Bloomberg Businessweek / SEPTEMBER 2, 2019
THE ELEMENTS
15I
f Josh Bluett and his pal Thomas Abraham-James hadn’t
run out of things to talk about during a road trip, they
might never have read the six pages that changed their
lives. Bluett and Abraham-James are Australian geologists and
onetime housemates in Brisbane who’d been hunting precious
metals and fossil fuels for mining and energy companies. By
November 2013, Abraham-James was living in Tanzania, look-
ing for gold and copper, and he invited Bluett for a visit. “I was
having a great time—this was proper exploration,” Abraham-
James recalls. “I told him, ‘You’ve got to come experience
this place.’”
During the long drive from the city of Dar es Salaam to one
of the sites where Abraham-James’s company was prospect-
ing for gold, Bluett found in the back of the car a government-
published book,Industrial Minerals in Tanzania: An Investor’s
Guide. Inside were summaries of old reports identifying depos-
its around the country, and some numbers concerning helium
caught Bluett’s eye. While conducting geological analyses for
his employer a couple of years earlier, he’d gained some expe-
rience spotting caches of the universe’s second-most abundant
element, which has lately been in short supply here on Earth.
Most of humankind’s helium comes from the U.S. and
Qatar, and technical or political factors can severely con-
strict the market almost overnight. A colorless, odorless
gas, it can be found trapped in liquid form in groundwater,
brine, and lakes; in mineral ores, coal formations, and fields
of natural gas; and in sediments of the tropical oceans or
sheets of ice. But it’s so light that it’s elusive. If not tightly
contained, it escapes not only its container but also Earth’s
atmosphere. Recycling is possible but difficult. For all intents
and purposes, helium is a nonrenewable resource, one that’s
growing steadily more valuable to all kinds of engineers and
research scientists. And no one had ever extracted helium
for its own sake.
In a typical mine where it can be profitably separated from
the methane and other gases it’s bound up with, helium con-
centration stands at about 2%. According to theInvestor’s
Guide, the hot springs in southwestern Tanzania were spit-
ting out gas with 5% to 15% helium in it. “I thought someone
wrote it down wrong,” Bluett says, “that the decimal was in
the wrong spot or something.” If the numbers were right, he
and his former housemate had stumbled onto something bet-
ter than a gold mine.
“At that point we said, ‘Let’s forget about the gold and go
to the Geological Survey in the capital and find the original
reports,’” Abraham-James says. In one of the low buildings in
Dodoma, behind a chain-link fence topped with barbed wire,
they dusted off a 1956 paper by British geologist T.C. James.
He’d analyzed gases naturally occurring around Tanzania,
then a British territory known as Tanganyika, and found
helium concentrations in the country’s hot springs as high
as 17.9%.
Soon after, Abraham-James pitched his employer on a play
for Tanzanian helium. The company declined; its focus was on
metals. Abraham-James and Bluett quit their jobs.T
he U.S. government started to develop a huge store of
helium at a processing plant in Texas about a century
ago. The feds were hoping to use it in zeppelin-styleairships, which were seen as the future of transportation
until the Hindenburg scattered that idea into a million burn-
ing pieces over New Jersey in 1937. The space program later
became the justification for the reserve, but in 1996, Congress,
in its infinite wisdom, decided the government ought to get out
of the helium business. It ordered the Texas facility’s opera-
tor, the U.S. Bureau of Land Management, or BLM, to sell off
much of the gas by 2015, with the idea that private industry
would make up the difference by then.
That last part didn’t happen, so there was little to help
helium heads when the BLM, which had long charged below-
market rates, started bumping up the price as mandated by
the 1996 legislation. The increases were unpredictable, accord-
ing to 2012 Senate testimony from David Joyner, president of
refiner-retailer Air Liquide Helium America Inc. The agency
also started tacking on fees.
Among the key uses for helium today are arc welding,
chromatography, medical lasers, optical fiber, intercontinental
ballistic missiles, and space travel. The Large Hadron Collider,
the particle accelerator outside Geneva wrestling with the big-
gest questions of physics, needs 120 metric tons of helium a
week to keep running. Because helium is superconductive,
meaning it can transmit electricity basically forever, it’s ideal
for semiconductor manufacturing. Every MRI machine in the
world bathes its magnetic coils in liquid helium to prevent
overheating. This is possible because helium boils—that is,
turns into a gas—at a lower temperature than any other ele-
ment: –452.1F. Liquid helium is so cold, it’s the first choice
when researchers want to chill something at the South Pole.
All the bulk liquid helium we know about comes from only
14 plants in six countries. A little more than half is produced
in the U.S., and about a third in Qatar. For an example of the
price spikes the BLM sale foretold, look to June 2017, when
Saudi Arabia and the United Arab Emirates initiated a block-
ade on exports from Qatar and its helium vanished from the
market. The BLM initiated rationing. Then, last August, it held
its final helium auction, and refiner-retailer Air Products &
Chemicals Inc. outbid everyone to acquire 100% of the helium
offered. The following month, Exxon Mobil Corp.’s helium
plant in Wyoming shut down for unplanned maintenance. Like
the price of lithium, the price of helium is one of the more
opaque among commodities, but reports said it jumped 135%
from the previous year. With such extreme sensitivity in this
market, a big new helium source could, just maybe, transform
a whole country’s economy. A country such as, say, Tanzania.
Even when the cost of helium shoots up, natural gas com-
panies aren’t going to increase production simply so they can
make a higher profit on the trace amounts of their product
that are helium. “You’re held captive to the main product,”
says Maura Garvey, director of market research for Intelligas
Consulting in Dedham, Mass. If you’re a large manufacturer
with wide margins or a government space program, you can
absorb the cost increase. But some customers have been told
they won’t be getting the full amount they contracted for or
that they’re going to have to pay more.
For the thousands of academic research groups using liquid
helium in their experiments or instruments, or a hospital run-
ning a few MRI machines, the price spike or supply cutoff pres-
ents an obstacle to your operation. And if you’re the King