Giant SOE Keeps Polluting while China's Leader Makes Lofty Green Promise at UN; Mysterious Increase of China's RE Reserves; Shenghe's Monazite Gamble; Masked Challenges

Rare Earth 2020 September 27

For us, China Aluminium’s rare earth quotations are always the cheapest, the most aggressive.

And part of the price to pay for that may well be environmental degradation and overall non-compliance. You can read all the dirty details at the end of this post.

This is the very same story as we have seen with Minmetals before, brazen non-compliance.

After 10 years of campaign to impose basic environmental standards on the Chinese RE industry, since 5 years even with a combined task-force of a handful of central government ministries, the basics at these state-owned, colossal companies apparently only marginally improved.

News of China Aluminium’s environmental transgressions broke the very day, that China’s Xi Jin Ping, meanwhile officially assigned the Mao Zedong’s title “Lingxiu” (领袖=leader, guru, father figure, Führer)”, presented his lofty environmental target during a speech to the UN.

He certainly completely fails in appreciating, if behind his back his own people make such commitments look like a farce.

Why is it not possible for the hundreds of bureaucrats working for a decade in the rare earth sphere, to induce compliance in all of 6 state-owned rare earth companies?

The China central government likes to tell us, as much as some of us would love to believe, that it is firmly in control and that central authorities take charge.

Obviously, even after 10 years of concerted enforcement action, also in RE this doesn’t seem to be the case.

China’s historic share of world rare earth reserves. Blue total world reserves, orange China’s reserves and the grey line China’s share.

Note the more than doubling of China’s RE reserves between 2008 and 2010.

In our view, regardless of feasibility, identified RE resources outside China are ~100 mio tons TREO.

Shenghe Resources, shareholders and sole customer of MP Materials bastnaesite as well as substantial shareholder in Greenland Minerals & Energy Ltd., have acquired the land-use right to 270,000 square meters in the Banqiao Industrial District of Lianyungang, a major port city in China’s Jiangsu Province.

The published purpose of this land-rights acquisition is to put a “zirconium-titanium mineral processing” unit with a capacity of 1.5 mio t/y there (some sources report 2 mio t capacity). Currently the feasibility study is said to be undertaken.

Lianyungang already has substantial mineral and fertiliser facilities, and its port is equipped to handle large bulk carrier ships of up to 300,000 t deadweight.

Shenghe Resources, a group company of state-owned China Aluminum, are already active in zirconium and titanium processing through the subsidiary Hainan Wensheng New Materials Group (please don’t visit their website, it is virus-infested), which Shenghe took over in 2015 in order to prevent its collapse.

Wensheng’s nameplate capacity is 750,000 t/y.

We speculate, that the objective of this tripling of Shenghe’s mineral sand processing capacity is focussing on import and process high-monazite content mineral sands which do not fall under import regulations of Cat 7 radioactive monazite, import of which only China’s two nuclear giants could handle legally.

This Lianyungang monazite is probably meant to further substitute the current wave of wrongly-declared monazite imports to China.

Look forward to our upcoming report “Too Cheap: The China Rare Earth Price Conundrum.”

Thanks for reading and enjoy a great week ahead!


CSIR 79th Foundation Day: NML Jamshedpur wins Best Technology Award 2020

National Metallurgical Laboratory ( NML) on the occasion of Council of Scientific and Industrial Research’s (CSIR) 79th Foundation Day celebration received the Best Technology Award in Physical Sciences for 2020 for the developed indigenous technology for ‘Extraction of cobalt and gold from the black cathode material of Li-Co batteries and gold-coated surface of e-waste, respectively’.

n the past, CSIR-NML had transferred similar e-waste recycling processes to various other industries for the recovery of rare, rare-earth, precious and strategic metals. In India CSIR-NML, Jamshedpur is a pioneer for the development of various recycling technologies. The scrap or e-waste recycling sector has noteworthy potential to contribute to the country’s economy and create employment.


The U.S. Government Made a Powerful New Kind of Nuclear Fuel

Could a new blended thorium fuel improve U.S. nuclear power’s outlook? Scientists at the Department of Energy’s Idaho National Laboratory have a new fuel called Advanced Nuclear Energy for Enriched Life, or ANEEL. It's a proprietary mix of thorium and low-enriched uranium, and Forbes’s James Conca says it could help close the gap in a near future where nuclear seems like the only option.

The mix itself is a secret, but thorium—pictured above in pellet form—has continued to gain momentum as an alternative nuclear fuel.

Observations of the varied reactivity of xenotime and monazite in multiple systems

It was observed that xenotime and monazite (both nominally REPO4) behaved differently in extraction systems.Xenotime was effectively unreactive in all non-conventional systems.

Both organic acid leaching and reaction milling and leaching showed similar trends.


Why China's control of rare earths matters

China dominates the world's production and supply of rare earths - obscure elements that are vital for high tech-manufacturing. The FT's Jamie Smyth explains their importance

China’s 2060 climate pledge: long-awaited breakthrough or sugar-coating another decade of rising emissions?

In a surprise announcement at the UN General Assembly, chairman Xi declared that China will aim to peak CO2 emissions before 2030 and achieve carbon neutrality before 2060 – the earlier pledge was for emissions to peak “around” 2030 with no word of what would happen after. While any increase in ambition is a positive signal, the upcoming five-year plan will be a key test of what the new pledge means in practice.

The one-sentence announcement leaves plenty of space for different readings, the least ambitious being that there’s still another decade of time to build more fossil fuel infrastructure and increase emissions. Conventionally, the expected lifetime of power plants, factories and other assets in China is quite short, so 2060 is very far away.

To revive rare earths industry, U.S. looks to the Mojave

Experts warn that the growing hype surrounding the sector masks the huge challenges new entrants face. China’s dominance of the supply chain stretches from mining to the manufacture of magnets and the assembly of electric vehicles.

“The investment risk on any one of these projects is monstrous,” says Jeffrey Wilson, director of the Perth-USAsia Centre, at the University of Western Australia. “If you’re an investor wanting to put capital into that, then it’s got red flags all over it.”

The sector — a notoriously dirty, environmentally unfriendly business — is also plagued with technical complexity, a skills shortage in the West and a monopolistic market that hands pricing power to Chinese state-owned incumbents.


Peak Resources: CEO calls it a day

Peak Resources advises that its CEO, Rocky Smith, will cease employment with the company at the end of October 2020.

Rocky joined Peak in early 2016 as its COO Development and then CEO from November 2017.

Pensana Rare Earths Gets More Angolan Investment

Pensana Rare Earths PLC - operator of rare earths project in Angola - Says Angolan Sovereign Wealth Fund makes further investment in company of USD8.6 million. Fund increases its Pensana stake to 23% from just shy of 18%.

Vital Metals (ASX:VML) subsidiary signs rare earth plant agreement

Mineral explorer Vital Metals (VML) has begun negotiations to open a rare earth extraction plant in Saskatoon, Canada.

The deal comes after SRC and the Government of Saskatchewan signed an agreement last month to spend $31 million building Canada’s first rare earth processing and separating facility.

Vital wants to build its proposed rare earth extraction plant alongside SRC's facility, as their technologies are complementary to each other.

Specifically, Vital's plant would produce a mixed rare earth carbonate product. While, SRC's facility would use that same product for separation — meaning Vital would be a likely customer.

Comment: 500 t/y is the design capacity at SRC. Small is beautiful in RE.

Scandium Int’l files patent for scandium lithium-ion batteries

The patent application covers a number of scandium enhancements, including doping potential for both anodes and cathodes, and for solid electrolytes, the company said.

On Thursday, Scandium said it is applying for patents at a time when considerable effort is being expended in developing next-generation materials for lithium ion batteries that will make batteries safer, lighter, more durable, faster to charge, more powerful, and more cost-effective.

Texas Mineral Resources Consortium Awarded U.S. Department of Energy (DOE) Grant Targeting the Production of Mixed Rare Earth Oxides from Pennsylvania Coal-Based Resources

TMRC’s project partners include Penn State, Jeddo Coal Company, and H22OS. The consortium’s objective is to ultimately install a self-contained, modular, and portable pilot plant at a Jeddo Coal Company site in Pennsylvania capable of producing 1-3 metric tons of rare earth oxides derived from coal byproducts from Pennsylvania anthracite coal. The project will commence October 1, 2020, with a three-month conceptual design phase and an ultimate objective of completing a design package (feasibility study) to prove the technical and economic feasibility for a facility capable of 1-3 metric tons/day production of mixed rare earth oxides

Comment: Again, small is beautiful.

Hastings Technology Metals Ltd Annual Report to Shareholders

Over the course of the last 12 months, Hastings Technology Metals Ltd (ASX:HAS) (HAM:5AM) has substantially progressed the Yangibana Project to the position where it is now considered to be the next most likely light rare earth project to be constructed anywhere in the world.

Comment: Hastings’ announcements become ever more eccentric. We stand by our analysis.

Namibia Critical Metals – JOGMEC Injects an Additional CAD $1.1M to Expand and Accelerate Drill Program at the Lofdal Heavy Rare Earth Project

Namibia Critical Metals Inc. ("Namibia Critical Metals" or the "Company" or "NMI") (TSXV:NMI) is pleased to announce that Japan Oil, Gas and Metals National Corporation ("JOGMEC") will provide an additional $1,100,000 to expand and accelerate the current drilling program for the Lofdal Heavy Rare Earths Project ("Lofdal") in northern Namibia. This additional commitment will increase the Term 1 joint venture expenditure from $3,000,000 to $4,100,000 by March 31, 2021. All references to dollar amounts are in Canadian dollars. This increase in funding allows for an additional 6,000 m of diamond drilling to develop resources at Lofdal as described below.A second rig has been deployed to site in order to maintain Term 1 program scheduling.

Comment: See what the NI43-101 has to say about Lofdal:


Source: Namibia Rare Earths Inc. PEA NI-43-101 Technical Report dated October 1, 2014

Cut-off at 0.1%…. only 9,000 tons of REO. Seemingly, Japan Inc. strongly believe there is much more to find there.

Chinalco Guangxi Rare Earth is warned by the Ministry of Ecology and Environment that serious pollution rectification has not happened

On September 23, the Ministry of Ecology and Environment issued a notice stating that Chinalco Guangxi's rare earth rectification was not in place, and environmental pollution problems were prominent. From September 6th to 15th, 2020, the Central Fourth Ecological Environmental Protection Supervisory Group conducted on-site inspections at Chalco Group Guangxi Nonferrous Rare Earth Development Co., Ltd. (hereinafter referred to as "Guangxi Rare Earth") and its subordinate enterprises. The inspectors found that the company's subsidiaries did not rectify the central ecological and environmental protection supervision problems in place; the environmental management was chaotic, and illegal activities were frequent; excessive mining of rare earths beyond the limits polluted the surrounding environment. 

  Guangxi Rare Earth was established in July 2011. It is now a third-level enterprise of Aluminum Corporation of China, with a registered capital of 750 million yuan. It integrates rare earth resource exploration and mining, smelting and separation, deep processing, scientific research, and trade. It is a subsidiary of Chinalco Guangxi Nonferrous Rare Earth Company, Guangxi Guosheng Rare Earth New Materials Company, Jiangsu Guosheng Rare Earth New Materials Company and other 3 smelting and separation enterprises, as well as Chinalco Guangxi Cenxi Rare Earth Company, Chinalco Guangxi Hezhou Rare Earth Company, Chinalco Guangxi Wuzhou Rare Earth Company, Chinalco Guangxi Nonferrous Chongzuo Rare Earth The company, Chinalco Guangxi Yulin Rare Earth Company and other 5 mining enterprises. The inspector found that the Guangxi Rare Earth Central Ecological and Environmental Protection Inspectorate did not perform the rectification work, the illegal problems were prominent, the environmental management was chaotic, and there were greater environmental risks. 

  (1) Seriously pollute the surrounding environment 

  The first round of central ecological and environmental protection inspectors "looked back" pointed out that Chinalco's Guangxi Cenxi Rare Earth Company project has imperfect anti-seepage facilities and pollutes the surrounding environment. However, this time the inspector found that the company did not learn a lesson. Once the problematic mine was demolished, the follow-up pollution prevention measures were not in place, and the surrounding water environment pollution problems were still outstanding. Guangxi Cenxi Rare Earth Company's inspection and acceptance opinion "further strengthen the operation management and maintenance of wastewater treatment, and ensure the normal operation of environmental protection facilities" requirements were not implemented. In January 2020, the company dismantled tailing water treatment facilities without authorization, and buried 10 environmental monitoring wells and sealed them. Sampling and monitoring showed that the water quality of the two surface water bodies downstream of the company's closed mine was inferior to Class V, and the maximum ammonia nitrogen exceeded the standard by 92.8 times. 

  Chinalco Guangxi Hezhou Rare Earth Company's Hezhou-Guizhou-Guangzhou High-speed Railway Laminated Rare Earth Resource Rescue Recycling Project has been reported many times by the public due to water environmental pollution problems. The inspection found that the relevant problems have not been resolved. Although the project has constructed an ammonia nitrogen wastewater treatment project, the on-site inspector found that the dosing device of the ammonia nitrogen wastewater treatment project could not operate normally, the pretreatment fast infiltration pool was illegally set up with drainage pipelines, and the pretreatment washing wastewater were directly discharged to the external environment without authorization. Sampling and monitoring showed that the water bodies downstream of the hydrometallurgical workshop and downstream of the mining area of ​​the project are all inferior Class V, which are obviously acidic, with pH values ​​of 3.77 and 3.59 respectively, and ammonia nitrogen exceeding the standard by 11.6 times and 9.6 times. 

  Chinalco Guangxi Wuzhou Rare Earth Company's Hongling Commercial Logistics Park, after the closure of the salvage recovery project of overlying rare earth resources, the related sewage treatment facilities were simultaneously removed, and the underground monitoring wells were sealed and filled, and the water quality was not monitored until the water quality was stable and up to standard according to the requirements of the environmental assessment. Sampling and monitoring showed that the downstream water body of the original water metallurgical workshop of the project was inferior to Category V, and the ammonia nitrogen exceeded the standard by 10 times. 

  Figure 1 Hezhou-Guizhou-Guangzhou High-speed Railway Laminated Rare Earth Resources Salvage Recovery Project Ammonia Nitrogen Treatment Facility Pretreatment Pool Exceeds the Drainage Pipe 

Figure 1 Hezhou-Guizhou-Guangzhou High-speed Railway Laminated Rare Earth Resources Salvage Recovery Project Ammonia Nitrogen Treatment Facility Pretreatment Pool exceeds the drainage pipe

  (2) Prominent environmental violations of construction projects 

  The inspector found that many projects of Guangxi Rare Earth's subsidiaries were constructed without EIA approval, and some mining projects exceeded the approval limit and produced excessive production, which increased environmental pressure; the water injection test was not carried out in accordance with the EIA requirements, and there were greater environmental risks; some The project even violated the requirements of the environmental assessment by building outdated production facilities that are explicitly prohibited by the state. 

  Chinalco Guangxi Wuzhou Rare Earth Co., Ltd. Hongling Commercial Logistics Park, the salvage recovery project of overlying rare earth resources started construction in 2015 and was put into production. It was not until 2016 that the environmental assessment record was obtained. Chinalco Guangxi Hezhou Rare Earth Company's Yonghe Expressway and Guiguang High Speed ​​Railway started the construction of the rare earth ore recovery project in 2013 and put into production in 2014. It was not until 2017 that the project environmental assessment record was completed. Chinalco Guangxi Nonferrous Jinyuan Rare Earth Co., Ltd. built a new extraction production line in 2015 without environmental review approval. 

  Chinalco Guangxi Wuzhou Rare Earth Co., Ltd. Hongling Commercial Logistics Park has the problem of mining beyond the scope of approval for the salvage recovery project of overlying rare earth resources. Chinalco Guangxi Nonferrous Metals Chongzuo Rare Earth Company Chongzuo Liutang Mine failed to carry out water injection experiments as required during the mining process. When the water injection recovery rate data did not meet the requirements of the environmental assessment, it began to inject the leachate for production, which poses a greater environmental risk. Chinalco Guangxi Yulin Rare Earth Co., Ltd. Guangxi Lipu-Yulin Expressway Xingye Section of Lipu-Yulin Expressway Laminated Rare Earth Resources Rescue Recycling Project violated the requirements of the environmental impact assessment and built a single-stage gas generator with outdated production capacity clearly included in the state to be eliminated. The inspector also found that the rare earth separation smelter of Guangxi Hezhou Jinyuan Rare Earth Company did not seal the acid dissolution and extraction workshops in accordance with the requirements of the environmental assessment. 

  (3) Outstanding environmental risks 

 Figure 2 The current status of the mining area of ​​the Hongling Commercial Logistics Park Overlap Rare Earth Resources Rescue Recovery Project 

 Figure 2 The current status of the mining area of ​​the Hongling Commercial Logistics Park Overlap Rare Earth Resources Rescue Recovery Project 

  Guangxi's rare earth environmental management is not in place, most of the mine environmental protection emergency pools are not sound, mine anti-seepage measures are generally lacking, a large amount of sewage seeps into the ground, and environmental risks are prominent. 

  The surface water interception pool of Tengxian Rare Earth Mine of Chinalco Guangxi Wuzhou Rare Earth Company is only equipped with an impermeable membrane around the pool body, and there is no anti-seepage measure at the bottom of the pool body; the mining area also set up the earth pit without any anti-seepage measures as an environmental emergency pool . Sampling and monitoring showed that the pH value of the surface water interception pool was 4.6, which was obviously acidic. The ammonia nitrogen concentration was 78.7 mg/L, which exceeded the emission standard of rare earth industrial pollutants by 4.2 times and exceeded the surface water category III standard by 77.7 times; the ammonia nitrogen concentration of the environmental emergency pool exceeded Surface water is 13.5 times the Class III standard. At the same time, lead concentrations in groundwater monitoring wells and groundwater intercepting wells were 0.0228mg/L and 0.103mg/L, respectively, which exceeded the groundwater level III standard by 1.3 times and 9.3 times respectively. 

 Figure 3 Wuzhou Rare Earth Mining Co., Ltd. Tengxian Rare Earth Mine Environmental Protection Emergency Pool 

 Figure 3 Wuzhou Rare Earth Mining Co., Ltd. Tengxian Rare Earth Mine Environmental Protection Emergency Pool 

  Chinalco Guangxi Yulin Rare Earth Company Guangxi Lipu-Yulin Expressway Xingye Section of Overlapping Rare Earth Resources Rescue Recycling Project Workshops Some did not build environmental protection emergency pools as required by the EIA, and some emergency pools contained water. The rainwater collection tanks and rainwater diversion channels of the second and third workshops of the hydrometallurgical plant were damaged in many places. Sampling and monitoring showed that the concentration of ammonia nitrogen in the rainwater collection tanks of the second and third workshops exceeded the standard by 2.9 times and 24.7 times. 

  The inspector also found that the pollution control facilities of some of Guangxi Rare Earth's subsidiaries were not operating normally. Guangxi Hezhou Jinyuan Rare Earth Company's sewage treatment online monitoring facility is not operating normally. From 2018 to June 2020 alone, there were 259 days of abnormal data, with as many as 1,115 abnormal data; Chongzuo Liutang mine ammonia nitrogen wastewater treatment system dosing device If it is damaged for a long time, the medicine cannot be added normally. 

  The main responsibility of Guangxi's rare earth environmental protection is not in place. During the production and operation of the company, the company failed to pay attention to environmental issues ideologically, and its awareness of environmental laws was weak. The method of rectification and reform of the central ecological and environmental protection supervision issues was simple, and it was even dismantled. This was a waste of funds and did not solve the environmental pollution problem of the mine. . The supervision and management of China Rare Rare Earth Co., Ltd. are not in place. As the immediate superior of Guangxi Rare Earth, it has not paid enough attention to the ecological and environmental problems that have existed in Guangxi Rare Earth for a long time, and the supervision is not strict. The inspection team will further verify the relevant situation and urge China Aluminum Group Co., Ltd. to conduct investigations and rectifications in accordance with laws and regulations. 

  According to an inquiry from a reporter from China Economic Net, Chinalco Guangxi Nonferrous Rare Earth Development Co., Ltd. was jointly initiated and established by Aluminum Corporation of China, Research Rare Earth New Materials Co., Ltd. and Guangxi Nonferrous Group on the basis of Guangxi Nonferrous Metal Group Rare Earth Development Co., Ltd. A wholly state-owned enterprise integrating rare earth mineral resource exploration, smelting and separation, deep processing, and rare earth scientific research and trade. China Rare Earth Co., Ltd. holds 60% and Guangxi Huaxi Group Co., Ltd. holds 40%. Aluminum Corporation of China Group Co., Ltd. directly holds 52.96% of the shares of China Xiyou Rare Earth Co., Ltd., and controls China Rare Rare Earth through its subsidiary China Aluminum Co., Ltd. (Alcoa 601600.SH, HK.02600, ACH) 14.62% shares of the company limited by shares. 

Comment: Talaxis have an agreement with the accused Chinalco Guangxi for supplying to China, whatever Mkango may finally produce one day.