OMAHA, Neb. (AP) - A Canadian mining firm is having trouble raising money to move forward with plans to extract a valuable and rare heat-resistant element from beneath southeast Nebraska, despite promising prospects for a mine.
Quantum Rare Earth Developments CEO Peter Dickie said the company remains committed to the site near Elk Creek, Neb., which is home to a significant deposit of niobium and possibly other rare elements used in steel production and in making high-tech devices.
"It's simply a matter of funding," Dickie said Thursday.
Quantum attracted plenty of attention in 2011 when it began exploratory drilling near Elk Creek. The 2011 drilling was the first action at the niobium site in more than 25 years.
And earlier this year, Dickie touted a new report from outside experts that suggested the Elk Creek deposit might be more promising than previously thought. But the program of exploratory drilling Dickie predicted for the summer of 2012 never happened.
Elk Creek residents remain hopeful that Quantum's efforts to mine niobium will come to fruition despite this year's delays.
"What they have going right now will be very good if they pull it off," said Lavon Heidemann, who farms near Elk Creek and represented the area in the Legislature for the past eight years.
Niobium is used to harden steel and make it more heat-resistant for industrial uses, and Quantum officials believe more than 100 tons of the element are lying more than 500 feet below agricultural land about 70 miles southwest of Lincoln.
The U.S. Geologic Survey estimates $400 million worth of niobium was imported in 2011, up from about $330 million the year before. Niobium hasn't been produced in the United States in significant amounts since the 1950s.
The agency has said the Elk Creek deposit of niobium could become one of the world's largest sources of niobium and other rare earth elements used in cellphones, wind turbines, hybrid car batteries and other applications.
There doesn't seem to be much talk around Elk Creek about Quantum's niobium project winding up the same as the previous effort to explore the deposit. Colorado-based Molycorp abandoned an Elk Creek niobium mine in the 1990s because it didn't appear that a mine could be profitable, but niobium prices have increased since then.
Johnson County Commissioner Scott Gottula said his neighbors around Elk Creek don't talk about niobium much when Quantum officials aren't working at the site.
Gottula said he doesn't think most people in the area are counting on the niobium mine even though they might benefit if it does happen.
"Everybody sees it as a longshot," Gottula said. "If it happens, it would be great for Johnson County."
Dickie said he is in talks with a couple different potential partners for Quantum, and he hopes to announce something before the end of the year, but the process has taken longer than expected. It would cost between $300 million and $400 million to create a Nebraska niobium mine that might employ as many as 500 people, Dickie has said.
"Raising capital for doing these sorts of operations has been difficult this year," Dickie said.
Quantum is more than halfway through the five-year leases it signed with landowners in the Elk Creek area, but Dickie said there is still enough time to put the mine project together before those leases run out.