Discovery of rare earth minerals could lead to new industry: fifty years ago, no one could have guessed that a seemingly worthless black mineral would become one of the most valuable inputs for high-technology and environmental applications.

The Hoidas Lake Rare Earth Project, based in Saskatoon, is North America's most advanced rare earth element property in development according to its owner, Great Western Minerals Group Ltd. (GWMG). The site has the potential to supply at least 10 per cent of North American demand.

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Today, rare earths are vital to technologies that include hybrid vehicles, fibre optic networks, computer monitors, energy-efficient fluorescent lamps and precision lenses.

Rare earth elements are not really rare, says Gary Billingsley, chairman and chief financial officer of GWMG. "Any chunk of granite will have rare earths in it," he says. "Most of them are more common than lead. What is rare is to find them in quantities concentrated enough to be economic. That is pretty rare."

North American consumption is currently valued at $1 billion annually, all imported from China.

The Hoidas Lake deposit contains a measured and indicated resource of about 1.15 million tonnes at a grade of 2.362% of total rare earth elements plus yttrium says John Pearson, vice-president of exploration for GWMG. Extracting 500 tonnes per day, a mine at Hoidas Lake would produce $100 million worth of rare earth oxide per year. Current exploration has barely scratched the surface, he adds.

Until the 1980s, the United States was the world's biggest producer of rare earth oxides, as well as its biggest consumer. Since 1985, Chinese production has increased, while regulatory and market forces have shut down the largest American source, at Mountain Pass, California.

The result, notes Billingsley, is that North America has become reliant on China for rare earth elements.

"We have a situation where people are trying to wean themselves off fossil fuels with alternate energy technologies and they are relying pretty much 100 per cent on China," says Billingsley. "Even worse, mostly on one mine. That's why we think it's a terrific opportunity here in Saskatchewan to develop a rare earth industry outside of China."

Perhaps the most important use for rare earth elements is in hybrid and alternate fuel vehicles. The powerful, efficient motors and the high-capacity batteries needed in these vehicles are driving demand for minerals such as those found at Hoidas Lake.

"In a Toyota Prius, for example, there's over 20 kilograms of rare earth," says Billingsley. "Now you've got cars like Lexus coming out with three electric motors in them. There's a lot of rare earth demand building up in the hybrid vehicle market."

"The uses seem to be expanding almost exponentially every year. The hybrid vehicle industry really drives it, but the uses are just staggering. That's part of the problem--to decide what product you want to produce and which market you want to address."

This is where GWMG has an advantage. In 2005, the company bought Great Western Technologies Inc., a research facility based in Flint, Michigan. The subsidiary produces high end alloys for the aerospace industry and materials for nickel metal hydride (NiMH) rechargeable batteries, as well as other exotic metals and alloys.

"They have the technology to convert these things into whichever product we want," says Pearson.

"We have the expertise in Michigan to work in niche market areas with these high value super-alloys," says Billingsley. "Our goal is 'mine to market.' There's nobody else in the world doing that."