Mind HMS; India opens RE magnet facility; China rare earth fraud; Pensana in dire straits; RareX become a fertiliser company; 3 x Ionic RE; UBS brilliant analysts;
Rare Earth 7. June 2023 #122
Heavy mineral sands (HMS) as a rare earth resource
We have addressed the subject several times. The four largest in HMS:
These four are probably about half the traded market of HMS.
We quote:
Tronox:
We are also realizing increasing value from higher value co-products streams, including monazite, a mineral which contains many of the most sought after rare earth elements. While we have traditionally sold our monazite as a waste product in a relatively unconcentrated form, we are now looking at ways to upgrade the rare earth content of what we sell to extract more value from our mineral resources.
Iluka:
The rare earth bearing mineral monazite is a co-product of Iluka’s mineral sands. Since the 1990’s Iluka has strategically stockpiled the monazite produced at its Narngulu Mineral Separation Plant, at its operations at Eneabba, Western Australia. Iluka commissioned a concentrator plant at Eneabba to further process the stockpiled material. This will separate the monazite (and additional zircon), producing a ~90% monazite concentrate material that will provide a direct feed to Iluka’s rare earths refinery.
Rio Tinto:
At our QIT Madagascar Minerals operations, we’re creating extra value from around 25,000 tonnes a year of sand by extracting monazite – this is in addition to our core product of ilmenite, used in titanium dioxide production. Monazite is a rare earth mineral with many uses, such as heavy magnets for electric vehicles and wind turbines.
Kenmare:
Kenmare started supplying rare earths in 2019 through a concentrate product containing monazite. Rare earths, such as praseodymium and neodymium, are consumed in permanent magnets crucial to fast-growing markets such as electric vehicles and wind turbines.
HMS will play an ever bigger role as a raw material for monazite in China.
One of the ideas is certainly to gain control over monazite domestic prices, which are entirely dependent on import pricing. Extracting monazite from HMS at home should create a balance of terror with import pricing.
But at this time the question is not either monazite or HMS, as both are needed to cover rare earth demand.
More than half of the TREO of China’s import monazite comes from Rio Tinto’s JV in Madagascar.
//Events
2024 Future Facing Commodities Conference
Date: Tue, 26 Mar to Thu, 28 Mar 2024
Venue: Raffles City Convention Centre, Singapore
This year’s event had nearly 1,500 delegates, 97 exhibitors and over 10,000 online and streaming views.
2023 REIA Annual Conference and General Assembly
Date: 21-23 June 2023
Venue: Location: World Trade Centre Barcelona
Getting close to 200 registrations and counting.
//Politics
Namibia
Clarity on the statement by Hon Tom Alweendo, Minister of Mines and Energy delivered at the Parliamentary Oversight Workshop on maximising the potential of the mining & energy sectors in Namibia
In terms of Article 100 of the Namibian Constitution, “Land, water, and natural resources below and above the surface of the land and in the continental shelf and within the territorial waters and the exclusive economic zone of Namibia shall belong to the State if they are not otherwise lawfully owned.”
Despite this Constitutional provision, the Government has no intention to seize any stake from existing mineral or petroleum licence holders and remain committed to uphold the sanctity of contract. However, the reality remains that Namibians are and remain disadvantaged because they may not have the financial and other means to exercise their rights in relation to natural resources, as such the State as supreme owner of these natural resources may demand a certain minimum stake through public enterprises such as EPANGELO Mining or NAMCOR in any mineral or petroleum licences that may be issued in future.
The Ministry would however like to inform our stakeholders that the Namibian people have a legitimate expectation of having a share of ownership in the exploration and mining of our countries’ natural resources.
Cognizant of the fact that many Namibians might not have individual capacity or the requisite resources to realize these rights or expectations in their individual capacities, it would be just that the Government acquire these rights on their behalf.
Long story short: New resource related investments may need to give the government a shareholding in the relevant company.
Not an isolated case in Africa. Also not terribly controversial.
But the government will need excellent auditors.
Rare earth magnet plant inaugurated
Visakhapatnam: Prime Minister Narendra Modi dedicated the Rare Earth Permanent Magnet Plant in Visakhapatnam to the nation.
The facility for the production of rare earth permanent magnet has been developed on the campus of Bhabha Atomic Research Centre in Visakhapatnam.
Engineering Projects (India) Ltd. constructed the magnet plant valuing 165 crore. The integrated plant/facility for production of samarium-cobalt rare earth permanent magnet will use reduction diffusion technique developed by BARC. The plant will produce rare earth magnets like samarium-cobalt and neodymium-iron-boron. With this facility, India will join a select group of nations with capacity to produce rare earth permanent magnets.
Sobering facts
165 crore is 1,650,000,000 Indian rupees, ca. US$20 mio. The factory has a capacity of 3,000 kgs per year. Kilograms, not metric tons, shared between SmCo and NdFeB.
It is located at the Bhabha Atomic Research Center (BARC).
Video conference
Actually, PM Modi joined the opening online, not in person.
Why he would attend at all: Without own rare earth permanent magnets India can never really be an alternative to China.
Family affairs
All strings are getting pulled in India, including encouraging principal industrial families in the technology and metal sectors to do something about permanent magnets.
But even though highly motivated, rich, full of patriotism and national pride, all of them run into the exact same real-world problems.
Untouched by rare earth they tend to engage in wishful thinking.
Enter IREL.
State-owned rare earths
IREL were established as state-owned India Rare Earth Ltd. in 1949, primarily to engage in the development of thorium resources, same as the US and USSR did at the time for nuclear energy and weaponry.
IREL monopolise mining & processing of all mineral sand and rare earth resources above ZERO radioactive content.
However, the list of grievances is long, because of overregulation and a notoriously inefficient and painfully slow bureaucracy paired with an archaic way of doing business on the one hand and classic SOE incidents of environmental negligence on the other.
IREL do their business in heavy minerals sands and were not properly incentivised to really achieve in terms of rare earth.
IREL themselves are victim of bureaucratic inertia. For example, it took 21 years to finally get a license for heavy mineral sands mining in Tamil Nadu state.
International sourcing
Since even exploration is heavily restricted in India, it tries to look for solutions abroad.
India established Khanij Bidesh India Ltd (KABIL) in 2019, a state entity that is supposed to take care of international sourcing and investing for India’s technology metals needs and wants.
KABIL’s management can only be about as good as the bureaucracy of 3 state-owned enterprises it recruits its people from:
Aluminium Company (NALCO),
Hindustan Copper Ltd. (HCL), and
Mineral Exploration Company Ltd. (MECL).
These hardened bureaucrats and administrators lack a fundamental understanding that they will absolutely have to interface with foreign private mining companies in order to bring tangible results, simply because not every economy is as state-run as India’s.
Instead KABIL so far prefer not to leave their comfort zone and keep looking for foreign governments of similar wavelength as India’s to interface with or sign useless MOUs with governments who just try to be kind to India, but can’t really help.
No earth-shaking breakthroughs are to be expected from the currently ineffective approach of KABIL.
Our take
The whole sector in India is basically screaming for reform.
The concern, however, is, that even only a partial, sector-limited breakup of India’s semi-socialist economic setup may leave too many people behind.
Lacking willingness and political ability to reform the metal & mining sector as well as related state-owned businesses, hinders any potential breakthroughs.
UPDATE 2-British consortium to invest $9 bln in Indonesia mining, EV batteries, minister says
Indonesia, which has the world's biggest nickel reserves, is keen to develop downstream industries with the ultimate aim of producing batteries and vehicles for the world's biggest electric car manufacturers.
Investment Minister Bahlil Lahadalia did not provide a breakdown of the $9 billion but said it would go into an industrial park in the Bantaeng region on Sulawesi island powered by wind energy, with a completion target of September.
The ministry confirmed the British consortium included firms such as Glencore, Indonesian state miner Aneka Tambang, materials company Umicore and energy company Envision Group.
Where this is:
From the Indonesian government website:
Finalization of Masterplan and Startegic Plan (Renstra) for Industrial Zone in an area of 3000 ha.
Ministry of Industry has formulated Detailed Spatial Planning (RDTR) in the vicinity of industrial zone。PT Hwadi (China-Malaysia) and PT Bantaeng Sigma Energi are starting Construction of 2X300 MW Coal-Fired Power Plant.
PT Titan and PT Hwadi have built 2 smelter plants
Ministry of Industry has trained 200 Human Resources for local industry
Has perhaps Blackadder’s Baldrick fathered this cunning plan?
Brilliant - technology metals for renewable energy, produced with power from burning coal.
Somewhat unsurprising that none of the companies wanted to comment for the article.
Bantaeng district has already a pollution problem from smelting。
South Korea and B.C. establish partnership on critical minerals
B.C. signed a statement of co-operation with the Korea Mine Rehabilitation and Mineral Resources Corporation which covers all the stages of critical minerals from exploration and mining to manufacturing and recycling, reads a news release.
KOMIR is owned by the State of South Korea.
Priorities of the agreement include securing a supply chain through trade and investment, strengthening technical capacity through development projects and joint research, and promoting sustainable and safe practices.
The co-operation statement comes as part of Premier David Eby’s ongoing trade mission to Asia.
NEDO Promotes Development of Heavy Rare Earth Separation and Refinement Technology from Used Parts and Materials
On June 1st, the New Energy and Industrial Technology Development Organization (NEDO) announced that in the "development of rare earth separation and purification technology from component materials" (hereinafter referred to as "new business"), heavy rare earth will be extracted from unused resources and used component materials.
A major issue with heavy rare earths is the high risk of resource supply, particularly in the separation and refinement process, where waste neodymium magnets are exported overseas due to costs and other factors, and the recycled products processed there are imported again. Therefore, it is necessary to secure heavy rare earth resources and promote resource recycling in Japan by developing domestic technology that can be commercialized in Japan for the separation and refinement process.
We have developed a manufacturing technology that selectively recovers heavy rare earths from unused resources such as neodymium magnet waste contained in discarded EVs and cutting waste from the manufacture of neodymium magnets with high efficiency and low environmental impact.
The period of the new business is scheduled from 2023 to 2027, and the total scale of the business is expected to be 1.76 billion yen over 5 years. The specific research and development items are "development of heavy rare earth recovery technology from unused resources" and "development of high-precision mutual separation technology and refining technology for Dy/Tb".
Interesting, because different from practically all other regions outside China, Japan actually has a rare earth permanent magnet industry. But why start only now?
Radioactive Waste From Old Queens Chemical Plant To Be Cleaned By City
Radioactive waste from a former chemical plant nestled between Brooklyn and Queens will be cleaned up by the city as part of a $1.6 million settlement, officials said.
The deal unveiled Monday requires the city to not only remediate radioactive pollution at the Wolff-Alport Chemical Company Superfund Site, but also pay the Environmental Protection Agency for its previously done work, said Breon Peace, U.S. Attorney.
The Wolff-Alport chemical plant was open in Ridgewood, near the neighborhood's border with Bushwick, from the 1920s until 1954.
The plant imported and processed monazite sand — which contains up to 8 percent thorium, a radioactive substance — to extract rare earth metals, officials said.
"Until 1947, the Wolff-Alport Chemical Company dumped the thorium waste in the sewer and possibly buried the waste on the property," the EPA's website on the location states.
76 years ago. Impressive.
Westpac’s institutional bank looks to back rare minerals, batteries
Anthony Miller, the chief executive of Westpac’s institutional bank, said he wanted to expand funding to rare earth mineral developments, along with projects that support the energy grid as it transitions away from fossil fuel.
Mr Miller’s comments are at odds with the outlook of some in the rare earths and critical mineral industry, however.
Arafura Rare Earths managing director Gavin Lockyer told The Australian Financial Review last month that local lenders were sceptical about financing local projects because it was “outside their comfort zone”. Arafura would look offshore to secure the funding it needed for a $1.6 billion rare earth mine in the Northern Territory known as the Nolan project, he said.
But an intense mortgage pricing war is crimping bank margins and spilling into deposits, leading the country’s largest lenders to increasingly view their institutional banking divisions as a key driver of growth.
Disproportionate investment
A$1.6 bio (~US$1.05 bio) is a lot of money for a single project, in order to participate in a market that was worth <US$9 bio globally in 2022, of which ca. 90% happen consistently in China.
How have we come here?
Rare earth ended up on critical minerals/metals lists on the base of “we don’t have them”, not questioning “do we really need them” and, if not, “why not”.
It is primarily the fault of governments who failed to see that their primary dependence is in rare earth permanent magnets. They not only failed recognising that, they also failed in in attending to that one dependency first.
What is the rare earth dependence?
As a matter of fact the bulk of RE imports to the US and EU are dirt-cheap by-products lanthanum and cerium, used in industries that will largely fade away, sooner or later. The rest is really small.
Fail
The US and EU failed in creating a market or at least a market potential for the value-carrying rare earths that are >90% of the total rare earth market value.
How can bankers extend loans for production of products that don’t have a tangible market in the West?
Related
On the emerging copper shortfall, mainstream media notices
We live in a world in which the main equation in economics for calculating production has only two factors, capital and labor—leaving out the obvious: physical resources. In the Cobb-Douglas production function, physical resources are assumed to be readily available in the quantities we require at the time we need them and at prices we can afford.
In a nutshell.
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