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The Jamaica Bauxite Institute (JBI) has signed a Memorandum of Understanding (MoU) with Nippon Light Metal of Japan, for the establishment of a pilot project to extract earth elements from red mud.

This was disclosed by Minister of Science, Technology, Energy and Mining, Hon. Phillip Paulwell, in the House of Representatives on January 15.

Mr. Paulwell, who noted that the MoU was signed in September 2012, explained that the pilot project will be done to determine the scope of the proposed commercial project of the rare earth elements.

The pilot project has also been approved by the National Environment and Planning Agency (NEPA), and is awaiting final approvals from other regulatory agencies

“Nippon Light Metal’s ultimate objective is to extract some 1,500 metric tonnes per annum,” the Minister said.

He noted that the concentration of rare earth elements in minable quantities around the world is unusual, and the concentration of rare earth elements found in Jamaica red mud deposits are significantly greater than what is known about other red mud sites around the world.

“Rare earth oxides, the commodity that will be extracted are currently being traded at rates of up to US$3,500 per kilogram. When we compare that to alumina, which is now being traded at US$330 per tonne, it is clear that this source presents an opportunity Jamaica must pursue, and which must be managed in such a way that Jamaica and Jamaicans benefit significantly,” Mr. Paulwell said.

Rare earth elements or lanthanides are extremely valuable elements which require advanced technology for their extractions and include elements, such scandium cerium and dysprosium.

“Like many important technologies, rare earth elements source development may have environmental implications that must be identified and managed. The pilot plant study will seek to specifically map the potential impact on land, water, and air and the effect of neutralizing the by-products of rare earth element extractions,” Mr. Paulwell said.

The total amount to be invested in buildings and equipment for the pilot project plant is US$3 million, to be funded by Nippon Light Metal, which will also be responsible for the operating cost.

A number of Jamaican engineers and other workers will be employed on this project and Jamaica will benefit from the transfer of the knowledge.

Most significantly, the results of the pilot project will be owned in equal parts by the JBI and Nippon Light Metal. Further, any rare earth elements produced at the pilot plant will be jointly owned by the Government and Nippon Light Metal.

During this phase of the pilot, the government will begin negotiations with the Japanese company for the full commercialization of the project.

“This development has had the active involvement of the Government of Japan through its Embassy in Jamaica and its Ministry of Economy, Trade and Industry. Both the Government of Jamaica and the Government of Japan are fully behind this project,” Mr. Paulwell said.

He added that already, internationally, demand for rare earth elements exceeds the supply.

“Therefore, the Government of Jamaica perceives the extraction of the rare earth elements that are present in Jamaica, to be an exciting new opportunity to earn much needed foreign exchange and create jobs,” Mr. Paulwell said.

In the meantime, while supporting the project, Member of Parliament for St. Catherine North East, Mr. Gregory Mair, questioned how much equity the Jamaican government would have in the project.

Responding, Mr. Paulwell said “the government has not yet signed off in terms of the commercial project and to what extent we are going to be involved.”

“But we do know that in relation to this pilot, the Japanese company will be footing the bill for the equipment and construction of facility and other operational cost. We will provide the red mud and that is our contribution. Whatever is produced will be shared fifty-fifty at this stage,” he stated.

The pilot project is scheduled to last for six months and ground is expected to be broken for the project in February.

Nippon Light Metal Company Ltd. is a publicly traded aluminum supplier headquartered in Tokyo, with annual revenues of over US$7 billion and over 10,000 employees.