China Quota Gap explained; REE KPIs for Investment; Xinjiang Lithium; Malaysia IAC Deposits; Indonesia focus on RE; Lynas record result potential; Uganda: Ionic cause landgrab; Endgame strategies;
treo.substack.com
China Quota Gap explained; REE KPIs for Investment; Xinjiang Lithium; Malaysia IAC Deposits; Indonesia focus on RE; Lynas record result potential; Uganda: Ionic cause landgrab; Endgame strategies;
Rare Earth 2022 June 8
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China Quota Gap explained; REE KPIs for Investment; Xinjiang Lithium; Malaysia IAC Deposits; Indonesia focus on RE; Lynas record result potential; Uganda: Ionic cause landgrab; Endgame strategies;
treo.substack.com
The Rare Earth Observer has just turned 2 years old, this one being the 98th issue. The readership has grown far beyond expectations in both, quality and quantity.
It is also fantastic to have won top-expert contributors.
We are humbled and will continue with spirited, biased and opinionated views of all things rare earth.
This dated magazine cover shows The Rare Earth Observer attending to a junior rare earth miner:
Source: Found in a Singapore barber shop
Actually, certain junior rare earth miners had committed to publish something profound about their supposedly completed feasibility studies in recent months. Instead there was more of the same-old-same-old.
For one of them we even delayed this issue in order to offer you a good, deep look. But it was not to be.
Thanks for reading.
China: Producing rare earth oxides from imported raw materials does not count against the quota
During an investor call on June 7, Xiamen Tungsten were asked, what was behind their 2021 actual production of 4,745 t rare earth oxides, whereas the MIIT assigned quota for Xiamen Tungsten was only 3,440 t.
The Xiamen Tungsten board replied, that rare earth oxide production in China based on imported raw material would not count against the MIIT assigned rare earth oxide output quota. (!)
So that means, that the MIIT rare earth oxide output quota applies solely to domestic raw material based production.
This of course is a turbo-charger for imports and explains the intense interest and activities of Chinese rare earth companies abroad.
It also finally explains the widening gap between the quota and overall rare earth oxide output.
Shanghai celebrates the re-opening, even though millions are still under lockdown and only a fraction of businesses can actually re-open.
There was a flash lockdown of a major downtown shopping center on June 1 and shoppers fled in panic, afraid of getting locked in that building for days.
Also at least one neighbourhood was locked down again immediately after re-opening, because one single, lonely infected person had been out and about in the area:
Lockdown and testing notice of Shanghai Jing’an District Gao Rong Neighbourhood Committee of the CCP, June 1, 2022
Under the current rules, only people who tested negative for COVID-19 during the past 72 hours may move about freely. Whoever tests positive may be ferried off to a quarantine center for as long as he/she remains COVID-19 positive.
In order to facilitate testing, the city set up testing booths that everyone can reach within 15 minutes of walk. However, population density in different neighbourhoods can vary vastly, and that caused long waiting queues for testing.
Did they not observe the 6-P rule: Proper Planning Prevents Piss-Poor Performance? Or isn’t it rather an impossible task to test the complete population of >25 million every 72 hours?
The detriment of Zero COVID
Under Zero COVID for any employer the planning horizon per employee is 72 hours. If a positive case occurs within a company office or factory, everything stops for testing and possible subsequent lockdown.
While the big ones such as the Teslas get special treatment, also small and medium enterprises have been ordered to re-open. Well, not exactly: They have been ordered to file an application for re-opening. Time til graceful approval 2-3 weeks.
How companies, whether rare earths or otherwise, are expected to function under the a.m. conditions is incomprehensible.
Heavy burden on GDP
As incomprehensible as achieving a return to growth in 2022, something the Chinese prime minister demanded last week from 100,000 officials during the probably largest video conference ever. Why: Week in China ran a very good piece “The great reconfiguration” on the supply chain problems the futile hunt for the virus has caused.
The cost of testing everyone in China’s first- and second-tier cities — some 505 million people — could reach 1.45 trillion yuan ($218 billion) a year if tests are done every 48 hours, equating to 15 times a month, Soochow analysts estimated in a May 7 report. That amounts to 1.27% of China’s GDP in 2021, or 7.2% of the country’s combined central and local government general public budget revenue.
The government is cautious. Among other matters like not reporting too euphorically, the media have received instructions not to talk about the “unlocking” of Shanghai, as, different from Wuhan, a lockdown was never officially declared in Shanghai and hence there can’t be anything like an unlocking:
Such instructions are rarely signed, but likely origin is the Central Propaganda Department of the CCP, also known as “Ministry of Truth”
In other words: Officially, the Shanghai lockdown will never have happened.
Rewards for exposing foreign spies or other security violations have existed for years in China. The new measures are aimed at standardising rewards and motivating the public at a time of intensifying threats from foreign intelligence agencies and other hostile forces, a Ministry of State Security representative said, according to a state media outlet.
Citizens can get "spiritual rewards", in the form of certificates, or "material rewards" of cash from 10,000 yuan to more than 100,000 yuan, depending on the value of the tip-off, the ministry said in a notice.
A law due to take effect June 21 will bar imported goods partly or wholly made in the Chinese manufacturing hub of Xinjiang -- unless companies can prove the products have no ties to forced labor. Passed unanimously by Congress, and with strong support from unions and activists, it aims to make sure that there’s no place in the US economy for merchandise made by workers languishing in detention camps.
Will that resolve last, when it comes to Lithium carbonate/hydroxide imports from Xinjiang for EV batteries, possibly processed by Albemarle’s facilities in China? (Albemarle are also a player in rare earths for their catalyst business). How about EV manufactured with batteries containing Lithium from Xinjiang?
Here the list of Xinjiang Lithium mines:
Lithium: 3 extra large mines, 8 large, 8 medium size and 5 small size mines - all in Xinjiang - Source: EastMoney.com
Ahmad Zukni said that the rare earth element mineral which will be mined in Hulu Perak is basically an ionic adsorption clay which does not contain any harmful radioactive material.
Ahmad Zukni said this in response to Sahabat Alam Malaysia’s (SAM) statement today in which its president Meenakshi Raman said that the Department of Environment (DoE) had rejected the Environmental Impact Assessment (EIA) report for the mining project initially due to concerns over its radioactive content.
Meenakshi said that the EIA report has already revealed the presence of thorium in the soil sample tested.
“Already, the naturally occurring radioactive Thorium (Th-228) of the soil sample from the land owned by Perbadanan Pembangunan Pertanian Negeri Perak (PPPNP)/land parcel PT1764 is reported to be above the regulated 1 Bq/g.
The pilot project will be carried out on land owned by the Perak State Agriculture Development Corporation in Hulu Perak, according to Free Malaysia Today.
Perak Menteri Besar Datuk Saarani Mohamad said in situ method would be implemented for the final product of the mining, as NR-REE carbonate.
"The state government has approved the owner's mining license to the Perak Agricultural Department Corporation for the purpose, on the land area of 213.76 hectare in Hulu Perak district," he said.
Looking at what this did to large swathes of land in China and Myanmar one may wonder, what level of misinformation led to that decision.
Strangely, everyone is mum about who the driving force behind these efforts is.
Energy and Mineral Resources Ministry mining director general Ridwan Djamaluddin said that the ministry had identified eight locations that contained rare earth reserves, with plans to explore more areas up until 2024.
Among the eight locations are Bangka Belitung, North Sumatra and West Kalimantan with rare earth mineral reserves amounting to roughly 207,397 tonnes, 19,917 tonnes and 219 tonnes, respectively.
Mapping rare earth reserves is part of the government’s bigger plan to develop downstream rare earth industries with an emphasis on the defence and renewable energy industries.
Since most rare earth minerals used for EV batteries as well as aerospace and defense products are controlled by China, Taiwan could see development of its strategic material technologies significantly slow down if it loses access to China's rare earths.
As a result, ITRI plans to regenerate high-quality rare earth powder from waste materials through extraction and purification to satisfy upstream materials needs for Taiwan's green energy and semiconductor industries. ITRI is targeting to replace 30% of imported rare earths with regenerated minerals.
Hawkins said, for example, that the notion the U.S. doesn’t need new mines and that a reliance on recycling will secure the nation’s critical materials needs is unfounded.
A recent report covering the mineral intensity of the transition to cleaner energy sources showed that demand for certain key minerals will skyrocket more than 500% by the year 2050. The demand for copper, cobalt, lithium, nickel, and other metals could not be satisfied by the “circular economy” envisioned by advocates of near total reliance on recycling.
“Biden has promised to convert the entire U.S. government fleet – about 640,000 vehicles – to EV’s (electric vehicles),” Hawkins said. “That plan alone could require a 12-fold increase in U.S. lithium production by 2030, according to Benchmark Minerals Intelligence, as well as an increase in output of domestic copper, nickel, and cobalt.”
Forecasts are difficult, particularly if they concern the future
A report of Bloomberg NEF for the European Federation for Transport and Environment. From the summary:
On average, battery electric vehicles reach the same price (before incentives) as equivalent petrol models between 2025 and 2027. Small vans reach price parity the earliest, in 2025, small cars are last in 2027, with medium and large sedans and SUVs hitting the parity point in 2026. In 2030, an average medium electric car is 18% cheaper than the equivalent petrol excluding taxes.
The main drivers of this price drop are twofold: first, falling battery prices, which are expected to drop by 60% over the decade (from 120€/kWh in 2020 to around 50 €/kWh in 2030). The 100$/kWh frontier, said to be a key point for affordability of EVs, would be reached in 2024 (80€/kWh). The second major driver is the switch to dedicated BEV manufacturing platforms (and new vehicle architecture) which allow carmakers to reduce costs by 10%-30% thanks to simpler assembly, standardised battery packs and other components and higher volumes by producing various BEV models on the same chassis.
Falling battery prices: How?
From the research paper:
By 2035, BloombergNEF projects that lithium-ion battery packs could achieve a volume-weighted average price of $45/kWh. For an EV with a 100kWh battery pack, the pack price would be $9,200 cheaper in 2035, a fall of 67% from 2020. It is not yet clear from a bottom-up perspective how the industry can achieve these prices. It may well require material substitution and will certainly require further technology advancements.
A bold forecast followed by a qualifier right after.
Bloomberg also say:
Uncertainties throughout the period to 2035 include raw materials prices that can become volatile and cancel some gains, and the speed at which the supply chain can scale up rapidly and sustainably in Europe.
“Can become volatile” is a rather mild understatement of the presence, if we look at the year-on-year price development:
Lithium +400%;
Cobalt +70%;
Nickel+50%;
NdPr+90%.
But once the envisioned cost savings materialise (and critical metals appear from thin air):
Europe could reach just over 50% BEV share of sales by 2030 and 85% by 2035.
In our view this is a mix. On the one hand a possible recession forcing down resource material prices, on the other hand turning out products for an enthusiastic market as if nothing has happened.
Who is who
Here an excerpt of the EU Transparency Register for Transport and Environment (European Federation for Transport and Environment), the organisation, that entrusted Bloomberg NEF with the report:
So Transport and Environment receive funding from the EU Commission and from the European Climate Foundation (ECF), among others.
ECF’s entry in the EU Transparency Register says: 10 persons and a 2020 budget of whopping EUR 126 million.
While the ECF are mum about details of how much they receive from whom, on the top of the list of European Climate Foundation’s contributors is Bloomberg Philanthropies:
Source: ECF 2017 Annual Report p. 23
Good Energies, marked above as Swiss, are actually a US entity.
7 out of 14 contributors of this European Climate Foundation are actually of US origin.
A time-honoured method of US-investment bankers, reading the market from the intestines of a dead Wall Street pigeon:
There will be a “sharp correction” in lithium prices, with the metal averaging under $54,000 a ton this year, down from a spot price of over $60,000. It will fall further to an average of just over $16,000 in 2023, the Wall Street bank said.
Cobalt will probably drop to an average of $59,500 a ton next year from roughly $80,000 now. Nickel is likely to rise almost 20% over the rest of this year to $36,500 a ton before “fundamental pressures” drive it lower again, the analysts forecast.
Still, prices could soar again after 2024.
US investment banks need the markets to move in whatever direction, in order to make big money.
Nearly 12% of power generated by wind turbines in Inner Mongolia this year has been wasted because the grid couldn’t take it, along with 10% of solar power in Qinghai, Economic Information Daily reported, citing government data. In sunny and windswept but sparsely populated Gansu province, the utilization rate of wind and solar power could drop below 90% this year from nearly 97% in 2021.
While China’s slowing economy and energy use amid Covid-19 lockdowns has something to do with it, the main culprit is the blistering pace of renewable energy installations. China set a record for wind capacity additions in 2020 and for solar in 2021, and is set to double that mark this year.
The prepared CeO2, La2O3 and Nd2O3 catalysts were employed to catalyze transesterification of palm oil and methanol. They showed high catalytic activity with FAME content over 95%. The catalytic performance of the best available La2O3 catalyst was additionally investigated. It was found that the initial transesterification rate catalyzed by the synthesized La2O3 catalyst was three times higher than its commercial counterpart, which related to its basic strength, high crystallinity, large pore volume and great crystallite size.
Lindian Resources Limited (ASX Code: LIN) (Lindian or the Company) is pleased to announce that it has reached an out-of-court settlement in regards to a dispute relating to Lindian’s proposed acquisition of up to a 75% interest in the Kangankunde Rare Earths Project located in Malawi pursuant to the terms of an Exclusive Option Agreement entered into in 2018. Under the terms of settlement, the parties to the existing legal proceedings in the Malawi Supreme Court of Appeal have agreed to discontinue those proceedings in exchange for Lindian being provided with a 60 day exclusivity period1 within which to seek to negotiate the terms of a legally-binding transaction whereby Lindian can acquire a 100% interest in Rift Valley Resource Developments Limited (Rift Valley) and its Kangankunde Rare Earths Project (Proposed Transaction)…
Accordingly, there can be no guarantee that any transaction will eventuate at this stage.
To assist with the negotiation of the share purchase agreement between the parties to give effect to any Proposed Transaction, the terms of settlement reflect a proposed purchase consideration of US$30 million…
Kangankunde is a historical monazite mine with unusually low Thorium content in Malawi, that has been explored for rare earths since the 1960s.
The late Michael Saner of Rift Valley Resource Developments Ltd, South Africa, obtained the Exclusive Prospecting Licence No. EPL 086/2000 for the deposit 22 years ago and published a feasibility study in 2002.
Thereafter he partnered with Rare Earth Mining Company, which ended in legal acrimony and later he partnered with Lynas, who also thought that they had an option to take possession of Kangankunde. But actually they hadn’t, so this partnership also ended in legal acrimony.
The latest one in line were Lindian Resources and they were about to go down the same road as Lynas did before them.
However, last year Michael Saner passed away from COVID-19 and Lindian now have a good opportunity to settle with his heirs.
It would be a corporate feast for Lindian. But it ain’t over until the fat lady sings.
According to our historical numbers: Kangankunde grades about 4% and holds about 100,000 t TREO, almost 80% of which are commercially non-viable lanthanum and cerium, but NdPr 75/25 at proportional 18.7% looks ok:
After Taruga Minerals (ASX: TAR) confirmed ionic adsorption clay (IAC) rare earth elements (REE) at its Morgan’s Creek prospect within its wider Mt Craig copper project in South Australia, the company plans to assess it further in a focused exploration program in July.
Mt Craig is within the Adelaide Fold Belt (AFB) at the intersection of the G2 and G8 structural corridors, which host BHP’s (ASX: BHP) Olympic Dam operation and other major base metal deposits in the state.
Notable intercepts from this drilling were 6m at 1,210 parts per million [0.121%] total rare earth oxides (TREO) from 9m; 22m at 1,050ppm [0.105%] TREO from 27m, including 10m at 1,940ppm [0.194%] TREO; and 3m at 1,715ppm [0.1715%] TREO from 39m, including 2m at 2,456ppm [0.2456] TREO.
Taruga’s analysis generated an average recovery of 85% TREO in the clay zone. Recoveries of 93% were achieved of the high-value magnetic REO (MREO).
In the weathered ore zone, recoveries averaged 68% TREO and 70% MREO.
Same issue with other ionic clay deposits: How not to use in-situ leaching with ammonium sulphate and not lay waste to land and ground water?
The Megawatt Lithium and Battery Metals Corp. technical team has completed a field visit to the Artic Fox & Isbjorn Projects in central Northern Territory, Australia, to further evaluate the exploration potential for rare earth elements ("REE") identified in a recent desktop study.
Look online, and you will discover that while Lynas Rare Earths Ltd. (ASX: LYC) is covered by 9 research companies, it is impossible to find one PDF Equity Research Report online. For Australian-listed companies, sometimes they publish the reports on their website; unfortunately, not for Lynas.
Which is somewhat strange, indeed.
Dig deeper online and you may see a headline about whether Lynas has too much debt… these conclusions are in my humble opinion quite wrong, and underestimate this rare earths’ ruler outside of China, Amanda Lacaze.
I ran my conclusions by a semi-retired analyst, who requested anonymity and wrote me back promptly in agreement: “Saw their balance sheet and they are running just over 1x debt: cash flow and their cash flow is strong based on growing sales and commodity prices.”
In FY2021 ending June 30, 2021, Lynas turned an operating loss in FY2020 into a very healthy operating profit in FY2021, as the gross profit nearly quadrupled year on year:
Source: Lynas Annual Report 2021, p.56
The average published China price of NdPr for the financial year 2020 from July 2019 to June 2020, was US$41.40/kg incl. 13% VAT, resulting in Lynas operating loss of AU$ 6.245 mio.
The average published China price of NdPr for the financial year 2021 from July 2020 to June 2021, was US$63.50/kg incl. 13% VAT, resulting in Lynas operating profit of AU$ 187 mio.
In FY 2022 Lynas will look even better. The average published China price of NdPr for the financial year 2022 from July 2021 to June 2022, will likely be ~US$124/kg incl. 13% VAT, almost double of the preceding financial year. How much exactly Lynas will have profited from that depends on what quantity of NdPr they shipped in what month during FY 2022:
Corresponding to the expectations, Lynas share price has almost doubled:
SimplyWallstreet earmark increased insider selling of shares, i.e. Mrs Lacaze selling quite a number shares, but we have a hunch that the reason for that may be quite different from what SimplyWallstreet might want to imply.
Debt
Under C3. “Interest Bearing Liabilities” in the FY2021 annual report the total amount is listed as AU$ 201,959,0000, most of it under the JARE Facility. The note C.4 “Financing Facilities” in the annual report refers to and details the increasing amounts of principal to be repaid and Japan’s priority under the loan agreement:
Source: Lynas Annual Report 2021, p. 81
There are a couple of loose ends appearing the FY2021 annual report (e.g. Malaysia tax status), but principal repayment of the JARE loan is certainly not one of them, neither for 2021, nor for 2022.
Mines are self-depleting assets and freak market market developments do happen, so going forward perhaps Lynas may want to consider a balloon payment of principal under the JARE facility, combined with more freedom where to place product outside the realm of Japan Inc.
Currently Japan and Japanese transplants in Asia are the only meaningful market for NdPr outside China, but this is about to change a bit.
Australia's next rare earths producer Hastings Technology Metals Ltd is pleased to announce that it has successfully completed its first blast of construction waste material required for the ongoing completion of its early infrastructure works packages, including construction of access roads, airstrip and village accommodation. This is an important milestone in the development of the early works infrastructure and allows advancement towards full scale process plant construction over the coming months.
Rare earth prices will have to increase much more, before this one becomes feasible one day in future, in our humble view.
Defense Metals Corp. is pleased to announce the commencement of diamond drilling at its Wicheeda Rare Earth Element (REE) deposit. The Company plans to complete up to 5,000 metres of diamond drilling designed to further delineate existing resources, assess near deposit exploration targets, collect geotechnical and hydrogeological drilling for the purpose of optimization of open pit slope design, and generate additional REE mineralized material for continued metallurgical testwork.
Defense Metals is pretty much WYSIWYG. It would not be terribly surprising, if someone from across the Pacific is having a long and hard look at them.
Wicheeda’s proportional REO content is about 85% uneconomical lanthanum and cerium. A good way to go would perhaps be a cerium-depleted concentrate.
The first production train will recycle end-of-life rare earth magnets to produce magnet-grade neodymium, praseodymium, and dysprosium at over 99.5% purity, while the second production train will recycle black mass from end-of-life lithium-ion batteries producing high-purity, battery-grade lithium, cobalt, manganese, nickel and graphite.
American Rare Earth is now finalizing the preparation of its chromatography columns and moving towards initial throughput of material and production of isolated and purified rare earth elements.
This project would be wonderful, if there were enough scrap magnets around. In the EU, as laid out in one of our previous issues, significant quantities of scrap are not expected before 2035.
The sample (55 g) follows the initial quantities of mixed REC sample produced by the Company, announced March 23rd, 2022. The Company is pleased to report the new sample has a neodymium (Nd) and praseodymium (Pr) distribution – i.e. % of Nd+Pr oxide of the total rare earth oxide (“REO”) – of 22.4%, which is significantly higher than the distribution reported by several major global producers, and that of the previous sample produced (21.6% NdPr). Additionally, the mixed REC sample, with a formula of REE2(CO3)3(H2O)8 as determined by XRD, contains 50.9% REO, <0.5 ppm Th, and <0.1 ppm U.
The mixed REC sample (Figure 1) was produced from the Ashram Rare Earth and Fluorspar Deposit using the conventional recovery flowsheet developed at Hazen Research, Inc. in Colorado, USA, which results in high grade monazite concentrate exceeding 40% REO.
Ashram has all the right features and Commerce do all the right things. The trouble is logistics:
Source: Google Maps
North of Ashram is Ungava Bay, but there is no port. The bay and its beaches are hard to access due to ice much of the year. Ice is also being pressed into the bay from the Hudson Strait.
Going south ca. 250 km to Scheffersville, where there is theoretically railway transportation available (practically not, because of capacity constraints), a road would need to be built with ca. 80 bridges. Extending the railway up north would be a wonderful project, but realistically it may not happen during the first half of this century and it also would require countless bridges.
Source: Google Maps with own markups
The nearest operational port for Ashram would be Vale’s Voisey’s Bay, ca. 300 km distance. A connecting road would also benefit Torngat Metals, a privately held junior rare earth miner holding on to the Strange Lake deposit, and possibly others.
The road would be no less challenging than the one described above, with the added difficulty of passing across the state line between Quebec and Newfoundland & Labrador, apparently as insurmountable a problem in Canada as trying to build a highway between Seoul and Pyongyang across the 38th Parallel on the Korean Peninsula.
Not to forget, First Nations would absolutely need to be asked and need to agree, plus a deal would need to be cut with Vale.
The location is so difficult, that junior RE miner Torngat Metals presented an idea of using airships for the 240 km transport from Strange Lake to Scheffersville for onward rail carriage. 100,000 t per year. By airship. Seriously, no joke.
These are by far not the only you-can’t-get-there-from-here deposits in Canada.
It is kind of funny, when on one hand Canada’s politicians are making grand international commitments for the supply of critical metals to the world, but on the other hand let their miners rot without logistics.
Canada’s rail network is squeezed in the south of the country and works best between east and west.
With global warming and the quest for minerals proceeding, Canada should really look at a swift multi-modular railway network extension northwards and view the feasibility based on expected tax and royalty income from miners in those regions.
The PEA was prepared by SLR Consulting (Canada) Inc. The technical report relating to the PEA will be filed on SEDAR within 45 days of this news release.
Then we’ll look at it mid-end of July. No advance laurels from here.
Steenkampskraal has a mineral resource estimate of 605 000 t of ore, grading 14.4% total rare earth oxides (TREO), containing about 86 900 t of TREO, including 15 630 t of neodymium, 4 459 t of praseodymium, 867 t of dysprosium and 182 t of terbium.
The mine was previously operated by diversified mining major Anglo American from 1952 to 1963, during which time it produced 26 969 t of TREO.
SHL envisages a production rate of 2 700 t/y of TREO over a life of more than 20 years, involving first producing and selling monazite concentrate, then progressing to producing and selling mixed rare earth concentrates, and thereafter producing and selling separated rare earth oxides.
Sounds very sensible, however, Steenskampskraal is historical Thorium mine, in terms of rare earth a so-called “hot deposit”. Only Thorium-depleted Monazite will find a compliant market.
The fly in the ointment
But there is a fly in the ointment:
In a presentation to last week’s Junior Indaba covered by Mining Weekly, Blench disclosed that although the mining right to mine for rare earths and other minerals on portion 1 of the farm Steenkampskraal was secured from the Department of Mineral Resources and Energy (DMRE) in 2010, a few months ago another company applied for a prospecting right for rare earths on the same portion of Steenkampskraal.
“The DMRE correctly refused to approve that permit for a prospecting right over the same land where we hold the mining right. However, the company that applied for that prospecting right appealed to the DMRE against their decision to refuse that prospecting application.
“We’ve now been waiting for 60 days, which is the statutory period that the DMRE has to review these appeals, and we still do not have the reply from the DMRE.
“We want to raise money for our project. There’s an application of a prospecting right on land where we have a mining right, which contests the legitimacy of our mining right.
“If there is an opportunity for claim jumpers to come in and apply for prospecting rights where you have already issued a mining right, then it questions the validity of the mining right,” said Blench, who implored the government to make it clear that the mining right is secure so that investment can proceed.
That is a bummer.
The original mining license of 2010 was valid until 2020 and according to the company this one was extended to 2030.
In November 2019 Steenkampskraal announced also the renewal of the prospecting rights for 3 years until July 11, 2022.
There is some harsh criticism for South Africa’s Department of Mineral Resources and Energy:
As Business Maverick previously reported, Statistics South Africa (Stats SA) was unable to publish the monthly mining production and sales data as scheduled on 12 August because the DMRE failed to deliver the numbers – an epic failure of basic governance. And, typically for a department that has become as transparent as a lump of coal, no explanation was given.
Take the DMRE’s utterly useless online Samrad system for registering mining rights and related applications, which the department finally admitted in February this year had resulted in a backlog of 5,326 cases – after years of denial about its transparent shortcomings, which the industry had long bemoaned.
This is a key reason why, despite the current commodities boom and South Africa’s abundant mineral wealth, investors are giving the mining sector here a wide berth.
The link to the South African SAMRAD system on the DMRE’s website indeed seems dead.
Jinli Permanent Magnet (300748) recently disclosed the progress of the Baotou base project during an investigation. The company said that the 8,000-ton high-performance magnetic material project in the first phase of the Baotou base was completed in December last year. The company plans to continue to significantly increase its production capacity in the next few years, and strive to achieve an annual production capacity of 40,000 tons of high-performance NdFeB permanent magnet material blanks by 2025.
The average annual compound growth rate of the production volume is 14.7%, and the global demand in 2025 will be 129,000 tons; it is expected that the global high-performance NdFeB supply will have an average annual compound growth rate of 14.4%, and the global supply will be 130,000 tons by 2025. t, maintaining a tight balance.
Auxico Resources Canada Inc. (CSE: AUAG) is pleased to announce that a final agreement has been signed ("Agreement") with Cooperativa Estanifera de Mineradores da Amazônia Legal Ltda. ("CEMAL") concerning the production of tin, niobium and rare earths from the Massangana tailings estimated to contain 30,000,000 tonnes in the State of Rondônia, Brazil. A study prepared by the German Mineral Resources Agency and the Geological Survey of Brazil1 indicates that three types of products could be generated from the tin tailings: columbite concentrate containing 34.07% niobium, monazite concentrate containing 37.74% total rare earth oxide ("TREO"), and cassiterite concentrate containing 54.92% tin. For reference, please see below the table outlining the products as provided within the study.
The total capital expenditure for the concentration plant in Brazil, and the elemental separation in the US, has been estimated at US$300,000,000. The Company received a term sheet from Broughton Capital for US$300,000,000 debt financing, which is subject to due diligence and an off-take agreement, of which the Company is in the process of negotiating.
The feed material from the tailings received by Auxico averaged 4.56% total rare earth oxide content (TREO), indicating a content of rare earths in the tailings in the order of 1,370,000 tonnes. The provided concentrate contained 63.49% TREO.
The resources that Auxico “discover” are spectacular, the quantities breathtaking and the recovery rates are just outlandish. Auxico should be the envy of the industry.
Auxico announcements leave the impression, as if the entire resource industry on the planet has been completely incompetent for decades, having missed all these golden opportunities.
Seemingly effortlessly Auxico swing from one outrageously fantastic opportunity to another, like an Orang Utan swings from tree to tree.
The trees behind the Orang Utans go up in smoke before they disappear. In case of Auxico, however, this process is fully carbon neutral.
Mkango has signed a non-binding term sheet with CoTec Holdings Corp. (“CoTec”), an ESG-focused company investing in innovative technologies, led by Julian Treger and Braam Jonker, in relation to investments by CoTec into Mkango and Mkango’s subsidiary, Maginito Limited (“Maginito”), and collaboration in downstream rare earth technologies (the “Transactions”). The Transactions are expected to include the following key components:
CoTec will invest £2 million (C$3.2 million) into Mkango by way of a two-year, unsecured convertible note (“Mkango Note”) with 5% interest, convertible into Mkango shares at 27p each, providing Mkango with additional working capital as it advances financing discussions for the Songwe Hill rare earths project (“Songwe”) in Malawi and the Pulawy separation plant project in Poland
CoTec will also invest £1.5 million (C$2.4 million) into Maginito, equating to a 10% equity stake in Maginito for the purposes of strategic investments in downstream rare earth technologies and working capital
Restructuring resulting in Mkango’s wholly owned subsidiary, Mkango Rare Earths UK Limited, (“Mkango UK”) becoming a wholly owned subsidiary of Maginito
In consideration of a four-month exclusivity period, CoTec will advance £500,000 (C$805,000), no later than June 20, 2022 (the “Advance”), offsetable against and carrying largely the same terms as the Mkango Note
Mkango and CoTec will enter into a co-operation agreement regarding future investments in rare earth processing technology opportunities in the United States
Cotec are listed on the TSX as CTH.H. According to its most recent quarterly, CoTec were holding C$129,000 in cash on March 31, 2022.
The “subsequent events” note in the report says: “…the Corporation issued an aggregate of 11,390,593 subscription receipts pursuant to the Private Placement for gross proceeds of $6,264,829.”
The communities in Busoga region who are going to be affected by the mining and production of Rare Earth Metals - REM have asked the Government to exercise transparency while compensating them for their land.
The mineral deposit ranks among the largest known ionic adsorption clay outside of China. Warren Tregurtha, the Chief Executive Officer of Rwenzori Rare Metals - RRM, a private company licensed by the Ministry of Energy and Mineral Development to carry out the mineral prospecting and exploration revealed that the actual mining will begin in 2024.
However, tempers are flaring on the ground with landowners crying foul following the involvement of dubious individuals brokering land deals in anticipation of high returns from the Government compensations.
Jane Nalongo, 30, a resident of Buwaaya parish in Mayuge District told URN that she and her other six siblings are being forcefully evicted by the Sub-County Chief backed by some security operatives following the illegal survey of their land byRwenzori Rare Metals - RRM.
Through their area MP, Abdu Katuntu, the aggrieved residents, who include cultural and religious leaders sought an audience with Ruth Nankabirwa, the Minister of Energy and Mineral Development to seek clarity about the land compensation process.
Jamada Kasisa, the Local Council One Chairperson of Makuutu village in Bugweri Sub-County, says the brokers, mainly Government officials are on a rampage coercing residents to sell their land arguing that the Government will take it without compensating them.
Ms Ruth Nankabirwa, Minister of Energy and Mineral Development, Uganda
On Monday, Nankabirwa visited the area to interact with the Project Affected Persons - PAPs and assured them that the Government is undertaking due diligence to ensure the residents are compensated.
The Minister disclosed that her Ministry is yet to engage Government valuers to evaluate the land occupied by the affected households before they are duly compensated to allow for the extraction of the minerals to commence.
Based on the provisions of the Mining Act 2003 and Mining Regulations 2019, Rwenzori Rare Metals is required to apply and acquire a mining lease through the Energy Ministry before it can compensate/resettle affected landowners.
In order to obtain the Mining lease, the company must undertake a feasibility study, conduct an Environmental and Social Impact Assessment (ESIA), obtain consent from landowners to access the project land, and develop a Resettlement Action Plan (RAP) that will be used to mitigate the probable resettlement impacts to the project affected persons.
Rare earths miner Rainbow Rare Earths has entered into a memorandum of understanding (MoU) with a diversified chemicals group to investigate extracting rare earth elements from a nitro phosphate process stream at the chemicals group’s phosphoric acid production plant near Johannesburg.
The feedstock for the phosphoric acid production plant originates from the same ore originally mined by South African group Foskor that generated the two gypsum stacks at Phalaborwa.
Subject to a successful outcome, Rainbow and the chemicals group intend to negotiate terms for a potential joint venture agreement to extract value from the rare earths present in the phosphoric acid processing stream.
The “diversified chemicals group” should be AECI. Rainbow try to make the best use of their exclusivity of the K-Tech process for South Africa.
More than 30 objections to the factory were received, including concerns over environmental risks, traffic and the plant's proximity to homes and roads.
Pensana said it would create 125 jobs as well as 450 construction jobs.
"The products which we use are both non-hazardous and low-risk," he added.
Like HCl and sulphuric acid?
Pensana previously said the raw materials for its products would come from a sustainable mine in Angola.
We wonder, what endgame the Pensanas have in mind. At a certain point the whole thing will simply unceremoniously fall apart.
Latest after 2 years of production in Angola, if the project can make it that long, when on top of royalty the 25% tax on revenue kicks in it will be game-over - a fiscal coupe de grâce.
USA Rare Earth LLC will eventually employ at least 100 people at its Stillwater facility, which will be the first of its kind in the U.S.
The factory will manufacture powerful magnets from rare earth elements that the company will be mining in Texas.
We remember the announcement on the purchase of the second-hand magnet equipment from Hitachi of April 7, 2020:
At 2,000 tonnes per year, the USA Rare Earth Magnet Plant would produce approximately 17% of the current U.S. market, and would generate more than $140 million in annual sales (at 2019 prices). At present, no other NdFeB permanent magnet manufacturing plant is operational in the Americas.
USA Rare Earth will warehouse the equipment pending a decision about where to locate the new magnet operation, with the priority being good access to the Round Top Project, located in Texas. At the same time, USA Rare Earth plans to work with manufacturers of rare earth metals and alloys in order to convert the highly purified rare earth oxides from Round Top into magnets.
According to other interested buyers at that time, the equipment came without core parts of the process controlling software.
If the magnet production was still possible based on the second-hand equipment, why don’t USA Rare Earth start with magnet production from third party raw materials to prove that it works? Proof of concept, so to speak.
We analysed Texas Minerals’ Round Top before. A TREO of 0.063% in hard rock, not ionic clay:
126 metric tons of total rare earth oxides (TREO) in the measured category,
463 metric tons TREO in the indicated category, and
Ucore acquired the Property pursuant to a series of option and purchase agreements, together with Ucore’s own mineral-claim staking activities in 2006 and 2007. Due to recent inbound enquiries, the Company is exploring the possibility of a transaction involving only the Ross-Adams Zone,leaving the Company’s Bokan-Dotson Ridge Heavy REE Project intact and the approximately seven other historical mineralization zones unaffected.
No return to the roots, obviously they want to sell it or monetise in another way.
//Prices
Price change since MIIT intervened in the pricing:
Please do consider, that 5% of the price changes is the drop of the value of the RMB towards the US dollar.
NdPr, Neodymium Oxide and also raw materials creep up again.
As ever, these are ex works China prices incl. 13% VAT for the most common qualities of rare earth oxides/metals and their raw materials, converted at the official onshore RMB/USD exchange rate. Actual offer prices will differ.
Thank you for reading and enjoy the last few days of the working week!
