China RE Group in SG; On IAC, Brazil and radioactive content; Is Vietnam really the better China?; EV piston-seizure?; Lynas, Hastings, Rainbow, Star Group, Ionic, Ucore, Viridis, MP vs. Neo +more
Rare Earth 30 April 2024 #147
Brazil Gold Rush - Ion Adsorption Clays
There is a non-stop flurry of announcements from junior rare earth miners about ever bigger, ever better, ever more exciting discoveries of ion adsorption clay rare earth deposits (IAC) with advantageous compositions of rare earth elements contained.
They’d like to call them heavy rare earth deposits, which is of course a misnomer, as they still contain proportionally 50-60% and up of uneconomic lanthanum and cerium, and as a trade-off also contain pretty high proportions of yttrium, which one rare earthling nominated as “the next lanthanum.”
Another difference to other traditional rare earth resources like monazite and bastnaesite is, that the the proportional contents of heavy rare earths in IAC is significantly higher, which promises better commercials.
The significant downside of IAC is, that the concentration of rare earth elements in the clay is tiny and the only commercially viable way of mining them is in-situ leaching with an ammonium sulphate solution, more often than not resulting in ammonia pollution of ground and surface water. Destruction of livelihood ensues.
Cases in point: Southern China and Myanmar, with candidates Malaysia and Laos soon catching up.
There is a much more benign way of in-situ leaching IAC with magnesium sulphate, but this know-how is embargoed by the People’s Republic of China. Licensing of this and many other processes is impossible because doing so is illegal in China. Same goes for the recipe for calligraphy ink. One China’s many contradictions: demanding cooperation while not offering any.
Apart from that, Brazil rare earth junior miners implicitly surf on a buzz-word created in Malaysia, a country, which has been subject to the worst known rare earth related radioactive poisoning disaster outside China, in Bukit Merah during the 1980s and 1990s. Ever since Malaysia has been allergic to anything radioactivity-related, which caused Lynas a lot of trouble.
IAC: Non-Radioactive Rare Earth Mining?
In order to look at some reference related to Brazil, we dug in our treasure trove of the Serra Verde IAC project in Brazil, who offered this presentation in 2016:
The measured and indicated TREO is 0.15%. The measured and indicated contents of thorium oxide and uranium oxide are 106 ppm + 14 ppm = 120 ppm (0.012%).
In other words, the proportional radioactive element content is almost 8%.
Not different from monazite
Say, in a mixed rare earth carbonate 60% TREO, the thorium- and uranium oxide content could be almost 5%, equivalent to most monazite 60% TREO concentrates. Such content would make it International Maritime Dangerous Goods Code Class 7. Unsaleable to almost all destinations/users on this planet.
Yes, China can treat the radioactive contents of monazite. There is a supply chain for that. But that does not mean, that China buys everything that is radioactive, like, say, radioactive NdPr.
Giving back to nature
A certain junior miner once presented, he would be giving back the Th/U to nature. This is nonsense. A highly concentrated form of Th/U is no longer the comparatively benign diluted content in the ore before. Hence there is no such thing like “giving it back to nature.”
No more Bukit Merahs
The rare earth industry needs another Bukit Merah as much as we need a third shoulder. Be open about it. Deal with it properly, compliant and responsibly.
Trying to hide or beating around the bush will instantly trigger the predatory instinct of The Rare Earth Observer.
//Politics
China Rare Earth Group Chairman in Singapore
Ao Hong (敖宏) Secretary of the Communist Party Committee- and Chairman of China Rare Earth Group Co., Ltd, as well as member of the Chinese People's Political Consultative Conference (Population, Resources & Environment Committee) visited Singapore.
Who is Ao Hong?
Ao is a metallurgy graduate from Kunming Institute of Technology and he started his career in 1982 as an engineer at Beijing Nonferrous Metals Research Institute (Grinm), arguably one of the world’s leaders in R&D of rare earths.
After having earned a master’s degree from Central South University of Technology in Changsha, Hunan, (formerly known as Central South Institute of Mining and Metallurgy), he rose through ranks and became
Secretary of the Party Committee and Vice President of Beijing General Research Institute of Nonferrous Metals (Grinm),
Chairman of Grinm Semiconductor Materials Co., Ltd.,
Chairman of Guorui Electronic Materials Co., Ltd.,
Chairman of Beijing Guojinghui Infrared Optics Technology Co., Ltd., and
Chairman of Hong Kong Guojinghui Electronics Holdings Co., Ltd .
From 2005 he served as deputy general manager of giant China Aluminum Corporation, rising to chairman of the supervisory board. During his time in office China Aluminium successfully and substantially invested in the largest aluminium company in the world, Rio Tinto.
In December 2021 he was transferred to his current position.
In short, you are looking at a highly trained, formidable expert of China’s nonferrous metals sector. There were times in China, when his previous and current position would have been considered vice-ministerial rank.
Ao’s only blemish is his former affiliation with the now largely “harmonised” Communist Youth League of China, which was the party-faction of Xi Jin Ping’s predecessor and foe Hu Jin Tao, and, among others, Hu’s protege and former prime minister, the late Li Ke Qiang. At age 63 and with this blemish, Ao’s current offices are likely the highest he will ever rise to.
China Rare Earth Group
As per our count, Ao Hong’s China Rare Earth Group consists of 110 rare earth companies, twice as many as China Northern Rare Earth (Hightech) Group.
According to China’s export statistics, 80% of China’s rare earth export value (2023) should have been generated under control of China Rare Earth Group.
Inversely, China Northern hold 80% of China’s rare earth reserves.
Agreements
Hunan, Yunnan, Sichuan and Jiangxi provincial governments and government entities signed agreements with China Rare Earth Group. While we are not privy to each agreement’s details, we understand from China’s media that the agreements assign far reaching rights to China Rare Earth Group, but also contain obligations for upgrade, modernisation and technological advancement.
Ao’s view
As a member of the National Committee of the Chinese People's Political Consultative Conference he aired his characterisation of China’s rare earth industry during the “2 Sessions” in March 2024:
Low resource allocation efficiency
Inhomogeneous and disorderly competition (isn’t “disorderly” the essence of competition?)
Insufficient industry synergies, and
Obvious lag in basic rare earth research and high-application technology (yes lag, not lack)
Singapore
Ao joined the MMTA International Minor Metals Conference 2024, but not the 1st Asian Rare Earth Conference, both held in Singapore consecutively.
Bewilderment
Ao had a meeting with the organisers and the Minor Metals Trade Association (MMTA) during which he requested a list containing the Chinese members of MMTA and demanded cooperation.
This is somewhat bewildering given the fact, that the MMTA member list is available online, showing 16 corporate members from China.
Our take
Ao officially came to Singapore in order to meet with Vital Materials (广东先导稀材股份有限公司). The Chinese company had received a substantial boost after it acquired inventory from the smoking rubble of China’s Ponzi scheme, the Fanya Metal Exchange in Yunnan, home province of Ao Hong.
Vital Materials today is a world leader in high purity minor metals. Possibly Ao may be looking for something like this for his underdeveloped rare earths value chain in Sichuan, whose rare earth industry he has inherited from Jiangxi Copper. This company of China’s military-industrial complex had cleaned up the utter rare earth mess in Sichuan for more than 10 years.
We are tempted to think Ao perhaps simply wanted to identify more Chinese partners via MMTA.
China’s overcapacities
China and the rest of the world had the fruitless, endless discussions about overcapacities long ago. China’s officialdom rejects that there should be overcapacity in China, ever.
If there are no overcapacities in China ever, we really wonder what China’s Great, Fearless Leader was fighting back then in 2016. Windmills?
The old problem in the ‘new era’
Arguing about overcapacity is entirely futile as one inevitably runs into a definition problem, even though fighting overcapacity with Chinese characteristics was, is and remains core objective of Xi Jin Ping’s ‘supply-side-reforms.’
On good advice, the EU at the time changed the issue from ‘overcapacity’ to ‘overproduction’, which pulls the carpet under China’s overcapacity-reasoning and makes the case infinitely more difficult to argue for China.
Example: Steel
There is precedence of China accepting, that steel exports in excess of 10% of crude steel output evidences overproduction. China did take action (afterwards largely circumvented by steel makers, whether state-owned or private).
What was good advice then is still good advice now, replace the term overcapacity with overproduction.
UN Appoints Panel to Push Responsible Extraction of Critical Energy Transition Minerals
UN Secretary-General António Guterres has launched a global initiative to create guidelines that guarantee the ethical and sustainable extraction of minerals, which are essential for the development of renewable energy technologies. The move is in response to the growing demand for these resources. Using the UN's capacity to bring people together, Guterres is mobilizing governments and stakeholders from all points of the minerals value chain, realizing how important it is to protect social and environmental standards while promoting equality in the energy transition.
It will be a panel of 22 countries, incl. China and India, which will need to come to agreement.
India
With Centre’s Incentive Scheme, Raj To Restart Auction For Rare Earth, Potash
The state govt has stopped the process for awarding exploration licences (EL) for rare earth minerals and potash and will restart the exercise to incorporate an incentive scheme for private bidders which will soon be issued by the Union mines ministry.
The state mines department had started the auction process for awarding two ELs for rare earth minerals in Jodhpur-Barmer and Jaipur-Nagaur-Sikar regions.
The same process for potash exploration in Sriganganagar and Hanumangarh region had also started.
In the amendments to the MMDR Act in 2023, the Union mines ministry introduced a provision of grant of EL for minerals such as lithium, copper, titanium, REE, molybdenum, potash, and tin through active participation of the private sector. It said that EL auctions will play a pivotal role in augmenting domestic production of critical and deep-seated minerals.
On March 6, the state mines department had applied to the Centre for exploration licenses for two blocks of rare earth elements and one block of potash and later released the tender document on its portal.Along with Rajasthan, Karnataka had also started the EL auction process of one block.
Coordination problems?
Viet Scandals Keep Coming
Sources in Hanoi say that police have arrested Nguyen Duy Hung, a young male relative of Vuong Dinh Hue, since 2021 has chaired Vietnam’s National Assembly. Hue has been tipped as the likely successor to Nguyen Phu Trong as General Secretary of the Communist Party of Vietnam, the country’s most powerful political position, at the 15th Party Congress in January 2026. Hue is a former deputy prime minister supervising economic matters as well as former chief of the Hanoi Communist party.
Nguyen Duy Hung, who is an aide to Hue as well as a relative, is said to have been arrested on his return from a trip to China, raising speculation that another major corruption scandal may be about to erupt.
As with the “Tigers and Flies” campaign of Chinese leader Xi Jinping, it is questionable if it is possible to root out corruption in an economic and political system that seems to make it generic. Xi started the Tigers and Flies campaign when he became general secretary in 2012. Twelve years later, the anti-corruption campaign has claimed five national leaders, more than 120 high-ranking officials, about a dozen high-ranking military officers, several senior executives of state-owned companies, and 2.3 million civil servants. Despite that scandal, as late as last December, 70 high-ranking members of China’s elite Rocket Force were cashiered. In October, authorities ordered the arrest of former Bank of China Chairman Liu Liange on suspicion of bribery and illegal lending. Some 1.28 million civil servants were disciplined in 2023, according to Xinhua. Clearly, something isn’t working in either the Tiger and Flies or Fiery Furnace campaigns.
The parallels are hard to overlook.
While there are thousands of years of Vietnam struggling with extension of hegemony from its northern neighbour, then the unforgivable support of China for the genocidal regime of Pol Pot in Cambodia, which Vietnam put an end to, only to be invaded by China in revenge, one should not forget that socialism knows no national borders. In our view, in terms of Marxism-Leninism, the communist parties of Vietnam and China may be considered broadly aligned.
Real existing symbolism
In recognition of this alignment on meetings of the general secretaries and other bilateral official exchanges also each other’s communist party flags are displayed:
Communiques read like this:
At these talks and meetings, the two sides inform each other about the situation of their respective parties and countries; exchange ideas and reach many important common perceptions on the relationship between the two parties and countries as well as the current international and regional situations.
The two sides hold that Vietnam and China are both good neighbours and good friends sharing one strip of mountains and rivers, and good comrades and good partners with the same purpose, sharing a common destiny…
Vietnam experts point out, that Fiery Furnace campaign seems to target mostly China-friendly officials in Vietnam. The same experts claim, that an alignment of Chinese and Vietnamese objectives would be unthinkable, almost absurd.
The consequence of the very fact that there even are CPV officials deemed too friendly towards China seems to escape these experts.
For general aspects of communist rule in Vietnam, see the “2022 Country Reports on Human Rights Practices: Vietnam” by the Bureau of Democracy, Human Rights and Labor of the U.S. State Department.
We are very sceptical of Vietnam and do not believe it is a good place for strategic dependencies, not at all.
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