Amendment 002 - Attachment 4- Performance Work Statement.docx

8943320RFE000032

Amendment 0002 Revised 06/03/2020

J.A PERFORMANCE WORK STATEMENT

Amendment 002 Changes are delineated by yellow highlight.

Production of Mixed Rare Earth Oxides (REOs) or Rare Earth Salts (RESs) from Coal-Based Resources

Background

Since 1988, China has been the dominant supplier of rare earth elements (REEs) and strategic materials for global markets. As such, a secure, reliable, and sustainable domestic supply of these strategic resources is both essential to the continued health of our Nation’s energy and electronics industries and is an important contributor to National security. The U.S. Department of Energy’s (DOE’s) Feasibility of Recovering Rare Earth Elements (REE) Program, in accordance with Call to Action 1 within Executive Order 13817 on A Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals, is developing processes to recover REEs from coal and coal by-products in an environmentally benign fashion, using U.S. coal-based resources that initially contain a minimum of 300 ppm total REEs.

DOE’s REE Program consists of three key technology areas:

· Enabling Technologies: Develop DOE’s technology knowledge base through resource identification, field sampling and characterization, techno-economic analysis development, and field and/or process sensor development.

· Separation Technologies: Address the viability of utilizing commercially available extraction and separation equipment and/or systems that have been developed for alternate technologies, and demonstrate their capability (i.e., technology transfer) for the extraction and separation of REEs from coal-based materials (e.g., coal, coal refuse, clay and shale over/under burden materials, power generation ash, acid mine drainage (AMD) sludge and AMD fluids). In parallel, develop new or novel transformational REE extraction and separation concepts.

· Process Systems: Design, construct, and operate bench-scale and small pilot-scale systems to validate the capability of producing REEs from coal-based resources.

DOE’s REE Program has demonstrated the technical feasibility of extracting REEs from coal-based materials. The REE Program has currently moved into bench-scale and engineering-scale prototype materials processing, with technology and engineering scale-up challenges and opportunities being addressed.

In addition, the Department of Interior and Related Agencies Appropriations Act of 1996 generally supports DOE research and development activities related to extraction, separation, and processing technologies. When the United States Bureau of Mines (BoM) was closed in 1996, Congress transferred certain BoM functions to DOE including research of the extraction, processing, use and disposal of mineral substances, and functions pertaining to mineral reclamation industries and the development of methods for the disposal, control, prevention, and reclamation of mineral waste products. See Pub. L. No. 104-134, 110 Stat. 1321-167 (1996).

Design Criteria

DOE wants to accelerate the advancement of commercially viable technologies for the extraction of REEs and minerals from U.S. coal and coal by-product sources. Broad teaming arrangements that include industry participation are envisioned to meet this goal. Teams are encouraged to engage EPC or A/E firms, equipment manufacturers, technology developers, and/or end users in determining component options. Teams shall include at least one member with industry experience related to extraction and/or separation of minerals or metals, purification of minerals or metals, and/or marketing and sales of minerals or metals. To that end, DOE envisions that the next stage of development to broadly move the extraction of REEs from coal toward a commercial industry would include the following traits:

· Facility(ies) or system(s) shall produce at least 1-3 tonnes (MT) per day of mixed rare earth oxides or rare earth salts (REOs/RESs) at a minimum concentration of 75% mixed REO/RES by weight. A majority (greater than 50% by weight) of REOs/RESs must be extracted from coal-based feedstocks;

· Facility(ies) or system(s) consisting of one or more module(s) (potentially mobile), which could include, but not be limited to:

1. Feedstock Concentration (“FC”) focused on maximizing or otherwise optimizing the degree of physical concentration of coal-derived rare earths and minerals at or near the location of coal-based feedstocks to minimize the cost of transporting raw feedstocks and chemicals required to achieve the specified product quality. Such a module may include existing, commercially available technologies for mineral/solid material concentration such as flotation, density separation, electrostatic separation, magnetic separation, and the like to produce sufficient quantities of product per day at the required size to feed a chemical extraction facility and is able to respond to local feedstock composition changes;

2. Chemical Extraction and Purification (“CEP”) module, potentially utilizing the FC module feed, to extract the REEs and produce a mixed REO or RES stream of at least 75% mixed-REO/RES concentrate by weight. Such a module is envisioned to include proven processes/technologies such as acid (e.g. sulfuric, nitric, hydrochloric, etc.) leaching, precipitation, solid-liquid separations, and the like to produce at least 1-3 MT per day of product;

· The facility(ies)/system(s) can be new construction, repurposing of existing or idled facilities, or a combination of these options and be environmentally benign;

· The module(s) is envisioned to utilize conventional technologies (including technologies that may have been commercially deployed for another application) or technologies that will be ready for deployment in an engineering-scale prototype with only limited design development activities;

· The geographic configuration may include, but not be limited to, any of the following:

1. All modules co-located at one location;

2. All modules located at distinctly separate, independent locations; or

3. Modules located at a combination of process locations;

· Feedstock materials shall, initially, be available in enough quantity to operate the system for a minimum of five years and consist of coal-based resources (e.g., coal, coal refuse, power generation ash, ponded ash, clay/shale over-burden/under-burden material, raw acid mine drainage (AMD) fluids and/or sludges, and the like) of adequate quantity from which a majority (greater than 50% by weight) of the REO/RES product can be extracted, with the option to include alternate materials such as rare earth-containing ores (e.g., monazite/bastnaesite), placer and/or phosphate mine materials, mineral mines drainage, and the like;

· Recycled materials (e.g., hard drives, fluorescent lightbulbs, etc.) are NOT OF INTEREST to this solicitation.

· The overall facility may be feedstock flexible in that one or a combination of the above coal-based resources can be used to functionally operate the facility to produce the mixed REOs/RESs;

· All modules shall operate in an environmentally benign manner; in other words, in compliance of all federal, state, and local laws and regulations with respect to emissions and waste treatment and disposal;

· The produced mixed REOs/RESs shall contain both heavy rare earth elements (HREEs) and light rare earth elements (LREEs), with a focus on REEs for production of commodity and defense-related products.

General Requirements

The Department of Energy (DOE) Office of Fossil Energy (FE) and the National Energy Technology Laboratory (NETL) seek to understand the configurations, equipment features, performance characteristics, and cost implications for a system to produce at least 1-3 MT per day of mixed REOs/RESs incorporating, as warranted, the aforementioned design criteria.

Therefore, the DOE is requiring a conceptual design(s) with an option for a feasibility study sufficient to support an Association for the Advancement of Cost Engineering (AACE) Class 4 cost estimate on REO/RES facilities capable of producing at least 1-3 MT per day of a minimum of 75% mixed REOs or RESs by weight. While conventional technologies are envisioned in the facilities, conceptual designs may contain advanced (not currently commercial) technologies and/or equipment as long as there is a plausible Research, Development and Demonstration pathway to completion of an engineering-scale prototype by 2021. The proposed REO/RES facility concept, regardless of conventional and/or advanced technologies, is envisioned to be largely designed (i.e., Front End Engineering Design, or FEED, study completed) in 2022, with the possibility of being constructed as designed soon after approval. If construction would take 6 months to 18 months, such a system(s) could be in operation in the 2023-2024 timeframe. A FEED study and construction of a potential facility ARE NOT part of this solicitation and should not be proposed.

The objectives for this requirement are as follows:

· Base Award: Develop conceptual design(s) to provide an overview of the configuration (e.g., a FC module, FC and CEP modules combined, or some other system/module) proposed to achieve production of at least 1-3 MT per day of at least 75% mixed REOs or RESs by weight of which a majority are extracted from coal or coal-based resources.

· Option: Develop a feasibility study based on an evaluation of the conceptual design sufficient to support an AACE Class 4 cost estimate. The Option shall also include conceptual designs and cost estimates for taking the mixed REOs/RESs produced by the feasibility study plant and generating individually separated REOs/RESs, and subsequently individual rare earth metals (REMs), at greater than 99% concentration by weight.

The technologies to be considered do not require commercial performance guarantees. The plant conceptual designs are projected to include commercial and pre-commercial plant components that may require additional R&D. Firms are encouraged to have broad teaming arrangements that engage EPC or A/E firms, equipment manufacturers, technology developers, and/or end users in determining component options. Teams shall include at least one member with industry experience related to extraction and/or separation of minerals or metals, purification of minerals or metals, and/or marketing and sales of minerals or metals.

Base Award: Conceptual Designs– Module(s) Configuration Options for Production of at least 1-3 MT per Day of at least 75% Mixed Rare Earth Oxide or Rare Earth Salt by Weight

The objective of the base award is to develop conceptual design(s) that provide an overview of the module concepts/configurations proposed to achieve the design criteria of this requirement.

REO/RES facility configurations may consider options or configurations for the feedstock and other fuel and/or process chemical handling units or system components. Options or configurations for the modules may be considered (e.g., froth floatation, hydrophilic/hydrophobic separation, etc. for a FC module; roasters, acid leaching designs, ionic liquids, or other extraction processes for a CEP module) that are worthy of consideration for incorporation into the REO/RES facility.

Conceptual Design Content Requirements

Each Conceptual Design submission must be limited to a single concept for a facility or system.

The Conceptual Design must conform to the following content requirements:

The cover page should include: a title for the REO/RES Facility that best describes its features, the estimated product output quantity (pounds or MTs per hour) and concentration (percentage by weight), specific feedstock quantities and rare earth concentrations, and any statements regarding confidentiality.

· Market scenario including, but not limited to:

· Coal type(s) and/or coal-based resources utilized in system, and other proposed feedstock(s)

· Include projections of feedstock reserves and feasibility of operating a minimum of 5 years with existing reserve to produce at least 1-3 MT/day. Feedstock can be made up from one or multiple sites.

· Include characterization of the projected feedstock(s).

· REE price(s)

· Permitting

· Mineral rights engagement

· Host site engagement

· Cost for all waste treatment required

· Domestic and/or international rare earth market applicability

· Market advantage of the concept

· Identification of major technical and non-technical risks, as well as their planned mitigation

· Estimated cost of ancillary products (if any) that establishes competitiveness of the concept

· Roughly estimated cost of each module that may be included in the system, as well as a rough overall estimate of a/the integrated system.

· The proposed overall facility concept, including its basic operating principles and how it will achieve targeted production;

· Description regarding the ability of the facility concept to meet the specific design criteria outlined in the RFP. If specific criteria can’t be met, or are cost prohibitive to meet, discussion shall include details on how these would be overcome.

· The proposed technology’s target level of performance (applicants should provide technical data or other support to show how the proposed target could be met) including:

· Expected facility production range

· Expected facility product concentration

· Projected individual REE concentration(s) within the mixed concentrate, if determined

· Waste Stream/Emissions control summary

· Feedstock control or strategy for varying inputs

· Brief description of system including:

· Size of the offering

· Advanced technology aspects

· List of components that are not commercially available

· Geographic location(s) of facility module(s)

· Block flow diagram of individual module(s) and integrated system

· Brief description of each process block

· Extent and manner of use of other feedstock(s) in conjunction with coal and/or coal-based resources

· Working fluid/chemical and process conditions in each module

· Features that minimize chemical consumption

· Techniques to reduce design, construction, and commissioning schedules from conventional norms including:

· Modularization characteristics (e.g., off-site fabrication of equipment or subsystems, or laydown area pre-assembly, in whole or part)

· Potential module mobility

· Parametric design

· Advanced process engineering

May provide graphs, charts, or other data to supplement facility concept description. Supplements will not be counted toward the page length.

· The current state-of-the-art in the relevant field and application, including key shortcomings, limitations, and challenges;

· How the proposed facility concept will overcome the shortcomings, limitations, and challenges in the relevant field and application;

· The key technical risks/issues associated with the proposed facility concept;

· Assessed technology gaps and R&D needed for demonstration by 2024; and

· Development pathway description for the facility concept that will overcome key technical risks/issues, including need for and size of a commercial system.

· List of commercial equipment

· List of equipment requiring R&D

· Describe whether the EPC or A&E firm has worked with the OEMs of the proposed equipment, and if so briefly describe prior work

· Whether the EPC or A&E firm has adequate access to information on the equipment included in the proposed concept

The Contractor shall include, with their submission of the Conceptual Design a firm-fixed price, if different than the original submitted not-to-exceed amount, for the completion of the Option Feasibility Study.

Document Delivery Requirements

The Contractor is required to provide a final version of the Conceptual Design no later than 90 days after award. The Contractor will use electronic media as much as practicable.

Microsoft Word format is required with the submission of deliverables in electronic media. Normal text will be typed using 12-point Times New Roman font, with 1-1/2 line spacing. Final deliverables of the final Conceptual Design shall also be made available as print- ready .pdf files for DOE.

Option Item: Feasibility Case Study

The Government reserves the right to unilaterally exercise the option for a Feasibility study.

The objective of the option award is to complete a pre-defined design package (feasibility study) to prove the technical and economic feasibility of the facility concept/configuration proposed to achieve the design criteria of this requirement. DOE encourages broad teaming arrangements that engage EPC or A/E firms, equipment manufacturers, technology developers, and/or end-users in determining component options detailed in the developed cases.

Feasibility Case Study Content Requirements

Each Feasibility Case Study will focus on performance, cost, location, feedstock type, etc. of associated conceptual design completed under the Base Award. Unrelated conceptual deigns and technologies (aside from those that immediately follow) should not be consolidated in this Option Item. The Option shall also include conceptual designs and cost estimates for taking the mixed REOs/RESs produced by the Feasibility study plant and generating individually separated REOs/RESs, and subsequently individual rare earth metals (REMs), at greater than 99% concentration by weight. This additional information will be provided in a supplemental appendix.

To obtain consistent performance and cost estimates, feasibility studies shall be based on AACE International Recommended Practice No. 18R-97 Cost Estimate Classification System – As Applied in Engineering, Procurement, and Construction for the Process Industries. The following feasibility areas are to be included in the report and should be based on a nominal AACE Class 4 Estimate Classification:

a. REO/RES production facility scope description

b. Facility production/capacity, including final product concentration

c. Approximate facility location(s)

d. Project code of accounts

e. Facility and component system descriptions

f. Facility performance summary

g. Heat and material balances

h. Water balances

i. Chemical balances

j. Steady state emissions data

k. Facility auxiliary load summaries

l. Overall block flow diagram

m. Process flow diagrams

n. Equipment summary showing which pieces are commercial and which will require R&D

o. Waste Stream Management summary

p. Estimated cost to complete an AACE Class 3 FEED study (on the original Conceptual Design proposed only)

q. Assessment of available data for commercial equipment and vendor contacts as needed

r. Technology gap analysis for non-commercial equipment/components of the concept facility to quantify the performance advances and cost reductions needed to allow the facility to meet the projected performance detailed in the feasibility analysis

s. Assessment of modularization potential – the degree to which modularization (e.g., off-site fabrication of equipment or subsystems, or laydown area preassembly, in whole or part) and associated construction time and/or cost savings may apply to a plant of the identified size.

The Feasibility Case Study shall be performed in a manner consistent with AACE guidelines. It is required that the geographic location, coal or coal-based resource type, applicable environmental regulations, etc. will be defined and cost parameters (year $, financing assumptions, etc.) will be consistent with the information provided in Appendix A. The capital and O&M costs shall be reported at a level of detail similar to that found in AACE Class 4 guidelines. The estimated accuracy of the cost estimates should be explicitly stated.

Deliverable Requirements

Required Key Deliverables for the Option Item Feasibility Case Study are provided in the table below. These deliverables are intended to incrementally define the Feasibility Case Study Final Report. Details and requirements associated with these incremental deliverables are listed in the Feasibility Case Study Content Requirements table below.

(# of Days after Exercise of Option) Accompanying Meeting Requirement

The final deliverables will be a public report and presentation titled “Feasibility Studies for Production of at least 1-3 MT of at Least 75% Mixed REO or RES by Weight from a Coal or Coal-Based Resources”. Content requirements for these key deliverables are defined as follows:

· REO/RES Facility scope description

· Plant production/facility capacity

· Plant/module location(s)

· Business case from conceptual design

· Description regarding the ability of the plant concept to meet the specific design criteria outlined in the RFP. If specific criteria can’t be met, or are cost prohibitive to meet, discussion shall include details on how they would be overcome.

· The proposed technology’s target level of performance including:

· Expected plant efficiency range (relative to REO/RES extraction and feedstock variability)

· Waste stream/Emissions control summary

· Brief description of system including:

· Size of the commercial offering

· Advanced technology aspects

· List of components that are not commercially available

· Brief description of each process block

· Extent and manner of use of other feedstocks in conjunction with coal or coal-based resources

If included in the Conceptual Design, provide:

· Chemical Extraction working fluid/chemical and process conditions

· Features that minimize chemical consumption

· Techniques to reduce design, construction, and commissioning schedules from conventional norms including:

· Modularization potential and characteristics (e.g., off-site fabrication of equipment or subsystems, or laydown area pre-assembly, in whole or part)

· Parametric design

· Advanced process engineering

Provide graphs, charts, or other data to supplement plant concept description.

· Site characteristics

· Feedstock type and composition

· Flexible plant performance targets

· Chemical requirements

· System size basis

· Environmental targets

· Projected plant efficiency (relative to REE extraction)

· Major equipment performance assumptions

· Plant performance summary (including REO output, auxiliary loads, and other relevant data)

· Heat and material balances (including process flow diagram with numbered major streams and corresponding mass and energy balance table)

· Chemical balances (including chemical demand, internal recycle, chemical consumption, and chemical makeup requirements)

· Steady state emissions data (for all criteria pollutants and CO2)

· Equipment summary showing which pieces are commercial and which will require R&D

· Assessment of available data for commercial equipment and vendor contacts as needed

· Reference plant capital and operating costs at baseline conditions at a level of detail commensurate with AACE Class 4 guidelines

· Project O&M costs for the range of flexibility conditions

· Estimated required selling price of product(s) and applicable sensitivity analysis results based on the technology concept and required design criteria

· How the proposed plant concept will overcome the shortcomings, limitations, and challenges in the relevant field and application;

· The key technical risks/issues associated with the proposed plant concept, and mitigations to overcome them;

· A detailed risk assessment and mitigation plan;

· Perceived technology gaps; and

· Development pathway description for the plant concept that will overcome key technical risks/issues, including need for and size of a commercial system.

Identify and describe the key technology OEMs, including

· List of commercial equipment

· List of equipment requiring R&D

· Describe whether the EPC or A/E firm has worked with the OEMs of the proposed equipment, and if so briefly describe prior work

· Whether the EPC or A/E firm has adequate access to information on the equipment included in the proposed concept

· Coal type(s) and/or coal-based resources utilized in system, and other proposed feedstock(s)

· Include projections of feedstock reserves and feasibility of operating a minimum of 5 years with existing reserve.

· Include characterization of the projected feedstock(s).

· REE price(s)

· Permitting

· Mineral rights engagement

· Host site engagement

· Cost for all waste treatment required

· Domestic and/or international rare earth, and other by-product, market applicability

· Market advantage of the concept

· Estimated cost of REOs (and ancillary products) that establishes competitiveness of the concept

· Non-commercial component development

· Project financing

· Site selection

· Partnering with technology providers

· Permitting

· Detailed design

APPENDIX A

REE Prices A list of simplified market prices for all salable Rare Earth Elements are listed in Table 1 below. All product price assumptions that deviate from Table 1 should be justified. Market prices for additional products not listed in Table 1 should be reported.

Table 1: Simplified Estimated Market Prices (Jan. 2020)

Global Economic Assumptions To simplify forecasting, a standard escalation rate of 3% can be applied to the cost of all consumables and products in the economic analysis. Suggested global economic assumptions are listed in Table 2.

Table 2: Global Economic Assumptions

TAXES

CONTRACTING AND FINANCING TERMS

ANALYSIS TIME PERIODS

TREATMENT OF CAPITAL COSTS

ESCALATION OF OPERATING REVENUES AND COSTS

EXAMPLE FINANCING SCENARIO

1 A nominal average annual rate of 3.6% is assumed for escalation of capital costs during construction. This rate is equivalent to the nominal average annual escalation rate for process plant construction costs between 1947 and 2008 according to the Chemical Engineering Plant Cost Index.

2 An average annual inflation rate of 3.0% is assumed. This rate is equivalent to the average annual escalation rate between 1947 and 2008 for the U.S. Department of Labor's Producer Price Index for Finished Goods, the so-called "headline" index of the various Producer Price Indices. (The Producer Price Index for the Electric Power Generation Industry may be more applicable, but that data does not provide a long-term historical perspective since it only dates back to December 2003.)

NETL 2/17/2020