Don Quixote; China RE Imports Q1 Drop 30%; Lockdown suffocates RE demand; Metals for Clean Energy; Australia-Canada-US deals; Prices fall;
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Don Quixote; China RE Imports Q1 Drop 30%; Lockdown suffocates RE demand; Metals for Clean Energy; Australia-Canada-US deals; Prices fall;
Rare Earth 2022 May 4
A very powerful speech on Congo, mining and Africa as a whole. Food for thought, or rather, a call for action:
Don Quixote’s war against the windmills…
…also known as “zero-COVID policy” in China, chasing a virus variation that seems to be barely more harmful than the flu virus elsewhere on the planet, causes ever more social and economic damage.
China’s officialdom, however, is entirely unreceptive for private advice and when the EUCCC goes public instead, China’s officialdom complains about the EUCCC being “too public.”
The current lockdown is even more extreme than in early 2020, and the economy is crashing almost as hard. Just to give you a few numbers: Freight traffic volumes in the Shanghai metropolitan area plunged by 81% year-on-year in the first three weeks of April. Jiangsu province recorded a drop of 30%. Nationwide, freight volumes in April are down 15% year-on-year.
Remember, 2021 was a banner year for China's economy, especially in the manufacturing sector. January started at a high level, February and March were still okay. But from March 28th, with Covid in Shanghai, everything collapsed. The problem goes far beyond Shanghai: I hear of car manufacturers that produce in Jiangsu province and are not directly affected by the lockdown. But they can’t get parts from their hundreds of subcontractors, either because they can’t produce or because shipments can’t get through the lockdown areas.
This also applies to rare earth companies in East China around Shanghai, e.g. almost the entire China Aluminium Rare Earth Group, Solvay, China Rare Earth Holdings, etc.
The official number is 45, however, according to our information, more than 90 cities and towns in China are currently under some form of lockdown. So it would actually be hard to find anyone in any industry who is not affected.
The political leadership can’t admit, so close to the Party Congress, that there is another way in dealing with Covid. They can’t admit that people in Europe can fly on vacation again and live largely a normal life. And they can’t admit that it would make sense to use mRNA vaccines in addition to the Chinese vaccines.
This zero-COVID policy and its implementation is reminiscent of the 4-Pests Campaign during the Great Leap Forward campaign in China, both utter, thorough, complete disasters in the name of ideological fervour.
The campaigns didn’t stop until tens of millions of people had starved to death, 60 years ago.
“If supply chain companies could not find a way to resume operation and production, it’s likely all Chinese OEMs may have to suspend production in May,” He Xiaopeng posted on his personal WeChat and Weibo accounts Thursday evening, referring to automakers. “Good news is some ministries and related departments are going all out to coordinate. Hopefully more government agencies could support joint efforts.”
Some automakers have been stopping output in the world’s largest vehicle market. Tesla Inc.’s Shanghai factory has been shut down since March 28 because of restrictions in the city. Volkswagen AG was forced to suspend production there earlier this month, while Chinese EV upstart Nio Inc. said Saturday it halted production and delayed deliveries because many suppliers had to close shop.
China rare earth imports
In Q1 2022 China imported 33,530 mt of rare earths raw materials, 14,760 t or 30% less than in Q1 2021.
While shipments from almost all origins were reduced, the big declines were Myanmar, -9,400 t or -95% compared to Q1 2021 and -8,800 t (100%) of monazite from Madagascar and low TREO monazite from Rio Tinto, whose commercials may have been killed by increased freight rates to China.
Increased volumes came from Malaysia at 2,120 t, up 255% y-o-y, as we see for the first time mixed rare earth concentrate 1,130 t from Malaysia to China. Another part of the increase is someone offloaded some 500 t of lanthanum/cerium carbonate to China at a knock-down, drag-out and once-and-only price, but at the same time shipped less heavy rare earth “SEG” than Q1 last year to China.
China’s imports of monazite concentrate, mixed rare earths and other concentrate from Vietnam went up nearly 250% to 3,000 t.
Also Bastnaesite exports from USA to China came in slightly higher than last year at 24,500 t.
Note that there are several foreign-owned entities in China processing rare earths and also bringing in material from abroad.
Adamas issue their latest report and forecast for 2035:
Market for Magnet Rare Earth Oxides to Increase Three-Fold by 2035: With total magnet rare earth oxide demand forecasted to increase at a CAGR of 8.3% and prices projected to increase at CAGRs of 3.2% to 3.7% over the same period, Adamas Intelligence forecasts that the value of global magnet rare earth oxide consumption will triple by 2035, from US $15.1 billion this year to US $46.2 billion by 2035.
Annual NdFeB Shortages of 206,000 Tonnes Expected by 2035: Constrained by an expected under-supply of neodymium, praseodymium, dysprosium and terbium oxide from 2022 onward, Adamas Intelligence forecasts that global shortages of NdFeB alloys and powders will amount to 66,000 tonnes annually by 2030 and 206,000 tonnes annually by 2035 – nearly one-third of the total market.
Annual NdPr Oxide Shortages of 68,000 Tonnes Expected by 2035: Constrained by a lack of new primary and secondary supply sources coming to market from 2022 onward, coupled with the inability of existing producers to steadily increase output at the rate of demand growth, we forecast that global shortages of neodymium, praseodymium and didymium oxide (or oxide equivalents) will collectively rise to 21,000 tonnes annually by 2030 and 68,000 tonnes by 2035 – an amount roughly equal to China’s total production last year.
As ever, Adamas do an incredibly detailed analysis which they base their forecast on, just looking at the table of contents you can guess it is a piece of art.
Adamas’ predicted NdPr shortage of 68,000 t in 2035 is basically 15 times the largest capacity of any junior RE miner hopeful out there.
It is also more than twice the current output of the largest rare earth manufacturer in the world, China Northern Rare Earth (Group) Hi-Tech Co., Ltd., being fed from the largest rare earth deposit on the planet, Bayan Obo.
The fly in the ointment - we repeat
we’d like to repeat that 50 years ago the samarium-cobalt (SmCo) permanent magnet was state of the art, deemed irreplaceable.
However, cobalt prices were high, making the SmCo magnet expensive:
Even though it had been deemed impossible to create a permanent magnet based on cheap iron, research was successful. The NdFeB permanent magnet was born with some vastly improved properties over SmCo magnets and patented 1982.
40 years later the SmCo permanent is just a tad more than 1% of the total permanent magnet output.
In view of the current situation with increasing shortage have caused prices for magnetic rare earth raw materials to sky-rocket, there is intense research going on into
refining the NdFeB magnet for ever higher strength on ever lower raw material input, and
replacing the NdFeB magnet altogether, which currently is deemed as irreplaceable as the SmCo magnet once was.
Perhaps NdFeB will be going down the same road as the SmCo magnet did?
There is a somewhat comparable development in batteries, albeit much more advanced: The solid-state battery, non-flammable, which rather sooner than later will replace the lithium-ion battery.
Honda and Nissan recently committed to developing solid-state batteries for serial production, Honda until 2025, Nissan until 2028. Sounds fantastic!
However, China’s Dongfeng Motors already have trial cars with solid state batteries on the road and plan to mass market them by Q4 2022.
On both sides of the Atlantic, leaders promise that more green energy—solar, wind, and electric vehicles—will cure Western overreliance on volatile oil and natural gas and further isolate Russia.
Producing energy from wind and solar machines, and especially from batteries, requires an enormous increase in supplies of copper, nickel, aluminum, graphite, lithium, and other minerals.
The same goes for the suite of minerals necessary to build the tens of thousands of wind turbines and millions of solar modules needed for green plans.
Unfortunately, as the International Energy Agency (IEA) and others have pointed out, the supply of critical minerals isn’t expanding apace. Not even close. That’s an incendiary formula for inflation.
There are plenty of rare-earth deposits in the USA, but extracting them is not photogenic. Barnard laments the “regulatory minefield of labyrinthine local, state and federal rules” that has turned permitting into a two- to three-decades adventure in frustration.
The site is managed and edited by Thomas Richard, a freelance semi-retired writer who has been published in LifeZette, Breitbart, the now-defunct Examiner.com, and other news outlets.
Our goal is not to change your mind, but to share with you all the studies and papers that consistently contradict the theory of CO2-driven global warming. And to have a little fun when we can.
Mr Richard’s solution to the problems appears, we should simply reject that greenhouse gasses accelerate climate change and all will be hunky dory.
Apart from his greenhouse gas denialism, the concerns Mr Richard describes are real.
Since ca. 9 state and federal agencies are concerned with licensing all aspects of a mine operation in USA, how about a little efficiency in Washington DC?
China, most certainly not a role-model of small government and bureaucratic simplicity, realising how agonisingly painful it was for foreign investors to set up shop in China, introduced the one-stop registration system for foreign investors with guaranteed application-to-license periods. Fast, efficient, and mostly pain-free (until you start operations).
If it is not too much loss of face, how about learning something from China and introducing a one-stop mining license for miners and a stream-lined application process? It could shave years of the process.
No super cycle?
The Metal Miner commented in its newsletter of April 20, 2022 on Mr Richard’s opinion piece:
That said, this article often counters the MetalMiner viewpoint that we are NOT in a new “super cycle.” a term referring to 10 years of sustained demand. Indeed, it’s hard to conceive of an environment where every day Americans would sign off on such high gasoline and electricity prices to facilitate a changeover to green energy. Of course, anyone curious as to the durability of green mandates need only wait for the results of the mid-terms this fall.
The Metal Miner may be right that this is not a regular super cycle induced by the regular course of economic activity, that we are used to. It was induced by policies trying to pull the emergency brake on greenhouse gasses output, which created the outsized demand.
But even if US voters take revenge at the polling station for higher energy prices and for the impossibility of doing something about it, this won’t change the mission the most of the rest of world has embarked on.
Also not, if a Trump II administration would predictably yet again opts out of the Paris Climate Agreement.
Last but not least
Mr Richard also repeats a misleading spin that was designed for naïve US investors, to imply that MP Materials had control over what happens to their product, further implying that they would take the finished product from China back to world markets:
Mountain Pass, the sole US operating rare-earth mine, lost two years of production due to a 2016 bankruptcy and still sends its mined ore to China for processing.
It is plain and simple fact, that export processing of imported rare earth raw materials has been illegal in China for many years.
Truth is, the US import those rare earths it needs from a variety of China’s exporters and MP Materials are no part of that, also because there is no demand for NdPr in the US as yet.
The report found that to achieve net-zero carbon emissions by 2050, overall mineral requirements would need to increase six-fold. In that scenario, the demand for lithium would rise by 90 percent. But those minerals have to come from somewhere, and that often involves harmful sourcing, increased greenhouse gas emissions, and limits on the mineral supply.
This doesn't mean the clean energy transition isn’t clean or possible. It is, and these challenges do not justify the ongoing, unchecked use of fossil fuels. It does mean, however, that obstacles now and on the horizon need to be addressed to get the most out of the transition.
What was thoroughly disheartening was the panel discussion thereafter, starting with the video address of EU Commissioner Breton, who spiced up his grand-standing with pictures from visits to recycling companies.
It also appeared during the panel discussion, that the EU had placed a lot of hope on recycling of critical metals being the solution to EU problems.
This hope was thoroughly crushed by Mikael Staffas, president of Eurometaux, who pointed out that the envisioned total ban on lead by the EU Chemical Agency would put a terminal end to much critical metal recycling in the EU.
He also put across in his adorably quiet, dry, factual but pointed style that at the current state of affairs there will be no more mining in the EU in future.
In terms of rare earths, Julia Poliscanova, Senior Director, Vehicles & E-Mobility, Transport and Environment of Climate One nailed it:
The magnet recycling business case is simply not there.
She also pointed out, that often national regulators were simply over-challenged by their task and overwhelmed by the workload, often not even equipped with basic data processing capability.
We’d like to add: Political pressure resulting from voters’ “not in my backyard” mentality does not really aid the issuance of exploration and mining permits either, plus endless lawsuits from environmentalists who argue the case of some earthworms and toads, while the rest of the world tries to ensure the survival of mankind.
Most disappointing, however, was Kerstin Jorna, Director General, DG Grow, European Commission, who said the EU had not anticipated the demand side as featured of the KU Leuven report (minute 52).
After all these years of pumping millions and millions of taxpayer EUR into consulting reports, failed projects, countless debating clubs and events, how on earth could she possibly have missed the demand side? Breathtaking.
An anonymous comment to the panel said, that other countries act first and regulate later, while the EU tries to regulate what is not even there yet.
We concur. At this time best practises elsewhere are simply not good enough for the EU.
Urban Mining Company is entering a new era of growth as Noveon Magnetics. The word Noveon is formed from the words “novo” meaning new and “eon” meaning era. This is symbolic as Noveon is helping define a new era of sustainable magnet production.
We are officially launching our new magnet product, EcoFlux. EcoFlux magnets are sustainably produced and able to meet requirements across the entire performance range with a special emphasis on high-growth, high-temperature applications.
Urban-Noveon quietly move emphasis from basing on recycling only to also using virgin raw materials:
We produce magnets with higher magnetic flux, higher coercivity, increased resistivity and better thermal stability by optimizing the use of materials, virgin or recycled.
This is a conceptual move, as questions around recycling such as availability of scrap and commercial feasibility become ever more difficult to answer, while on the other hand there has been no user of rare earth materials for NdFeB magnets on US soil for a while (exception for magnetostrictive products).
So for North America based rare earth traders like PIDC, C&L, Minmetals, GE Chaplin, Hefa and so on there is now door to knock for NdPr, dysprosium, terbium, and whatever secret ingredient may be contained in EcoFlux, if any.
However, on the sales side it is a thorny, long road ahead for Noveon through the development/design departments of downstream industries, until sales of a new product can get on to a solid footing.
If and when that happens, the off-cut and scrap from own production could theoretically be recycled in-house using the previously touted recycling process.
Canadian clean technology firm Geomega Resources Inc. subsidiary Innord Inc. and Anglo-Australian mining giant Rio Tinto Group are partnering to develop a new method for handling bauxite ore residue (“red mud”) to bring to market recoverable iron compounds found within it.
Per the agreement, Rio Tinto will provide C$1 million of the C$4 million needed to develop a pilot plant and carry out a feasibility study for Innord’s Bauxite Residues Iron Phase Product. In addition, the two parties will review Innord’s Bauxite Residues Technology (IBRT) in parallel, and Innord has agreed to devote the next twelve months to developing and testing a related technology that will produce the same product. That product will subsequently be reviewed by Rio Tinto.
The intellectual property will belong to Rio Tinto at the conclusion of the project, with Innord to receive royalty payments for the technology derived from it.
Mineral Resource Estimate increased to 532 million tonnes at 640 ppm TREO, maintaining a cut-off grade of 200 parts per million (ppm) Total Rare Earth Oxide minus CeO2 (TREO-CeO2)
All is indicated and inferred, nothing is measured/proved.
640 ppm = 0.064% TREO. We still need to see, how they can get the value-carrying contents commercially viable and environmentally benign out of the ground. That is the crux.
If you excavate and move this regolith/saprolite/clay for heap-leaching, like you would do with low content gold resources, in this case 100% of the cost would apply to the 0.064% of value-carrying contents.
Visualise this: A truckload of 40 t of regolith/saprolite/clay contains 26 kgs of rare earths. If the cost of excavation and trucking to the heap should be US$10/t regolith/saprolite/clay, that cost is US$15/kg of rare earth content. To add insult to injury, that is before processing and separation cost.
Rare earths are not valued like gold at US$60,000/kg, in case of the composition of Ionic Rare Earth’s Makutuu we see it rather at ~US$40/kg, cleared for recovery losses.
In fact, even after the breath-taking rise of rare earth prices, for Makuutu and also for other rare earth deposits, rare earth prices are still too low.
“So, how?”, a Singaporean would ask.
A Chinese virtue is patience. Even if only a fraction of Adamas’ aforementioned forecast comes true, it may well be that a “0” is added to the end of at least heavy rare earth prices.
However:
The Makuutu Rare Earths Project is 100% owned by Rwenzori Rare Metals Limited (RRM), a Ugandan registered company. IonicRE currently has earned a 51% shareholding in RRM and may increase its shareholding to 60% by meeting further commitments as follows:
1. IonicRE to fund to completion of a Bankable Feasibility Study (BFS) to earn an additional 9% interest for a cumulative 60% interest in RRM; and
2. A Milestone payment, payable in cash or IonicRE shares at the election of the Vendor, of US$375,000 on conversion of Retention Licence 1693 to a mining licence.
At any time should IonicRE not continue to invest in the Project and project development ceases for at least two months RRM has the right to return the capital sunk by IonicRE and reclaim all interest earned by IonicRE.
Five-hundred and one one-tonne bags of bastnaesite — a red rare earth mineral — were shipped by barge into the Port of Hay River last October after an initial season of mining.
For the next seven to eight weeks, Cheetah will be sending the bags of minerals to a processing facility by truck to Saskatoon, where product will be further refined.
Last October is 6 months ago. Plus 2 months in Saskatoon. It is not that they transport the bags on wheelbarrows, it is probably that the processing facility, originally planned for completion in November 2021, is simply not ready yet.
Schaeffler has agreed a five-year deal with Norway's REEtec to supply rare earth oxides from 2024, said Andreas Schick, Chief Operating Officer of Schaeffler.
"We are transforming into an e-motor supplier and are ramping up significantly," he said in an interview.
"Therefore on the rare earth side we need competent partners, not only going through the standard supply chain through China, we need a local supply chain for Europe."
Schaeffler - a leader in bearings that it supplies to automakers such as Volkswagen, General Motors and Honda - usually buys manufactured components from subcontractors referred to as Tier 2 suppliers.
The company's focus on sustainability made it source raw materials for the first time instead of ready-made magnets, Schick said.
Wait! For theFIRST TIME? Shouldn’t it be the second time?
We thought Schaeffler had signed a 10 year agreement to buy MREC from Hastings, as per Hastings’ press release of June 3, 2020 (no corresponding press release from Schaeffler). Hastings’ future looked so bright! What happened? A bout of amnesia at Schaeffler?
Schaeffler, Germany's fifth biggest auto supplier by revenue, is also working with European partners to use the rare earths processed by REEtec to produce permanent magnets.
When asked if Schaeffler was prepared to pay a premium for domestically-produced magnets produced in a sustainable and transparent way, Schick said:
"From a commercial perspective, it's not a walk in the park, it's a challenge, but that's our commitment to sustainability."
This obviously bases on REEtec’s agreement for Vital Metals’ Canadian raw material.
Apart from the cost, we would challenge the idea, that shipping a concentrate from Canada all the way to Norway for processing (6,500 km straight line distance) and then on to Germany for consumption should be sustainable. One could also consider the fact that there is a rich rare earth deposit in the neighbourhood of REEtec, Fen Complex, 32 km north of REEtec’s location Heroya.
Of course it is over-zealous regulation and not-in-my-backyard mentality that prevents Fen from ever being exploited.
As far as Scheffler is concerned: Diversification of supply? Yes. But sustainable?
Ucore Rare Metals Inc. ("Ucore" or the "Company") is pleased to announce the execution of a Memorandum Of Understanding ("MOU") setting forth certain nonbinding understandings between Ucore and thyssenkrupp Materials Trading GmbH (collectively the "Parties"). The MOU contemplates thyssenkrupp Materials Trading initially supplying a minimum of 1,000 tons per annum ("tpa") of mixed rare earth carbonate for processing at Ucore's Alaska Strategic Metals Complex ("SMC") in 2024, with quantities increasing in subsequent years. The parties have agreed to work toward a 10-year binding contract for the continued and increasing supply of mixed rare earth carbonates ("MREC") for processing, including the consideration of various marketing strategies.
thyssenkrupp Materials (TKM) are part of a struggling German steel conglomerate, under restructuring for years and years. TKM have agreed to off-take this from Hastings, if there should be production 2024.
We don’t see, how transporting MREC 59% for more than 15,000 km straight line should sustainable, from the remote Onslow in Australia, where Hastings’ hydromet plant is supposed to be placed, 430 km from the mining site, via Port Hedland, 500 km from Onslow, and, after at least one transshipment en route to Seattle, for 1,000 km on-carriage by barge to the remote island Revillagigedo, where Ucore’s Ketchikan facility is planned to be located.
At current exorbitant freight rates one could estimate the freight cost to be as much as US$1/kg net, at a 1,000 mt per year that is a whopping US$ 1 million of freight charges for material that contains by volume 41% waste plus 40% of nearly worthless lanthanum and cerium.
Current MREC 70% TREO market price is ~US$10/kg incl. 13% China VAT, so ~US$8.85/kg net of VAT, based on Baotou material.
Hastings’ plan is to produce MREC 59% TREO, not 70% TREO, but there is a difference in RE composition.
Nominally 1 mt of Baotou MREC contains 140 kgs of NdPr 75/25, whereas nominally 1 mt of Hastings MREC would contain 153 kgs of NdPr 75/25 ( Hastings 77%/23% Nd and Pr content is just within the tolerance of +/-2% each as per China Standard GB/T 31965-2015 Grade 040075. N.B.: NdPr 80/20 grade is valued lower than NdPr 75/25).
Data source: baidu.com and Hastings documentation
Nominally, at current prices, on a per kg MREC base Hastings material could go for a 9.3% premium over Baotou’s price. Hastings currently could ask for (net of China VAT) US$9.70/kg.
So, on a CIF base this Hastings-thyssenkrupp-Ucore deal should be ca. US$ 10.7 mio per year at current cost and prices.
If we talk bastnaesite-based product, the Vital Metals deal at 2,200 km distance is clearly the better option.
According to the deal announcement Vital’s material is not only depleted of cerium, a strong sales point (cerium and lanthanum prices are well below the cost of production), but also contains interesting levels of dysprosium, yttrium and terbium.
However, baring the mythical one-fits-all process, this raw material would require a modified process.
Source: Google Maps
Ketchikan’s location is very good, if this is to produce the life of mine 20,000 t of rare earth oxides from neighbouring Bokan’s resource, as per Ucore’s PEA. But in a competitive environment, which right now does not exist but needs to be considered for future, for 3rd party raw material it seems a bit remote.
AGHS was engaged by the Alaska Industrial Development and Export Authority (“AIDEA”) to undertake a technical review of the RapidSX™ technology and to provide an opinion concerning the technical and economic feasibility and scalability of RapidSX™, specifically for the separation of REEs for the production of commercial-grade REOs in Ucore’s planned Alaska Strategic Metals Complex (“SMC“). “After completing our extensive technical review of the RapidSX™ technology, its commercialization development process and its planned installation in the Alaska SMC, it is my opinion that Ucore can credibly and effectively execute its unique business strategy,” noted Dr. Ghahreman.
According to the evaluation:
RapidSX™ process shows itself to likely be 3 times as efficient as CSX, concluding a production plant can potentially have a 2/3 smaller footprint than a CSX plant of the same capacity with an associated separation process capital cost (“CAPEX“) reduction of 50% or better;
RapidSX™ for the separation and purification of REEs is dependent on its chemistry (same as CSX) and, given a smaller footprint for the same throughput, should have an expected operating cost (“OPEX“) of 20% less than CSX for the same purpose;
How they evaluated:
As part of its confidential work, in Phase I (Expert Opinion; Technical Review of the IMC RapidSX™ Separation Technology for Rare-Earth Separation, March 26, 2021), AGHS conducted a literature/data/conversational review of all past and current work associated with the development and commercialization efforts of the RapidSX technology. And in Phase II (Expert Opinion; Technical Review of the IMC RapidSX™ Separation Technology for Rare-Earth Separation – Phase II, January 17, 2022), they observed two rounds of testing carried out at Innovation Metals Corp.’s (“IMC“) RapidSX Commercialization and Development Facility (“CDF“) in Q4-2021 and conducted by IMC’s laboratory partner Kingston Process Metallurgy Inc. (“KPM”). The first test was performed on a synthetic REE solution (a dilute solution consisting of Pr, Nd, Sm, and Gd), and the second test was conducted on a commercial mixed heavy REO sourced from an operating rare earth mine (the source of which remains commercially confidential). All testing was performed by KPM’s personnel under the observation of Dr. Ghahreman, with AGHS receiving the test data/results directly from KPM and evaluating the RapidSX technology based on this data.
Of course AIDEA want to know what they are getting into, before they issue bonds for US$145 mio to finance the Bokan plus probably the RE-separation at Ketchikan. And now Dr. Ghahremanput his good name behind the project, based on data, literature and conversational review, as well as observing experiments.
90% of the projected Bokan revenue depends on dysprosium, NdPr, terbium and yttrium. That is true for everyone.
The operating cost and capex estimates, etc. of the PEA, however, are more than 10 years old, and also Ucore switched concepts/processes several times. So the PEA may be quite outdated.
MP Materials and General Motors simultaneously announce a definitive supply agreement commencing in late 2023 to produce rare earth alloy and magnets for GM's EV programs
The facility will create approximately 150 skilled jobs and approximately 1,300 indirect jobs
MP Materials' Texas magnetics facility will source materials from Mountain Pass, California, and produce magnets powering approximately 500,000 EV motors per year, with potential to scale
The facility is a substantial component of a $700 million investment MP Materials will make to fully restore the U.S. rare earth magnetics supply chain over the next two years.
500,000 motors X 2 kgs of NdFeB magnets = 1,000 metric tons of NdFeB, scrap/offcut not considered. 1,000 mt of NdFeB contain ca. 30% of NdPr metal = 300 metric tons of NdPr alloy (NOT the oxide, which MP also do not produce) plus percentages of dysprosium and terbium.
Without dysprosium and terbium, MP’s NdFeB will de-magnetise rapidly and neither GM nor their customers will derive lasting pleasure from their ‘Made in USA’ EV.
MP do not have resources for dysprosium and terbium, which then gives rise to questions:
Where do MP intend to get the terbium and dysprosium from, if not from China?
And what does that mean in terms of “full U.S. supply chain?
We really wish MP would move past rare earth puberty.
Implementation of the new Strategic Plan is intended to enhance Medallion’s existing REE processing technology portfolio by identifying, incubating and gaining exclusive rights to the commercialization of additional innovative technology platforms across the entire REE value chain and broadening its focus to include other high-performance materials. Medallion believes that its technology portfolio will continue to facilitate the production of materials, deployment of processes, and/or generation of essential data for the clean energy transition.
We don’t know what this announcement is supposed to tell us, other than
The new Strategic Plan that the Company will seek to implement upon completion of the up-listing to NasdaqCM and associated financing includes:
Strengthened executive management team
CEO: Alfredo Ramos Plasencia…
CTO: Kurt Forrester…
Mark Saxon will continue to serve as a Director and strategic advisor.
Red Mountain will also undertake a field reconnaissance trip to Mt Mansbridge to reaffirm all targets prior to drilling including the Déjà vu, Solo, Cow Creek and Kylo prospects.
The near surface, high-grade rare earth Longonjo mine located near to the Atlantic port of Lobito and the recently upgraded Benguela railway line is expected to produce 45,000 tonnes per annum of clean, high value mixed rare earths sulphate with a 20 year lifespan.
The mine, which will be built by the China Great Wall Industry Corporation, will feature hydro-electric power and a tailings storage facility to meet the recommendations of the Church of England Pensions Board and ICMM guidelines.
What track record do satellite communications companyChina Great Wall have in mining in general and in rare earth in particular? About as catastrophic as CITIC were in iron ore and steel?
A blessing, that there are the recommendations of the Church of England for tailings storage. What could possibly go wrong?
Company executive director and CEO, Tim George, who previously worked at Anglo American, said the team are in discussions with three other similar projects that it can’t name but which are expected to come online around the same time and could supply the facility for a short time.
Did the three make the same commitment to “no radio nuclides contained” as Pensana did, in spite of the fact that the UK has permanent disposal facilities for hundred thousands of tons of radioactive waste? And will they supply a Pensana-only sulphate, not the regular feed?
The mine has received financial support from the Angolan Government, which is a 27% shareholder in part through the Angolan Sovereign Wealth Fund.
Angola is used to diamond and gold mining, they seem to have no concept of slim and trim industrial minerals.
//Prices
The short term price development, since the China government voiced its displeasure with high prices:
Except for yttrium and dysprosium, all prices have fallen below the (sky-high) levels of the beginning of the year.
The price decline in March was the quick-fix (we reported) to comply with the government demands of lower prices. A demand, which, given the supply situation, was plainly absurd.
In April the COVID lockdown of Shanghai and lots of other cities, including other core automotive production sites suffocated magnet and RE demand. Nomura Securities estimate 45 cities and towns under partial or complete lockdowns, our sources in China found close to 90.
Also production of RE was affected by these measures. Current situation is that buyers don’t need to buy and sellers anyway haven’t got much to sell either. A stalemate.
Some rare earth analysts in China blame the Ukraine war, using the wrong terminology, as China has officially opted to also call it a “special military operation”.
Because of the war, the land bridge by rail from China to Europe is “broken”, rail transports are now deviated or do not happen at all. Last year, owing to hopeless congestion at Chinese ports, EU importers had opted to pick the goods up at the Chinese-Russian border and carry on by either the Trans-Siberian Railway or by truck all the way. An option, that also does not exist anymore.
The still-stand and massive congestion of ships at Shanghai port in combination with alternatives being off the menu, is strangling China import and export-wise. Yes, ships get re-routed to other Chinese ports, but it is not that these ports had not been busy before and have been waiting for extra workload.
It is a big mess that will need quite a while to clear up.
Lockdown-related Hong Kong’s Q1 GDP sagged 4%. China my be headed for zero growth in 2022, if Sancho Panza can’t talk some sense into Don Quixote shortly.
The USD-RMB exchange rate also plunged owing to capital flight from China, and the stock-markets tanked to multi-year lows.
Just now we hear from Shanghai, that some residents were actually allowed to move outside their immediate neighbourhoods. Has a face-saving route has been determined in order to end the war against the windmills?
And here the traditional price chart:
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.
As ever, so much to talk about, so little time, that is it for today.
