Applicant Organization: Implementation Agent:

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Rare Earth Elements

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Rare Earth Elements

• Rare earths are enablers • Various forms of co-deposit in mineral ores• These elements exhibit special electronic,

magnetic, catalytic and optical properties • They can have a profound effect on the

ultimate performance of complex engineered systems

• REEs can be divided into two broad categories

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Rare Earth Elements

• REE: 17 elements in total• Lanthanoid series plus two related elements in the

periodic table (Sc and Y)• Categorized according to their electronic configuration,

physical and chemical properties

Heavy REE (HREE) ： Sc, Y, TbLu (21, 39, 65-71)

Light REE (LREE) ： La Gd (57- 64)

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REEs Applications in Hong Kong

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REEs Applications in Hong Kong

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REEs Special Applications

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REEs Value Adding Chain

RE Mineral Ore

Grinding and Milling

Floatation/Separation

Separated REMs/REOs

Electronics

Data Storage

Microsensors

Display

Permanent Magnet

Battery Alloy

Auto parts

Critical Components

Catalyst

Polishing Powder

Phosphors

Water Treatment

Sputtering Targets Master Alloy Fine ChemicalsRE intermediate specialty materials

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Market of REEs

• Global production of REEs reached 129,000 tonnes (market value of US$17.5 billion)

• Demand on raw REEs is forecasted to increase by 56% each year in the next five years

• China alone constitutes 92% of global production of raw REEs in 2011

• Manufacturing of high-tech products require the use of refined and purified REEs-based specialty intermediate materials

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Market of REEs

• China is also the major consumer of REEs

• China has more than 50% REEs exported to overseas high-tech economies (e.g. Japan and USA)

• Implementation of RE export restriction puts China in a strategic advantageous position

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Problems vs Opportunities

RE Technologies in China

• China mainly export primary RE raw materials to overseas high-tech

economies (e.g. Japan and USA)

• Major advanced RE processing technologies owned by overseas companies

• Materials purity needs improvement to meet high-tech requirements

• Need technical breakthrough to realize benefit from the most value-adding

step – production of RE intermediate specialties

Accelerating Global Demands on REEs

• Raw materials of innovative, high-tech and lucrative products,

– Tablet computers, smart phones, 3D televisions, hybrid vehicles, etc.

Export restrictions

• China is now in an advantaged position (Export quota ~30,000 tonnes) only if

technologies are available for processing REEs-based materials

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Feasible for Hong Kong to establish REEs-based

specialty intermediate materials processing centre?

Feasible for Hong Kong to establish REEs-based

specialty intermediate materials processing centre?

REEs Market by Applications

13Global Demand for Rare Earths by Industry Through 2016 (Metric Tons)

(Source: BCC Research )

Master Alloy

Fine Chemicals

Rare Earth Oxide Demand by Application (Metric Tons)

RE Magnets

RE Magnets

Sputtering TargetsMaster

Alloy

Fine Chemicals

High Potential Applications

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Master Alloy (RE Magnet)

Sputtering Targets

Fine Chemicals

Industries of Electronics, Lighting and Display and Automotive Components:• Intermediates with highest potential: Phosphors, autocatalysts, sputtering targets of RE oxides and metals, permanent magnets

• High value-adding • Large market share • Expanding rapidly• Remain strong market share and growth rate

Recommended REEs IndustryDynamics in Hong Kong

High-Tech Industries

ElectronicsLighting/DisplayAutomotiveJewelleryToolingMedical DeviceWatch & Clock

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Refining Process of Rare Earth Fine Chemicals

A flowchart for rare earth element production process 17

Suppliers for Fine Chemicals

Suppliers for Fine ChemicalsSuppliers Country % of REO WebsiteHEBE Corporation Ningbo, China 99-99.9 http://www.hebechina.com/index.html

Double Pilots Group Holdings Co., Limited

Guangdong, China

99-99.9 http://www.buildingmaterials-china.com/manufacturers/double_pilots_group_holdings_co_limited-m10219999996496832149370775.html

Shin-Etsu Chemical Co., Ltd.

Japan 99.9-99.9999 http://www.rare-earth.jp/e/index.shtml

Advanced Material Japan Corporation

Japan 99.9-99.9999 http://www.amjc.co.jp/english/company-1.html

Tandof Global Limited

London, UK 99-99.999 http://www.tandof.com/home

American Elements USA 99-99.999 http://www.americanelements.com/usoper.html

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LED Phosphors Production

• Global market: 9,000 ton of REOs was used in LED category

RE Fine Chemicals

RE Phosphor

LED Products 19

Overview of Phosphors Processing Technology

• Solid-State Reaction– Sintering at around 1400-1600 for 2-4 hours℃

• Solution-based Chemical Synthesis– Hydrothermal Synthesis– Chemical Co-Precipitation– Sol-Gel Synthesis– Combustion Synthesis

• Freeze Granulation

• Europium, Terbium and Yttrium phosphors globally at

450,420, and 14,000 metric tons per year, respectively.

• High levels of purity of REOs are necessary (>99.99%)

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Overview of Phosphors Processing Technology

• Quality and Purity of Phosphors are critical to the display/lighting performance

• Limitations in current production in China– Necessary to improve process

knowhow of high grade phosphors using high purity REO

– Some formulations are patented– Quality control issues

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Rare Earth Catalyst Production

• Global market: REO catalysts are used on fluid cracking and automobile catalytic converters totaling 27,400 tons

Fluid cracking catalysts used in petroleum refining industry

REO catalysts used in automotive catalytic converters 22

Overview of Catalysts Processing Technology

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Overview of Catalysts Processing Technology

(A) Tabletting (B) Extrusion

(C) Granulation (D) Spray Drying24

Overview of Catalysts Processing Technology

• Limitations in current production in China– Necessary to improve process knowhow of high purity catalysts

to prevent poisoning– Many catalysts technology are patented by overseas suppliers– Quality issues from lack of experience and technology– Need a long development time for qualification in global

automotive industry

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Rare Earth Fine Chemicals Technologies

• Separation and Purification Technologies into Purified Metals– Rare Earth Industries (REI) (www.rareearthindustries.com), Canada

– Shin-Etsu Chemical Company Limited (www.shinetsu.co.jp), Japan

• Stabilization of High-Efficiency Rare Earth Doped Powders for White LEDs– Osram Sylvania (www.sylvania.com), Germany

• Rare Earth Based Nanomaterials– Antaria Limited (www.antaria.com), Australia

– The University of Central Florida Research Foundation (www.research.ucf.edu), USA

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Overview of the Global Sputtering Target Market

• 1.16 million sputtering targets have been sold in 2011

• 60% of global revenue generated by trading sputtering targets has take place in Asia-Pacific regions, Japan and China are two most significant stakeholders

• Used in wide range of industries– electronics, lighting and display industries

– Energy sector, including automotive battery and solar cells

Sputtering Targets

Applications in electronics, lighting and display industries and energy sector

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Production Technologies of Sputtering Target Materials

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Production Technologies of Sputtering Target Materials

Melting and casting(1)*Vacuum Induction Melting (VIM) Major VIM machinery suppliers: Consarc Engineering (UK), Inductotherm Coporation (US),

Fuji Electric Thermo Systems (Japan) (2) Continuous Casting

Powder Metallurgy(1) Atomization

Gas atomization, Water jet atomization(2) Blending

Compaction and sintering*Cold/Hot isostatic pressing (CIP/HIP), Spark Plasma Sintering(SPS) Major HIP equipment suppliers : Avure Technologies (US)

Pressure Technology Inc. (US)

Bodycote Heat Treatment (UK) Heat treatment

(3) Finished operationsMachining, Plate bonding

Spray Technology(1) Induction melting(2) Gas atomization(3) Spraying on support (preform)(4) Compacting Major Supplier : Kobelco (Japan)

* Critical technology / equipment* Critical technology / equipment29

Overview of the Global Master Alloy Market

Master Alloy

Permanent MagnetsWide range of applications such as electronics and automotive component industries

• Global production of rare earth permanent magnets are around 92,000 tons in 2011• Incorporated into electrical motors and generators• Used for sensors, loudspeakers, couplings etc.• Critical technologies patented by Japan and US companies

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Production Technologies of Master Alloy

Side-opening type small scale VIM furnace

VIM and casting furnace (5kg) VIM and casting furnace (250kg)

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Limitations of Sputtering Targets & Master alloys

• Limitations in current production in China– Some processing equipment required oversea export license

such as Plasma Spark Sintering, plasma spraying and large scale high vacuum VIM furnaces

– Necessary to improve process knowhow for high purity target materials and metallurgy of RE alloys

– Quality issues from lack of experience and technology– Need a long development time for qualification in high-tech

electronic industrial application

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Demands in HK

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• Consumption of Sputtering Targets in Hong Kong Industries

• Consumption of Rare Earth Permanent Magnets in Hong Kong Industries

Demands in HK

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• Consumption of Rare Earth Phosphors in Hong Kong Industries

• Consumption of Rare Earth Automotive Catalysts in Hong Kong Industries

Rare Earth Supply Chain

• The supply chain of RE industry: (1) Mineral ore (2) Mineral concentrates (3) Individual RE

products (4) Functional materials (5) Components

(6) End products (high-tech industries).

• In the upstream stages: (1) Mineral ore and (2) Mineral concentration,– involved are mining and refining – resource consuming and not environmental friendly– less economic benefit

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(1) Mineral Ore (2) Mineral Concentrates

(3) Individual RE products

(4) Functional Materials

(5) Components(6) End Products (high-tech industries)

• Downstream stages, (4) Functional materials and (5) Components– involved are purification and materials processing – high-tech industries – more environmental friendly processes and allows recycling of

the processing materials.

• Downstream process have more economical beneficial 1:50-500

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Rare Earth Supply Chain

Industry Incentives

• Oversea experience & knowhow for RE downstream process not available in China

• Complete the gap in RE supply chain – Produce high value added RE downstream functional

materials & components using semi-finished RE metal concentrate from China

• Provide a stable supply of RE functional materials to China’s high-tech industries

• Enhance economic growth in HK

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Opportunities for HKSAR

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Incentive for Overseas Partners

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Incentive for OverseasPartners

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Build up Local Expertise

• Advantages of local expertiseAdvantages of local expertise– Not labour intensive, need skillful local engineers – Good engineering ethics, focus on duty and responsibility – Worldwide reputation in IP and technology licensing

• Short term - Overseas partnersShort term - Overseas partners – Shorten technology upgrade time and break down critical

technology barrier– Platform for training and practice of local engineers

• Long term - Strategic planningLong term - Strategic planning – Train up local engineers with technical knowhow &

experience

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Environmental Aspects

• Starting Materials are min 99 % pure without radioactive contamination

• Only final purification and materials processing needed

• Waste treatment is not difficult for less than 10 tons waste water per day (typical figure for 1 ton RE production)

• Solid residues are recyclable• Little or no exhaust gas

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Benefits

• RE functional materials / components re-import to China high-tech industries CEPA arrangement

• Economic of additional hundreds to thousands millions US$

• Short Lead Time with oversea partners– Oversea partners’ experience close up technology gap– Quick startup and not from scratch– Good production image from oversea partners– Shorten qualification requirement

• Diversification to high-tech job market44

Next Steps

• Development of a 5-10 years RE Industrial Roadmap in HK– Time frame for R&D, infrastructure,

partnerships– Products types for best technology &

economic outcomes– Critical steps – product certification and

evaluation schemes

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Next Steps

• Initial Industrial Development– Focus on electronic, automotive components,

lighting and display– Demands on sputtering targets, magnetic materials,

permanent magnet and phosphors

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Government Support

• Investment policyInvestment policy– RE Industrial Startup funding– Tax refund

• LogisticLogistic– Reformulate industrial estates scheme to facilitate

needs of RE industry e.g. Junk Bay land space.

• Engineering talentsEngineering talents– Establish internship programme / scholarship /

collaboration with universities to train young engineers

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