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Interview with Dr. William H. Bird

Posted by admin at 4:13 PM on Mar 23, 2007

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By Clint Cox

I interviewed Dr. William H. Bird, President and CEO of Rare Element Resources, on March 4, at the PDAC conference in Toronto. Rare Element Resources was created to develop the Bear Lodge gold/rare earth property in Wyoming.
COX: How did you get interested in rare earths?

BIRD: Well, my career began as an igneous petrologist and mineralogist, particularly the rarer minerals that had some economic interest.

COX: What would some of the examples be of “rarer minerals”?

BIRD: Well, everything from the rare earth elements themselves to gold, and everything in between. And, the base metals, gold, the rare earth elements are much more common in the earth than is gold. And, in both cases, the deposits of these minerals are even more uncommon, and the search for these deposits interested me from the beginning. But, because I came at it from the mineralogical end of things, the igneous petrology end of things, perhaps I had some kind of an early interest in some of the deposits that were created in unusual situations like the carbonatites and things like that. I’ve had a long term interest in carbonatites, and the rare earths are found in carbonatites. So, that’s how I was introduced to them. Interestingly enough, I visited the Bear Lodge deposit before anybody even knew that rare earths were there, or carbonatites were there. I visited in 1963 on a University of Wisconsin summer field course. The professors just took us there just to show us an alkaline igneous complex. At the time we didn’t know about the carbonatites or the rare earths. But, that was my first visit to that property in 1963. It was over 40 years ago. Since that time, I’ve been back as a professor and student several times because of the unusual petrology, the unusual rocks that appeared there, and the unusual minerals. And, in July 2005, I was contacted by the board of directors of Rare Element Resources, and asked to take over the company. And, it was because of my interest in previous knowledge and interest in the Bear Lodge property, and previous knowledge of the rare earth element minerals that I accepted that job. I actually got quite excited about working for this company that is actually looking for these minerals that I’ve had this long term interest in. That’s how I got into it. That’s purely from my academic background.

COX: Nice. And, what do you see is the upside to the rare earth market over the next three to five years?

BIRD:
Well, the upside is certainly in the consumer industry. It’s incredible how many different uses are developing for these things: everything from uses of relatively small amounts, and things like unusual lasers to uses in consumer products that could eventually be sold in the tens of millions of items. This is going to be the growth of the industry, and another factor would be the growth of the understanding such as it is in the general population of what these minerals, these elements, are good for.

COX: And, what elements do you see as the most critical to today’s market?

BIRD: Well, all of them are used in critical applications. However, I think the one that’s used in the greatest volume and the most critical application, the combination of those two things, which again requires volume of material is neodymium. And, this is the use in the magnets. Now, also, lanthanum and cerium have the longest history of industrial usages. There are several rather prehistoric uses of the material in glass, these uses: coloring agents in glass and ceramics, and various things like this, all the way down to the use for nickel metal hydride batteries. Right now, certainly the best high tech use for lanthanum and cerium are the nickel metal hydride batteries. But, most of this lanthanum and cerium is still used in more of the old fashioned uses in paints, and pigments, and glass coloring agents, and things like this. But, I think definitely the present element that’s of most commercial interest is neodymium in the magnets.

COX: What do you see as the greatest risk for the rare earth market?

BIRD: The greatest risk in terms of orderly marketing of the material is actually a rarity of the material, an inability to supply. And the opposite end of that risk of course to the producer is that it’s possible that somebody will find a huge supply, or be able to marshal a huge supply, and bring the price down. So, there are those two risks. It’s curious that you could have the risks in both ends of the situation, either not enough of the material to sell, which will drive prices to the moon. And, it would be very good for the producers. Or, conversely, too much of the material floods the market, and the price goes down. And, the market at this point is not well understood enough in my opinion to be able to avoid either one of those risks.

COX: Do you think the investing public will become aware of the situation in rare earths? And, how do you see this unfolding?

BIRD: I don’t know how to judge that. I certainly think awareness will continue to grow. It is the duty and necessity of those of us who are in the rare earth business, whether it’s the exploration business such as Rare Element Resources, or the production business, like some of the Chinese companies that are making this stuff. It’s the business of those companies to educate the public. We have to do that. And, if we are able to do our job properly, I think the public will become more and more aware of this. But, we have to do the job. I don’t think anyone’s going to do it for us. The use of the products is relatively invisible in the consumer industry. No one knows the huge quantity of rare earth elements that are used in the hybrid cars. No one knows about that. If we make a million hybrid cars a year, the use of rare earth elements is going to skyrocket. If we make 10 million or 100 million, which is very likely, there’s no way of knowing how high those prices are going to go. But to start with, we have to educate the public as to how much of this material is actually needed in our daily consumer lifestyle. I mean, everything from iPods to cell phones, television sets, computers, the hybrid car, all of these things use a tremendous amount of this material.

COX: Now, I’ve heard about rare earths in iPods. I know that it’s used in the ear buds for iPods, but is it actually used in the hard drive for iPods as well?

BIRD: Supposedly. I have only anecdotal information on this myself.

COX: You haven’t melted one down yourself?

BIRD: No, I haven’t, and [LAUGHTER] all hard drives in computers use a certain amount of rare earth elements. The motors in these things have to use them. Neodymium, you use them in the magnets. Any time you need a tiny motor with a lot of power, you’ve got to use neodymium. Now, in the case of iPod, you’re not using very much. But, when you scale this thing up to the size of a hybrid car, you’re using tens of kilograms of the material.

COX: How are environmental concerns shaping the output of mines in China today?

BIRD: Well, it’s actually quite gratifying to see that the Chinese are starting to pay attention to environmental concerns. And, we mentioned the shutdown of the south China clays. That sort of thing would be unheard of even five years ago. There are a number of indications that China is coming to terms with these problems just simply because they are entering into the worldwide consumer market, and they know the concern that the rest of the world has for this. And, they realize that their own people aren’t going to be able to put up with a polluted environment in the future. So, as lifestyle and level of income increases in China, the middle class grows, those people aren’t going to be willing to put up with this kind of stuff. They’re going to want to breathe clean air and drink clean water. They seem to be finally understanding us and dealing with it. Same with safety problems in mining. They’re finally dealing with some serious safety problems that they’ve had for years. And, it is going to have to affect the cost of their material that they’re selling, no question about it. So, it’s a good sign. If they take care of their environment in southeast Asia and China in general, it’s going to help our environment. So, we all want them to do this. And, it will add to the cost of producing these elements.