China RE Results Q1-Q3; RE Prices Rise Strongly; Alternative Magnets;

Rare Earths 2020 November 9

China’s RE companies published their quarterly results, and this is what China Northern chairman Zhao Dianqing talks about, when he demands all loss making rare earth companies to be closed:

We speculate, China Northern, being a light rare earth producer, want the heavy rare earth assets of Minmetals, and they want them cheap.


Rare earth oxide prices moved up markedly this week while the RMB/US$ exchange rate remained unchanged at RMB 6.69/US$1 beginning and end of the week:

Our long term table looks like this:

Basically, this week’s price movement confirms the long term trends in magnetic materials.

Regarding the price increase this week, according to Chinese sources, market fundamentals have not changed, neither supply, nor demand, spot availability or inventories. No change.

But what has changed is, that some sizeable buyers now want to lock-in the current prices for the long term.

Seemingly they read The Rare Earth Observer.


No matter if you are a US$ 10 mio or a US$ 1 bio rare earth investment, there is no serious investor in sight.

Four reasons for this:

  1. The general risk of junior miners failing, regardless of the metal/mineral.

  2. The particulars of the rare earth market and related big question marks behind the feasibility of RE projects.

  3. Investors have become used to instant, at most quarterly gratification, which makes them unresponsive to multi-year risk investment.

  4. Practically all junior RE miners do not have the critical mass to contribute to capex meaningfully.

Even a visionary like Elon Musk, who called for more sustainable nickel and who can see rare earth potential, shys away from dipping into his petty cash and do it himself.

Opening certain junior miner’s large rare earth deposit and producing large quantities of rare earth oxides will create another dependence: The dependence on the ability to sell into the large China rare earth market.

The big rare earth deposits won’t live without China, its market and its investors, while most of the small RE deposits are not economical to begin with.

In terms of western, China-independent rare earth supply, if that is still wanted, different concepts are needed.

And therefore the approaches of Geomega, USA Rare Earth (minus Round Top), Vital Metals (Nechalacho), Rare Earth Salts, Medallion (minus the by-product story), REEtec and Energy Fuels look ever more attractive.


If you are exploring a carbonatite deposit, you may really want to watch this:

Thanks for reading and have a great, rare-earthy week ahead!

//Companies

Energy Fuels Produces First Rare Earth Element Concentrate on a Pilot Scale at its White Mesa Mill

This REE Concentrate was produced using existing infrastructure and technologies at the Mill from a sample of monazite sands from a North American source. Monazite sands are a valuable natural uranium ore, which also contain high concentrations of REEs. The Mill recovered the high concentrations of REEs in the monazite sands, in addition to the contained uranium which will be sold into the nuclear fuel industry. The REE Concentrate produced this weekend is of high purity and is ready to be sent to a separation plant and further downstream REE processing facility for final acceptance test work.

Comment: That is a pie in the face of Medallion Resources

Rainbow Rare Earths' sign binding agreement for Co-Development of the Phalaborwa Rare Earths Project

Rainbow Rare Earths' (LON:RBW) George Bennett joins Proactive London about the announcement of the binding Agreement for Co-Development of the Phalaborwa Rare Earths Project.

Bennett explains the details of the area, located in South Africa, which comprises approximately 35 million tonnes of gypsum resulting from historic phosphate hard rock mining, containing rare earth elements (“REE”).

He explains the estimated average in situ grade of 0.6% Total Rare Earth Oxide (“TREO”), based on previous sampling campaigns.

Comment: So Rainbow follow the same concept as Yara, Ceritech, REEtec and Mosaic.

Mkango starts drilling for rutile, ilmenite at Malawi licence

SX-V- and Aim-listed rare earths developer Mkango Resources has started with an extensive hand-auger drilling and soil sampling programme to identify rutile prospects within its 869 km2 Mchinji licence, in Malawi.

Comment: Mkango trying to become a mineral sands company in landlocked Malawi?

Lacking Major Investors, SW Nebraska Niobium Mine Remains Stalled

NioCorp, the company trying to create a billion-dollar mining operation in Johnson County, Nebraska, concedes delays in pulling together financing for the project are frustrating but again asked for shareholders' patience. The comments came Thursday following the company's annual meeting. 

If constructed, the Elk Creek mine would extract Niobium and Scandium hidden beneath farmland in southeast Nebraska. 

ROSATOM starts production of rare-earth magnets for wind power generation

Link by The Rare Earth Investor

In total, the contract between Elemash Magnit (an enterprise of TVEL in Elektrostal, Moscow region) and Red Wind B.V. (a joint venture of NovaWind and the Dutch company Lagerwey) foresees manufacturing and supply over 200 sets of magnets. One set is designed to produce one power generator.

Tanzania readies for rare-earth metals mining

TANZANIA is in the last stages of approving a permit for the country's first rare earths mine to Australian company Peak Resources Ltd, as the government seeks a bigger share of revenue from natural resources.

According to a Bloomberg report, the state is also finalising a gold-mining licence for another Australian company, OreCorp Ltd, in the north-west part of the country.

Comment: This is Peak Resources lifeline. Key executives including CEO Smith have already left the company.

Hudson Resources Announces Completion of Initial Niobium Exploration Program at the Sarfartoq Project in Greenland

The Sarfartoq Carbonatite Complex is unique in terms of the niobium and tantalum concentrations, which are unusually high in comparison to any other such deposits throughout the world (https://hudsonresourcesinc.com/projects/niobium-and-tantalum/). It is one of the larger carbonatite complexes with approximate dimensions of 13 X 8 km. It is located near tidewater and adjacent to very good potential hydroelectric sites. The mineral of economic interest is pyrochlore, which is a niobium and tantalum oxide.

A total of 35 samples were collected from outcrop along the 112 meters of exposed pyrochlore mineralization, which host the niobium. Three samples were also collected along the strike length for mineralogical work.

//Science

Scientists Design New Lightweight Magnets With Outstanding Properties

Magnets are an integral part of our everyday lives and are found in many medical and electronic devices, including household appliances, electric motors, and computers. The demand for new magnetic materials has significantly increased in recent years. Many of such materials are composed of metallic elements or rare earth metals that can be used at room temperature. In 2019, the global market for these inorganic magnets was worth US$ 19.5 billion, and is expected to reach US$ 27.5 billion by 2025. However, inorganic magnets can be expensive to fabricate and access to their constituent elements is often limited.

For decades, chemists have been trying to fabricate high-performance magnets at low energy and financial cost using molecular units of abundant metal ions and inexpensive organic ligands. So far, very few molecule-based magnets operating at room temperature have been reported, and the few known examples cannot store information.

Comment: You really, really want to read this article.

//Market

Will Rare-Earths be Eliminated in Electric Vehicle Motors?

Magnetic materials are key to producing electric vehicles. Many of the electric vehicles on the market use kilograms of magnetic materials to drive their electric motors. In fact, over 80% of electric cars sold globally utilized permanent magnet-based motors in 2019. These magnets are typically made with rare-earth materials such as neodymium and dysprosium, which have a very geographically constrained supply chain. China accounts for the vast majority of rare-earth production worldwide and this has, in the past, led to huge price volatility. In 2011, after China restricted its exports of rare-earths, the price of neodymium and dysprosium rose by approximately 750% and 2000% respectively.

Vehicle manufacturers are aware of these issues and many have made statements about either the elimination or reduction of rare-earths in their electric motors. Renault's Zoe has utilized a wound rotor configuration to replace magnets with copper windings, BMW's new 5th generation drivetrain has eliminated rare-earths and Audi has opted for an aluminium rotor induction motor for the e-tron. A variety of companies, including Bentley are also investigating switched reluctance motors for EV applications which require no magnets or copper in their rotors.

However, despite these trends, the new IDTechEx report "Materials for Electric Vehicles 2020-2030" finds that in recent years, there has been an increased shift towards more permanent magnet-based motors: 2019 saw this increase to 82% compared to 79% in 2015. Permanent magnet motors typically have better efficiency during normal driving conditions than their alternatives, this in turn can result in improved driving range. For this reason, we have seen Tesla transition from using copper induction motors in the Model S and X to using a permanent magnet motor in the Model 3 and Y (although dual motor variants use an ACIM on the front for a performance boost). Additionally, the Chinese electric vehicle market is the largest in the world and due to their control of the rare-earth supply, most Chinese vehicle models utilize permanent magnet motors.

Comment: As per our unscientific assessment, EV were <5% of magnet materials consumption last year.

The rare earth industry continues to standardize the price mechanism and still needs to be improved

Liu Haifeng believes that, from a development perspective, constantly filling in shortcomings and using electronic trading platforms recognized by all parties will help further improve the price formation mechanism. However, the current system design, corporate governance, transaction mode, etc. still need to be continuously improved to meet the needs of market transactions of all parties. In addition, due to the small scale of the rare earth market, how to avoid malicious speculation and stabilize market expectations so as to promote the healthy development of the rare earth market is also the focus of attention.

Comment: A lot of political and unrelated gibberish in this, however, what this gentleman is talking about is socialist style distribution. Everyone gets what he needs, at regulated prices. No price movement, no hoarding, no shorting. Anyone who speculates is malicious, an enemy of the people.

The online steel markets in China, based on physical steel market places they own, at the peak more than 170 (many endorsed by central government ministries), are well used, however, none except one turned out to be profitable.

The online steel markets did standardise the prices of the main varieties, i.e. minus a freight differential depending on location all prices for all categories are almost the same across online platforms.

But they neither prevent price surges, nor do they stop price declines.

The one steel online platform that is profitable is the China Railway-Steelhome joint venture. China Railway is the largest steel buyer in China and the nation’s largest steel stockist, that big, that the disappearance of more than 400,000 tons of steel products from inventory during one year went completely unnoticed.