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Overview of Rare Earth Elements in Indonesia

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 OPINION
By Samuel Lolon
Staff Mining Engineer, Golder Associates Inc. Denver, Colorado, USA
Fadli Rahman
Mineral and Energy Economics, Colorado School of Mines, Golden, Colorado, USA

Overview of Rare Earth Elements

in Indonesia
Introduction
Over the last decade, Rare Earth Elements (REEs) have become
a hot mineral commodity set, particularly in the wake of China’s
emergence as the largest world supplier, enacting controversial
restrictions that cut REE exports by 72 percent. China currently
boasts about 50 percent of global reserves, supplying around 95
percent of the world’s rare earth metals. As the world’s largest
exporter, the cut means less supply and higher market price. Other
countries with significant REE deposits include the United States,
Australia, South Africa, Brazil, Malaysia and India.

Periodic table of the 17 rare earth elements

Group
Period

1 18
1 2
1 H Nonmetal Metalloids He
1.008 2 Alkali metal Halogenes 13 14 15 16 17 4.003
3 4 Alkaline Earth metals Noble gases 5 6 7 8 9 10
2 Li Be Transition elements Lanthanides B C N O F Ne
6.941 9.012 10.81 12.01 14.01 16 19 20.18
Other metals Actinides
11 12 11 14 15 16 17 18
3 Na Mg Al Si P S Cl Ar
22.99 24.31 3 4 5 6 7 8 9 10 11 12 26.98 28.09 30.98 32.07 35.45 39.95
19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
4 K Ca Sc Ti V Cr Mn Fe Co Ni Cu Zn Ga Ge As Se Br Kr
39.10 40.08 44.96 47.88 50.94 52 54.94 55.85 58.47 58.69 63.55 65.39 69.72 72.59 74.92 78.96 79.9 83.8
37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54
5 Rb Sr Y Zr Nb Mo Tc Ru Rh Pd Ag Cd In Sn Sb Te I xE
85.47 87.62 88.91 91.22 92.91 95.94 (98) 101.1 102.9 106.4 107.9 112.4 114.8 118.7 121.8 127.6 126.9 131.3
55 56 57 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86
6 Cs Ba La Hf Ta W Re Os Ir Pt Au Hg Tl Pb Bi Po At Rn
132.9 137.3 138.9 178.5 180.9 183.9 186.2 190.2 192.2 195.1 197 200.5 204.4 207.2 209 (210) (210) (222)
87 88 89 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118
7 Fr Ra Ac Rf Db Sg Bh Hs Mt Ds Rq Uub Uut Uuq Uup Uuh Uus Uuo
(223) (226) (227) (257) (260) (263) (262) (265) (266) (271) (272) (285) (284) (289) (288) (292) 0 0
58 59 60 61 62 63 64 65 66 67 68 69 70 71
6 Ce Pr Nd Pm Sm Eu Gd Tb Dy Ho Er Tm Yb Lu
140.1 140.9 144.2 (147) 150.4 152 157.3 158.9 162.5 164.9 167.3 168.9 173 175
90 91 92 93 94 95 96 97 98 99 100 101 102 103
7 Th Pa U Np Pu Am Cm Bk Cf Es Fm Md No Lr
232 (231) (238) (237) (242) (243) (247) (247) (249) (254) (253) (256) (254) (257)
Source: www.rareelementresources.com

146 COAL ASIA APRIL 21 - MAY 21, 2014

Occurrence of rare earth elements in Indonesia
LOCATION
Source: www.usgs.com
REE are considered critical to industries
producing high-technology applications,
ranging from computers, smart phones,
cars, aerospace, and defense system, among
others. Realizing the prominence REEs
will likely enjoy through the foreseeable
future, many countries—including
Indonesia—have been increasing efforts to
The bucket wheel dredge fleet at PT. Timah Tbk’s site
find more of REEs through research and
development. Currently, Indonesia does
not rival other countries noted above in
terms of reserves. However, the authors
sense a growing interest of Indonesia’s
Ministry of Energy and Mineral Resources
in REEs, including the development of
alternative supplies in the past few years.
Current reserves, existing mining
and processing methods, economic
prospects, and alternative added value
of REEs in Indonesia described here
rely heavily on existing public data, in
addition to scientific and commercial
resources. The majority of information
is obtained from non-Indonesia
authorities’ databases.
Geology and exploration
“Rare earth elements are neither rare,
nor earth” says Stephen Castor, a retired
research geologist with the Nevada Bureau
of Mines and Geology in the United
States. The name “rare earth” dates back
to the late 18th century marking what to
be considered the first discovered of rare
elements out of earth material. Despite the
name, rare earth elements are relatively
abundant in the Earth’s crust. For
example, the two least abundant elements
are nearly 200 times more common than
gold. The more common elements are
usually found in industrial metals such
COAL ASIA APRIL 21 - MAY 21, 2014 147
 OPINION

Potential REEs in Indonesia and exploration status Even so, there are still a few elements—
Province Location REE minerals Ore minerals Deposit type Deposit status particularly uncommon ones—that
remain poorly understood. It is widely
Titanium accepted that REE are derived by 2
North Sumatra Banda Aceh Monazite Placer, shoreline Occurrence
magnetite, Zircon (two) processes as primary or secondary
deposits. The primary deposit consists
Cassiterite,
Ilmenite, Pyrite, Produced in of igneous rocks containing significant
Monazite, the past as a
Riau Islands Singkep Island Xenotime, Allanite Marcasite, Placer, shoreline by-product of tin amount of REEs while the secondary
Hematite, Rutile, (Sn). deposit exists from the primary
Zircon, Tourmaline
concentration being weathered and
Ilmenite, transported: the process that separates
Jambi Bukit Duabelas Monazite Magnetite, Zircon, Placer, Shoreline Occurrence
Cassiterite the elements from heavy sediments due
to sorting by gravity. These deposits are
Cassiterite, called placers.
Produced in
Ilmenite, REE can also be derived from
Bangka-Belitung Monazite, the past as a
Bangka Island Marcasite, Placer, Shoreline
Islands Xenotime, Allanite by-product of tin melting of igneous rocks in the Earth’s
Hematite, Rutile, (Sn).
Zircon, Tourmaline
mantle. Rock material is typically
made up of various minerals with
Cassiterite, Produced in different melting temperatures. As the
Ilmenite,
Bangka-Belitung Monazite, the past as a
Belitung Island Marcasite, Placer, Shoreline temperature increases beyond some
Islands Xenotime, Allanite by-product of tin
Hematite, Rutile, (Sn).
Zircon, Tourmaline minerals’ melting temperature points,
which may include REE, will melt and
West Kalimantan Kembajan Mountain Monazite Unknown Placer, Shoreline Occurrence separate from the host rock. Fractional
crystallization is another mechanism of
Occurrence; REE accumulation. This occurs when
earlier exploration
Irian Jaya Momi River Xenotime, Monazite Zircon N/A indicated high magma cools down and slowly forms
radioactive
elements. crystal at varying levels, depending on
melting temperature.
REE deposits can occur in many
as copper, zinc, nickel, molybdenum, of Pure and Applied Chemistry (IUPAC). places including, tropical climates. In
tungsten, tin or lead. However, the The elements are all metals and either have typically tropical wet conditions and hotter
nature of elements that often occur as a similar chemical or geological properties. ambient temperature, igneous rocks are
byproduct or secondary to major minerals Figure1 shows REE coding, and their more frequently weathered and altered to
and generally of small concentrations location in the chemical periodic table. form laterite and iron-aluminum-rich layer
has led to REE to be perceived as “rare.” In general, REE occur within—and over the unweathered bedrock. China,
The elements are rarely concentrated as a are associated with—alkaline rocks, Kazakhstan, and Indonesia all exhibit
mineable deposit. In addition, complex carbonatites, and other igneous rocks. these types of deposits.
and costly separation and refinement is The elements can also be found in placer
required to process the elements, rendering deposits, sediment deposits where the Exploration status
them sub-economic. igneous rocks intensively altered, iron- The critical status of REE can be
Rare earth elements include 17 oxide copper-gold deposits, and a variety depicted by the increasing efforts shown
(seventeen) chemical elements, with 15 of phosphate deposits. by many countries, including Indonesia,
within the periodic table as Lanthanides to find more REE deposits or alternatives
group plus Y (yttrium). Some references Geology and occurrence of REEs in substitution. Strong demand, but short
categorize Sc (Scandium), positioned There have been many extensive supplies made shorter after China’s export
above the yttrium in periodic table, as studies conducted as efforts to restrictions, has led toa substantial increase
REE, including The International Union understand the occurrence of REE. in REE exploration and mining.

148 COAL ASIA APRIL 21 - MAY 21, 2014

 Satellite imagery can be useful in
finding most substantial REE deposits.
This is often the recommended diagnostic
in the initial stage of exploration. The
deposits are generally circular on plan
view, otherwise clustered along near-
linear belts.
Exploration using airborne magnetic,
radiometric and gravity surveys may be
recommended to locate REE deposits.
Many deposits, particularly carbonatite
host rock, are surrounded by dark-
colored mafic alkaline rocks, which in
a big scale can be seen as a magnetic
bull’s eye with rings around it. REEs
are complex in mineralogy and chemical
makeup, commonly radioactive. Indeed,
radioactive emission can be used to detect
REE occurrence.
With current technology, geochemical
exploration is the main method for
REE exploration when more detailed
information is required, because most REE
The Molycorp’s Mountain Pass open pit mine, the largest producer of rare-earth metals in USA
are heavy and resistant (resistant to what?).
The detail information includes grade,
density, resource tonnage, and hardness
for extraction.
Indonesia is not as promising as
China and the United States, or other
countries in Southeast region such as
Vietnam or Malaysia in terms resource
occurrence. Figure 2 represents the
principal occurrences of REE deposits
found in Indonesia (sourced from the
U.S. Geological Survey). Monazite and
Xenotime are two most minerals found
in Indonesia region. Both minerals
were formed as placer deposits and
occur as by product of major mineral
with higher concentration such as tin.
The more detail list of this past and
current occurrence including potential
deposit through exploration is shown
in Table 1.
As the producer of placer tin, Bangka
and Belitung Islands have been known
to have association with REE deposits,
particularly Monazite and Xenotime.
According to the Indonesia’s Center for
Geological Resources, Monazite mineral
was estimated at nearly 186 tons in
2007. Kundur and Kampar are two major
locations for the mineral, in addition to
Bangka and Belitung Islands.
REEs can also be associated with
Zircon, Placer Gold, Uranium and
Bauxite ore deposits. Uranium ore
deposits in Rirang, West Kalimantan
indicated the prospect of REEs to the
tune of 855.2 tons of measured resource
and 60.5 tons of indicated resource
(Suprapto, S., 2009). In West Tapanuli,
an early exploration conducted by a
team from Indonesia Geology Agency
indicated potential REEs associated
with Zircon deposit (Kisman, Widodo,
W., 2011). Using simple volumetric
calculation, the REEs was estimated at
4.4 million tons which included major
COAL ASIA APRIL 21 - MAY 21, 2014 149
 OPINION
elements of Cerium (Ce), Lanthanum
(La), and Praseodynium (Pr).
The occurrence of REEs has also been
associated with geothermal activity in
Indonesia. A study within the complex
of the Dieng Geothermal Field in Central
Jawa shows a potential trace of REEs
ranging from 0 to 10 ppm (Herman,
D.Z., 2009). This study has opened door
to potential findings at other operating
geothermal fields in Sumatera, Sulawesi,
and Jawa that have not yet been subjected
to REE exploration.
A more recent study reported the
occurrence of potential REE in the
weathered granitic rocks in Bantimala
complex, South Sulawesi (Maulana, A.,
Watanabe, K., Yonezu K., Imai A., 2011).
The exploration and analysis used the
XRF method and a geochemical study.
The total concentrations of various REE
vary between 200 ppm to 350 ppm in the
parent rocks, with higher concentrations
in weathered rocks occurring within an
area that approximately covers 80,000
ha. The weathered material was found
approximately 7-10 meters thick.
Mining and processing methods
In the past, most REEs in Indonesia
are produced as by-products from the main
commodity such as gold, copper or tin.
By-products are secondary outputs from
a process not considered economical for
further separation due to costly processing
cost and thus ending up as stockpile material.
Indonesia, through PT. Timah Tbk, the
Production, metalic tons
state-owned enterprise, has recently started
a pilot project to process these by-products
and produce about 50 kilograms of REEs
(mainly Lantanum, Serium, Praseodinium,
Neodinium) per year.
Mining method
There is no special technique required
to mine REE deposit. The mine can be a
pumping process with an off-shore suction
150 COAL ASIA APRIL 21 - MAY 21, 2014
boat made from converted fishing boats,
or a modernized mechanical method such
as shovel. There are many considerations
taken into account when selecting the best
mining application. However, the mining
method is generally determined by the type
of host rock deposit. The open pit is the
most common mining method for primary
deposit near the surface such as those
associated with molybdenum, copper,
zircon etc. Underground type is selected
for deposit at substantial depth. The
Mountain Pass mine in California, USA is
an example of REE excavation by open pit
mining (Figure 3; www.molycorp.com).
The Bokan-Dotson ridge REE project in
Alaska is one of many being developed for
underground mine (www.ucore.com). A
dredging method which uses a bucket to
dredge the deposit, dumping it to a certain
location, is more appropriate for sediment
and alluvial deposits such as placer tin
or gold. PT. Timah Tbk uses this method
at its site in Bangka and Belitung Islands
(www.timah.com).
In general, the mining method for
REE will not differ from other techniques
used for metals, non-metals, or alluvial
mining. Significant difference lie
Global REE production history
Global Rare Earth Oxide Mine Production
140,000
130,000
120,000
110,000
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
1960 1970
Source: www.usgs.gov
essentially in processing and refining
method, which was previously considered
the drawback of REE requiring costly
technology and processing.
Processing method
In general, there are few major factors
taken into consideration in selecting a
processing method: deposit type and
nature, composition, and the process’
impact on social and environmental
values. Primary processing steps include
separation and concentration from the
host rock in acidic or alkaline solution—
usually with crushing and separation
by flotation (magnetic or gravimetric,
depending on the elements and host rock
type). Subsequently, the process involves
chemical and thermal reactions using
hydrometallurgy methods (e.g., leaching,
extraction, precipitation). Further
processing includes techniques such as
metallothermic reduction to refine oxides
or metal mixtures.
As the principal REEs in Indonesia,
Monazite and Xenotime ores can
be separated and concentrated after
series of grinding using magnetic,
gravimetric, or flotation depending on
1980 1990 2000 2010
 OPINION
reserve characteristics. The 70% sodium
hydroxide (NaOH) can be used to
digest the ore concentration producing
hydroxides forms. The leaching process
using HCl (Hydrogen Chloride) solution
can be used to recover the soluble REEs
in chlorides forms which subsequently
processed with solvent extractions for final
output of high purity REEs.
Economic analysis of Indonesia REE
prospect
In the last couple of decades, we have
seen a staggering increase of global REE
usage in wide variety of industries. This
is mainly due to significant development
of technologies that depend on the REEs.
The REEs possess characteristics like
strong magnetism and catalytic properties,
which currently are being used extensively
in clean energy (i.e. LED lighting, turbine
for wind energy, and panel for PV solar),
the automotive industry (i.e. hybrid or
electric vehicles), and industrial process
plants (i.e. petroleum refinery).
Being endowed with such advantageous
characteristics, the production of REEs has
increased dramatically: almost three-fold
in less than two decades compared to its
production in 1990. Figure 4 shows the
history of global REE production from
1960-2011, which also depicts the dominance
of China’s supply in the industry. The
temporary decrease of production in late
2000 was due to global economic slowdown
that caused global metal demand to decrease
significantly. In 2010, China accounted
for the largest share with 97% of global
production and 50% of global reserves
(Humpries, 2013). China holds a firm grip
on its market power in REE supply, and is
expected to retain substantial market power—
even if somewhat diminished—as the
discovery and development of new deposits
or substitutable technologies comes slow.
The vital roles for REEs in future
technologies have yet to be determined
152 COAL ASIA APRIL 21 - MAY 21, 2014
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by economics, trade conditions, and
policies. Larger dependence on REE is
currently threatened by Chinese export
restrictions (quotas and taxes) which
imperil modern (highly REE reliant)
technology development, particularly clean
energy, in the face of growing demand
for a greener world. If supply restrictions
are sustained, policymakers may be
compelled to impose future regulations that
incentivize substitution towards alternative
technologies. Therefore, it is essential to
encourage trade liberalization for the global
development of REEs.
Indonesia’s current market position and
future path
Compared to China’s dominance in
current REEs production and reserve,
Indonesia’s position in the market is
considered negligible, even though by-
product productions and reserves exist
in several areas across the country. As
explained previously, the US Geological
Survey reports few REEs occurrences in
Sumatera Island (Banda Aceh, Bangka,
Belitung, Bukit Duabelas, and Singkep)
and West Kalimantan (Kembajan).
Further, a potential deposit was found in
Sulawesi and Papua or Irian Jaya islands
(Jauhari and Kuntjara, 1991). However,
this is considered minimal, and if there is
no further exploration in the near future,
Indonesia will remain minor player.
There are three options for Indonesia
to improve its exposure to REE markets:
(1) enabling resources exploration,
(2) adopting advanced tailing capture
technologies, or (3) establishing a global
scale REE recycling center. The first
option exhibits the highest uncertainty,
as no discoveries are guaranteed; with
no assurance REEs will continue to have
a significant role in future technologies
either. The second option is more
promising, although capturing mining
tails will not increase significant amounts
of production. Therefore, these two
options provide lower potential to secure
Indonesia’s position in REE markets.
Hence, this leaves Indonesia with the last
and most feasible option: an establishment
of global scale REE recycling center.
Indonesia has growing potential in
REE recycling with a remarkable boost
of recycling activities in the past two years
(http://www.euromonitor.com/recycling-
of-metal-waste-and-scrap-in-indonesia-
isic-371/report). This upswing is a result
of rising concern for the environment as
well as upturn in domestic consciousness
in recycling activities, particularly
metal waste and scrap. This positive
momentum towards recycling is a critical
element to establish a global scale REE
recycling center. It is now up to the
Indonesian government to create effective
policy towards achieving the goal.
Other essential factors in determining
this recycling option are (1) a relatively
skilled and low cost labor force, (2)
abundant land, and (3) friendly trade
relations with principal players in REE
markets. The first two factors are
comparative advantages the Indonesians
possess, which could further benefit the
REE industry as it has been benefiting
other industries. The last factor is a key
factor to ensure continuous and robust
foreign demand of the elements from the
likes of the US, Japan, and South Korea.
As all other industries, the progress
of REE industry in Indonesia depends
on the government’s action in enacting
policy and regulation. Supporting
incentives should then be imposed to
reinforce both upstream and downstream
industries, and to strengthen domestic
demand via growing manufacturing
activities. If the Indonesian government
remains passive and unassertive to
the viable options, the rare earths will
merely remain rare to Indonesians for
the foreseeable future.