Montague Makes Rare Earths Issue Murkier

Montague Makes Rare Earths Issue Murkier

The mining minister, Robert Montague, misunderstood, or deliberately ambiguous in his response to this newspaper's question what value Jamaica should be, in the future, in its bauxite mines, considering that the emergence of obvious new rare earths technologies makes it commercially feasible to extract rare earth elements (REEs)from bauxite waste.

In any case, Montague should have another shot at explaining Jamaica's position on this issue. At the same time, he should clarify the status of the joint venture agreement between the Jamaica Bauxite Institute (JBI) and Japan's Nippon Light Metals for the development of proprietary technology, and provide additional details about prospecting for stand-along reserves of the metals in Jamaica.

Despite the nomenclature, REEs composed of 17 metals are not particularly rare. This is just because they are not common in mineral deposits of important commercial value. So far, China has most of the world's known reserves, responsible for more than 60% of global production. This gives Beijing a significant strategic power in its technological relations with the United States and the West.

Because rare earths are essential to all kinds of technical equipment, including smartphones, powering electric vehicles, increasingly efficient batteries that store energy from renewable energy factories, and modern weapon systems. In 2013, the Japan Federation of Industries (JBI) and Nippon Light Metals signed a research agreement to advance the technology of extracting rare earth metals from red mud.

At that time, the transaction was seen as an important development with potentially significant strategic and commercial significance. According to reports, Japan spent more than US$3 million to build a laboratory at JBI.

Although there are statements about patent registration, there are few formal or specific updates about the project. Their hypothesis is that as rare earth prices fall, any innovation by Nippon Light Metals (JBI) will not be sufficient to achieve commercial viability.

The project has new significance, considering the possible announcement of Dada Holdings-the government's ultimate and operating partner of Noranda Bauxite 49%-Green Technology and the Canadian joint venture company Enervoxa to extract rare earth metals from wastewater from the oxidation of Dada The aluminum refinery is in Gramercy, Louisiana.

DADA boasted that it has "35 million tons of mineral-rich residual bauxite dry reserves" and intends to use Enervoxa's patented technology to produce more than 1 million tons of rare earth metals per year. All these residues come from bauxite mined in Jamaica. The proposed $800 million project will make a final decision next year, although the front-end project is underway.

After the announcement of the above statement, this newspaper proposes to review the basis of the bauxite mining export agreement reached between Jamaica and DADA Holdings. Normally, the production tax paid by bauxite/alumina companies operating in Jamaica is 7.5% of the average alumina output realized by the London Metals Exchange

However, the levy assumes base payment of US$5 per ton, or the lowest price paid by the company. However, the agreement reached with DADA 4 years ago reduced Noranda’s tax to US$1.5, and agreed that the company would pay the tax, or US$17.3 of EBITDA from Gramercy’s business.

The problem is not the bauxite that has been shipped to Gramercy or elsewhere. This is also not an attempt to obtain ownership of the remaining minerals after the ore is processed abroad-this seems to be a legal issue for Minister Montague's advice.

The real question is what ought to be done next in the new situation. In other words, we invite Jamaica to reconsider the value of its bauxite (especially when it is exported), and now it is possible to extract minerals other than alumina from bauxite. Regarding the wastewater remaining in Jamaica, the legislation can be adjusted to clarify that the further treatment of wastewater and the extraction of minerals, such as rare earths, are similar to major mining activities and attract different realities.

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