Overview of Rare Earth Elements in Indonesia

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Earth Elements (REEs) have become a hot mineral commodity set, particularly in the wake of China s emergence as the largest world supplier, enacting controversial restrictions that cut REE exports by

1 By Samuel Lolon Staff Mining Engineer, Golder Associates Inc. Denver, Colorado, USA Fadli Rahman Mineral and Energy Economics, Colorado School of Mines, Golden, Colorado, USA Overview of Rare Earth Elements in Indonesia Introduction Over the last decade, Rare Earth Elements (REEs) have become a hot mineral commodity set, particularly in the wake of China s emergence as the largest world supplier, enacting controversial restrictions that cut REE exports by 72 percent. China currently boasts about 50 percent of global reserves, supplying around 95 percent of the world s rare earth metals. As the world s largest exporter, the cut means less supply and higher market price. Other countries with significant REE deposits include the United States, Australia, South Africa, Brazil, Malaysia and India. Periodic table of the 17 rare earth elements Group Period H Li Na K Rb Cs Fr (223) 4 Be Mg Ca Sr Ba Ra (226) Source: Sc Y La Ac (227) Ti Zr Hf Rf (257) 58 Ce Th 232 Nonmetal Alkali metal Alkaline Earth metals Transition elements Other metals 23 V Nb Ta Db (260) 59 Pr Pa (231) 24 Cr Mo W Sg (263) 60 Nd U (238) 25 Mn Tc (98) 75 Re Bh (262) 61 Pm (147) 93 Np (237) 26 Fe Ru Os Hs (265) 62 Sm Pu (242) 27 Co Rh Ir Mt (266) 63 Eu Am (243) Metalloids Halogenes Noble gases Lanthanides Actinides Ni Pd Pt Ds (271) 64 Gd Cm (247) 29 Cu Ag Au Rq (272) 65 Tb Bk (247) 30 Zn Cd Hg Uub (285) 66 Dy Cf (249) B Al Ga In Tl Uut (284) 67 Ho Es (254) C Si Ge Sn Pb Uuq (289) 68 Er Fm (253) N P As Sb Bi Uup (288) 69 Tm Md (256) O S Se Te Po (210) 116 Uuh (292) 70 Yb No (254) F Cl Br I At (210) 117 Uus 0 71 Lu Lr (257) 18 2 He Ne Ar Kr xe Rn (222) 118 Uuo 0 146

Occurrence of rare earth elements in Indonesia Current reserves, existing mining and processing methods, economic prospects, and

resources. The majority of information is obtained from non-indonesia authorities databases. LOCATION Source: www.usgs.

aerospace, and defense system, among others.

efforts to find more of REEs through research and development.

However, the authors sense a growing interest of Indonesia s Ministry of Energy and Mineral Resources in REEs, including the development

Geology and exploration Rare earth elements are neither rare, nor earth says Stephen Castor, a retired research geologist with the Nevada

2 Occurrence of rare earth elements in Indonesia Current reserves, existing mining and processing methods, economic prospects, and alternative added value of REEs in Indonesia described here rely heavily on existing public data, in addition to scientific and commercial resources. The majority of information is obtained from non-indonesia authorities databases. LOCATION Source: REE are considered critical to industries producing high-technology applications, ranging from computers, smart phones, cars, aerospace, and defense system, among others. Realizing the prominence REEs will likely enjoy through the foreseeable future, many countries including Indonesia have been increasing efforts to find more of REEs through research and development. Currently, Indonesia does not rival other countries noted above in terms of reserves. However, the authors sense a growing interest of Indonesia s Ministry of Energy and Mineral Resources in REEs, including the development of alternative supplies in the past few years. Geology and exploration Rare earth elements are neither rare, nor earth says Stephen Castor, a retired research geologist with the Nevada Bureau of Mines and Geology in the United States. The name rare earth dates back to the late 18 th century marking what to be considered the first discovered of rare elements out of earth material. Despite the name, rare earth elements are relatively abundant in the Earth s crust. For example, the two least abundant elements are nearly 200 times more common than gold. The more common elements are usually found in industrial metals such The bucket wheel dredge fleet at PT. Timah Tbk s site 147

3 Potential REEs in Indonesia and exploration status Province Location REE minerals Ore minerals Deposit type Deposit status North Sumatra Banda Aceh Monazite Riau Islands Singkep Island Monazite, Xenotime, Allanite Jambi Bukit Duabelas Monazite Bangka-Belitung Islands Bangka-Belitung Islands Bangka Island Belitung Island Monazite, Xenotime, Allanite Monazite, Xenotime, Allanite as copper, zinc, nickel, molybdenum, tungsten, tin or lead. However, the nature of elements that often occur as a byproduct or secondary to major minerals and generally of small concentrations has led to REE to be perceived as rare. The elements are rarely concentrated as a mineable deposit. In addition, complex and costly separation and refinement is required to process the elements, rendering them sub-economic. Rare earth elements include 17 (seventeen) chemical elements, with 15 within the periodic table as Lanthanides group plus Y (yttrium). Some references categorize Sc (Scandium), positioned above the yttrium in periodic table, as REE, including The International Union Titanium magnetite, Zircon Cassiterite, Ilmenite, Pyrite, Marcasite, Hematite, Rutile, Zircon, Tourmaline Ilmenite, Magnetite, Zircon, Cassiterite Cassiterite, Ilmenite, Marcasite, Hematite, Rutile, Zircon, Tourmaline Cassiterite, Ilmenite, Marcasite, Hematite, Rutile, Zircon, Tourmaline Placer, shoreline Placer, shoreline Placer, Shoreline Placer, Shoreline Placer, Shoreline Occurrence Produced in the past as a by-product of tin (Sn). Occurrence Produced in the past as a by-product of tin (Sn). Produced in the past as a by-product of tin (Sn). West Kalimantan Kembajan Mountain Monazite Unknown Placer, Shoreline Occurrence Irian Jaya Momi River Xenotime, Monazite Zircon N/A Occurrence; earlier exploration indicated high radioactive elements. of Pure and Applied Chemistry (IUPAC). The elements are all metals and either have similar chemical or geological properties. Figure1 shows REE coding, and their location in the chemical periodic table. In general, REE occur within and are associated with alkaline rocks, carbonatites, and other igneous rocks. The elements can also be found in placer deposits, sediment deposits where the igneous rocks intensively altered, ironoxide copper-gold deposits, and a variety of phosphate deposits. Geology and occurrence of REEs There have been many extensive studies conducted as efforts to understand the occurrence of REE. Even so, there are still a few elements particularly uncommon ones that remain poorly understood. It is widely accepted that REE are derived by 2 (two) processes as primary or secondary deposits. The primary deposit consists of igneous rocks containing significant amount of REEs while the secondary deposit exists from the primary concentration being weathered and transported: the process that separates the elements from heavy sediments due to sorting by gravity. These deposits are called placers. REE can also be derived from melting of igneous rocks in the Earth s mantle. Rock material is typically made up of various minerals with different melting temperatures. As the temperature increases beyond some minerals melting temperature points, which may include REE, will melt and separate from the host rock. Fractional crystallization is another mechanism of REE accumulation. This occurs when magma cools down and slowly forms crystal at varying levels, depending on melting temperature. REE deposits can occur in many places including, tropical climates. In typically tropical wet conditions and hotter ambient temperature, igneous rocks are more frequently weathered and altered to form laterite and iron-aluminum-rich layer over the unweathered bedrock. China, Kazakhstan, and Indonesia all exhibit these types of deposits. Exploration status The critical status of REE can be depicted by the increasing efforts shown by many countries, including Indonesia, to find more REE deposits or alternatives in substitution. Strong demand, but short supplies made shorter after China s export restrictions, has led toa substantial increase in REE exploration and mining. 148

Satellite imagery can be useful in finding most substantial REE deposits. This is often the recommended diagnostic in the initial stage of exploration.

4 Satellite imagery can be useful in finding most substantial REE deposits. This is often the recommended diagnostic in the initial stage of exploration. The deposits are generally circular on plan view, otherwise clustered along nearlinear belts. Exploration using airborne magnetic, radiometric and gravity surveys may be recommended to locate REE deposits. Many deposits, particularly carbonatite host rock, are surrounded by darkcolored mafic alkaline rocks, which in a big scale can be seen as a magnetic bull s eye with rings around it. REEs are complex in mineralogy and chemical makeup, commonly radioactive. Indeed, radioactive emission can be used to detect REE occurrence. With current technology, geochemical exploration is the main method for REE exploration when more detailed information is required, because most REE are heavy and resistant (resistant to what?). The detail information includes grade, density, resource tonnage, and hardness for extraction. Indonesia is not as promising as China and the United States, or other countries in Southeast region such as Vietnam or Malaysia in terms resource occurrence. Figure 2 represents the principal occurrences of REE deposits found in Indonesia (sourced from the U.S. Geological Survey). Monazite and Xenotime are two most minerals found in Indonesia region. Both minerals were formed as placer deposits and occur as by product of major mineral with higher concentration such as tin. The more detail list of this past and current occurrence including potential deposit through exploration is shown in Table 1. As the producer of placer tin, Bangka and Belitung Islands have been known to have association with REE deposits, particularly Monazite and Xenotime. According to the Indonesia s Center for Geological Resources, Monazite mineral was estimated at nearly 186 tons in Kundur and Kampar are two major locations for the mineral, in addition to Bangka and Belitung Islands. REEs can also be associated with Zircon, Placer Gold, Uranium and Bauxite ore deposits. Uranium ore deposits in Rirang, West Kalimantan indicated the prospect of REEs to the tune of tons of measured resource and 60.5 tons of indicated resource (Suprapto, S., 2009). In West Tapanuli, an early exploration conducted by a team from Indonesia Geology Agency indicated potential REEs associated with Zircon deposit (Kisman, Widodo, W., 2011). Using simple volumetric calculation, the REEs was estimated at 4.4 million tons which included major The Molycorp s Mountain Pass open pit mine, the largest producer of rare-earth metals in USA 149

5 elements of Cerium (Ce), Lanthanum (La), and Praseodynium (Pr). The occurrence of REEs has also been associated with geothermal activity in Indonesia. A study within the complex of the Dieng Geothermal Field in Central Jawa shows a potential trace of REEs ranging from 0 to 10 ppm (Herman, D.Z., 2009). This study has opened door to potential findings at other operating geothermal fields in Sumatera, Sulawesi, and Jawa that have not yet been subjected to REE exploration. A more recent study reported the occurrence of potential REE in the weathered granitic rocks in Bantimala complex, South Sulawesi (Maulana, A., Watanabe, K., Yonezu K., Imai A., 2011). The exploration and analysis used the XRF method and a geochemical study. The total concentrations of various REE vary between 200 ppm to 350 ppm in the parent rocks, with higher concentrations in weathered rocks occurring within an area that approximately covers 80,000 ha. The weathered material was found approximately 7-10 meters thick. Mining and processing methods In the past, most REEs in Indonesia are produced as by-products from the main commodity such as gold, copper or tin. By-products are secondary outputs from a process not considered economical for further separation due to costly processing cost and thus ending up as stockpile material. Indonesia, through PT. Timah Tbk, the state-owned enterprise, has recently started a pilot project to process these by-products and produce about 50 kilograms of REEs (mainly Lantanum, Serium, Praseodinium, Neodinium) per year. Mining method There is no special technique required to mine REE deposit. The mine can be a pumping process with an off-shore suction boat made from converted fishing boats, or a modernized mechanical method such as shovel. There are many considerations taken into account when selecting the best mining application. However, the mining method is generally determined by the type of host rock deposit. The open pit is the most common mining method for primary deposit near the surface such as those associated with molybdenum, copper, zircon etc. Underground type is selected for deposit at substantial depth. The Mountain Pass mine in California, USA is an example of REE excavation by open pit mining (Figure 3; The Bokan-Dotson ridge REE project in Alaska is one of many being developed for underground mine ( A dredging method which uses a bucket to dredge the deposit, dumping it to a certain location, is more appropriate for sediment and alluvial deposits such as placer tin or gold. PT. Timah Tbk uses this method at its site in Bangka and Belitung Islands ( In general, the mining method for REE will not differ from other techniques used for metals, non-metals, or alluvial mining. Significant difference lie Global REE production history Production, metalic tons Source: essentially in processing and refining method, which was previously considered the drawback of REE requiring costly technology and processing. Processing method In general, there are few major factors taken into consideration in selecting a processing method: deposit type and nature, composition, and the process impact on social and environmental values. Primary processing steps include separation and concentration from the host rock in acidic or alkaline solution usually with crushing and separation by flotation (magnetic or gravimetric, depending on the elements and host rock type). Subsequently, the process involves chemical and thermal reactions using hydrometallurgy methods (e.g., leaching, extraction, precipitation). Further processing includes techniques such as metallothermic reduction to refine oxides or metal mixtures. As the principal REEs in Indonesia, Monazite and Xenotime ores can be separated and concentrated after series of grinding using magnetic, gravimetric, or flotation depending on Global Rare Earth Oxide Mine Production 140, , , , ,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,

7 reserve characteristics. The 70% sodium hydroxide (NaOH) can be used to digest the ore concentration producing hydroxides forms. The leaching process using HCl (Hydrogen Chloride) solution can be used to recover the soluble REEs in chlorides forms which subsequently processed with solvent extractions for final output of high purity REEs. Economic analysis of Indonesia REE prospect In the last couple of decades, we have seen a staggering increase of global REE usage in wide variety of industries. This is mainly due to significant development of technologies that depend on the REEs. The REEs possess characteristics like strong magnetism and catalytic properties, which currently are being used extensively in clean energy (i.e. LED lighting, turbine for wind energy, and panel for PV solar), the automotive industry (i.e. hybrid or electric vehicles), and industrial process plants (i.e. petroleum refinery). Being endowed with such advantageous characteristics, the production of REEs has increased dramatically: almost three-fold in less than two decades compared to its production in Figure 4 shows the history of global REE production from , which also depicts the dominance of China s supply in the industry. The temporary decrease of production in late 2000 was due to global economic slowdown that caused global metal demand to decrease significantly. In 2010, China accounted for the largest share with 97% of global production and 50% of global reserves (Humpries, 2013). China holds a firm grip on its market power in REE supply, and is expected to retain substantial market power even if somewhat diminished as the discovery and development of new deposits or substitutable technologies comes slow. The vital roles for REEs in future technologies have yet to be determined by economics, trade conditions, and policies. Larger dependence on REE is currently threatened by Chinese export restrictions (quotas and taxes) which imperil modern (highly REE reliant) technology development, particularly clean energy, in the face of growing demand for a greener world. If supply restrictions are sustained, policymakers may be compelled to impose future regulations that incentivize substitution towards alternative technologies. Therefore, it is essential to encourage trade liberalization for the global development of REEs. Indonesia s current market position and future path Compared to China s dominance in current REEs production and reserve, Indonesia s position in the market is considered negligible, even though byproduct productions and reserves exist in several areas across the country. As explained previously, the US Geological Survey reports few REEs occurrences in Sumatera Island (Banda Aceh, Bangka, Belitung, Bukit Duabelas, and Singkep) and West Kalimantan (Kembajan). Further, a potential deposit was found in Sulawesi and Papua or Irian Jaya islands (Jauhari and Kuntjara, 1991). However, this is considered minimal, and if there is no further exploration in the near future, Indonesia will remain minor player. There are three options for Indonesia to improve its exposure to REE markets: (1) enabling resources exploration, (2) adopting advanced tailing capture technologies, or (3) establishing a global scale REE recycling center. The first option exhibits the highest uncertainty, as no discoveries are guaranteed; with no assurance REEs will continue to have a significant role in future technologies either. The second option is more promising, although capturing mining tails will not increase significant amounts of production. Therefore, these two options provide lower potential to secure Indonesia s position in REE markets. Hence, this leaves Indonesia with the last and most feasible option: an establishment of global scale REE recycling center. Indonesia has growing potential in REE recycling with a remarkable boost of recycling activities in the past two years ( This upswing is a result of rising concern for the environment as well as upturn in domestic consciousness in recycling activities, particularly metal waste and scrap. This positive momentum towards recycling is a critical element to establish a global scale REE recycling center. It is now up to the Indonesian government to create effective policy towards achieving the goal. Other essential factors in determining this recycling option are (1) a relatively skilled and low cost labor force, (2) abundant land, and (3) friendly trade relations with principal players in REE markets. The first two factors are comparative advantages the Indonesians possess, which could further benefit the REE industry as it has been benefiting other industries. The last factor is a key factor to ensure continuous and robust foreign demand of the elements from the likes of the US, Japan, and South Korea. As all other industries, the progress of REE industry in Indonesia depends on the government s action in enacting policy and regulation. Supporting incentives should then be imposed to reinforce both upstream and downstream industries, and to strengthen domestic demand via growing manufacturing activities. If the Indonesian government remains passive and unassertive to the viable options, the rare earths will merely remain rare to Indonesians for the foreseeable future. 152

Atoms and the Periodic Table

Atoms and the Periodic Table Parts of the Atom Proton Found in the nucleus Number of protons defines the element Charge +1, mass 1 Parts of the Atom Neutron Found in the nucleus Stabilizes the nucleus