AVL) (OTCMKTS:AVLNF) (formerly Avalon Rare Metals) is a Canadian mineral development company specializing in niche market metals and minerals with growing demand in new technology. The Company has three advanced stage projects, all 100%-owned, providing investors with exposure to lithium, tin and indium, as well as rare earth elements, tantalum, niobium, and zirconium. Avalon is currently focusing on its Separation Rapids Lithium Project, Kenora, ON and its East Kemptville Tin-Indium Project, Yarmouth, NS. Social responsibility and environmental stewardship are corporate cornerstones.
| ||
|
