Investing in Neodymium

neodymium commodity

The light rare earth mineral Neodymium is present in monazite and bastnäsite ores. Chemists assigned the abbreviation Nd to reflect this element in the periodic table and the number 60 to reflect its atomic weight. The term "rare earth" is a misnomer in this case, as this element is commonly distributed in the earth's crust.

The name comes from didymos, Greek for twin, and neos, meaning new. It was a new metal extracted from the twin metal, didymium. Like all other lanthanide metals, neodymium oxidizes easily. It combines with oxygen to form neodymium hydroxide. If dissolved in sulfur, it forms neodymium sulfide. And when combined with nitrogen, it forms neodymium nitride.


Neodymium in History

Neodymium has never been found in nature in its metal form. It was first extracted from didymium by Carl Auer von Welsbach in 1885. He identified the metal through spectroscopic analysis but was unable to isolate a pure form of the metal. This didn't happen until 1925.

It was discovered that neodymium oxides produced a reddish orange glass. It came to be used for this purpose. Until Lindsay Chemical Division developed a large-scale ion-exchange purification process, neodymium was extracted from didymium through double nitrate crystallization. The new process allowed a high purity rating of 99%. This higher level of purity led to the use of neodymium in glass making as a purple colorant.

The desire to reduce the cost of permanent magnets in their products, led General Motors Corporation (GMC) and Sumitomo Special Metals to pursue a better, more cost-efficient formulation. In 1982, the combination of neodymium, iron and born was discovered. T he two companies developed separate types of magnets using the ability of neodymium to form two types of crystalline structures. These magnets are extremely strong and are capable of causing injury if two magnets are snap together and something is between them.


Current Sources of Neodymium

Most of the worlds neodymium supply comes from China, even though it is available in any region where there is monazite or bastnäsite. The U.S., Brazil, India, Sri Lanka and Australia are known to have regions containing these ores.


How Neodymium is Being Used Today

When neodymium is added to iron and boron, if forms one of the most powerful permanent magnetic materials available in the market. Melt spun Nd2Fe14B powder is available for bonded magnet manufactures from GMC's subsidiary Neo Materials Technology Inc. Hitachi Corp., which bought out Sumitomo, sells sintered Nd2Fe14B magnets. Because the sintered magnets are susceptible to oxidation, they are usually shielded with a protective coating such as nickel.

The development of these magnets has played a major role in many of the comforts we experience today. Every time you pick up a cordless drill, you are probably benefiting from a neodymium magnet. The permanent magnet motor is what keeps the drill going.

A neodymium magnet is probably essential to the functioning of your computer hard drive. Neodymium magnets provide the vivid images produced by magnetic resonance imaging (MRI) machines. And you will find ring magnets using this material in loudspeakers and headphones. Electrical power steering depends on neodymium magnets as do the drive motors for the new hybrid cars. For example, a Toyota Prius electric motor uses 2.2 lbs. (1 kg) or neodymium in each motor.

In addition to use in magnets, neodymium is a vital component in certain types of laser glass. Laser pointers use neodymium-doped crystals to generate high-powered infrared laser beams which can then be converted to green laser light in diode-pumped solid-state (DPSS) lasers or as laser pointers. Laser containing neodymium crystals may be used for a number of applications. Laser levels assist surveyors. Laser make it possible to drill and burn hole in materials that would otherwise be impossible to work with. Lasers can scan fingerprints and make computer identification with an existing bank of fingerprints almost instant. Lasers have welding and cutting applications. And of course, lasers are used to improve vision and skin texture.

Neodymium is also an important component in welder's and glass blower's goggles. The ability of this metal to absorb certain bands of the light spectrum obliterates the strong sodium emissions produced by these processes. Neodymium also allows astronomers to calibrate the spectral lines produced by distant stars.

Neodymium is also used to control the color of glass. A small amount of neodymium will remove the green color caused by iron contamination. The addition of neodymium to the glass used in lightbulbs, creates a whiter light.


Economic Value of Neodymium

Neodymium exists as 10 to 18% of the LREE mineral content of monazite or bastnäsite. At present, it is the rare earth element that the clean-air technologies are turning to. Why? Because the permanent magnets produced using this metal make the most efficient, lightest weight wind turbine generators. As China, the major producer of current neodymium supplies has aggressive plans to use its own neodymium supplies to pursue its own wind-powered electrical supply, there is concern that supply will fall and prices will rise.

Current value as of October 2010 have risen from just over $20/kg a year ago to over $90/kg. Most of the current price increase is due to the tight supply. As supplies increase from other sources outside of China, a price drop can be expected, yet even this should not be permanent as demand will continue to increase.


How to Invest in Neodymium

Neodymium belongs to a group of minor metals that some investors feel has a potential as a breakout investment opportunity. There are a number of ways to invest in neodymium.

  • » Invest in the mining companies that are mining rare earth minerals.
  • » Invest in the companies that are producing neodymium magnets.
  • » Invest in the companies developing neodymium and other rare earth element based technologies.


Future demand for Neodymium

The future demand for neodymium looks very strong. It is estimated that by 2014 neodymium will generate up to 50% of all revenue from the sales of rare earth metals.

As the rare earth mineral with proven capabilities to promote green energy strategies, the demand for this metal will continue to grow. The use of hybrid electric vehicles is certainly going to grow as will the use of wind power for electricity production.

Fears of shortages are already being voiced by Japan, as China has tightened its import quota to around 30,000 tons of rare earth metals for 2010. Japan, alone, expects to need 32,000 tons of the combined rare earth metals in 2011. The projected shortage is encouraging more companies to develop rare earth metal deposits.


How to Locate Mining Stock to Invest In Neodymium

The following list of mining companies and the stock exchanges they are traded on is the beginning of entering the world of rare earth element investments. This list has been narrowed down to companies that mine rare earth elements, including neodymium, though they may also mine other metals as well.


Aurizon Mines Ltd (AMEX: AZK)
Consolidated Abaddon Resources Inc (TSXV: ABN)
Eagle Plains Resources Ltd (TSX: EPL)
Gossan Resources Ltd (TSXV: GSS) (minor metals)
Molycorp Minerals LLC (MCP:NYSE)


Neodymium Quick Facts

  • » A 1 cm cube of neodymium would oxidize completely within one year.
  • » It is rumored that neodymium promotes plant growth.
  • » Samarium-neodymium dating has been used to compare the relative ages of rocks and meteorites.
  • » Neodymium dust is dangerous for several reasons. It is explosive. It can cause lung embolisms. If exposure is prolonged, it can damage the liver.


Chemical Compounds

  • » Neodymium Trifluoride (NdF3) - This form of neodymium is combined with yttrium to produce lasers with transitions between 1047 nm and 1053 nm. The resultant higher pulse energies allow for repetition rates of just a few kHz.
  • » Neodymium Aluminum Borate [NdAl3(BO3)4] - This form of neodymium is used in optics.
  • » Neodymium Chloride (NdCl2 or NdCl3) - The production of neodymium metal usually starts from this form. Also the production of Nd-YAG lasers and ND-doped optical fiber amplifiers use neodymium chloride as the chloride vaporizes and enhances the growth of silica-based fibers. Neodymium chloride also enhances plastic fiber development as well. It is used to produce organic films that are able to act as LEDs and color filters to improve the light spectrums reflected by the LEDs. Neodymium chloride also functions as a catalyst. It accelerates polymerization, the formation of long organic chains. It also works as a photocatalyst in paints, so they are "self-cleaning."
  • » Neodymium Tribromide (NdBr3) - Neodymium tribromate is also used in lasers, to color glass, but its primary application is in production of iron-boron permanent magnets.
  • » Neodymium Iodide (NdI2 or NdI3) - Neodymium iodide may be used as a discharge sustaining filler in mercury metal-halide HID lamps.
  • » Neodymium Trioxide (Nd2O3) - The form of neodymium is the most commonly used for doping glass. Applications include sunglasses, solid-state lasers, and welding goggles. Glass doped with neodymium trioxide will appear blue in sunlight and red under incandescent light. Neodymium trioxide, like neodymium chloride, will also act as a catalyst during polymerization.


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