NdPr falls below $50/kg; India auctions RE license; ARR comment; China adds to visitor hazard; EV espionage? Brazil Gold Rush; CRE warm-up stale story; More foghorning from the usual suspects.
Rare Earth 4 March 2024 #141
Poor camouflage
There is a bit of squabbling about the new Russia sanctions, which also target these supposedly Chinese companies:
Already on only most superficial examination, however, it appears that these companies are not really Chinese, they are more likely Russian.
Lousy job
For example “Dennex Enterprises Limited” (BRN 53796830) were established in Hong Kong on 23 December 2010. The current sole company director, a Taiwanese, was appointed on 23 May 2018.
The very first thing one notices is that the company has no Chinese name, which is odd.
The domain name dennexhk.com was registered at “REG.RU”, the Russian “Registrar of Domain Names”, two weeks before the invasion of Ukraine. The listed administrative contact is in Moscow.
Dennex also inadvertently used the Russian language version of Google Maps for their “contact” page, apart from listing a phone number with the IDD code of Taiwan (+886 - see company director above), not the one of Hong Kong (+852) and mistyping their very own address:
Dennex actually had acquired the domain dennex.hk from the official Hong Kong Domain Name Registration Co., Ltd. and could have hosted their website on the related Huawei Cloud network. This could have made the Moscow connection a little less obvious.
This sloppiness carries through, take “Most Development Limited” for another example. The domain name “most-development.com” was registered with JSC Regional Network Information Center, Russia.
Both companies, Dennex and Most Development, host their websites on Russian servers. Which Chinese company would do that?
Disappointment
Russia is the country that was home to the KGB, the feared Committee for State Security. KGB agents were masters of covert operations all over the world.
On this background this job here looks incredibly flimsy and amateurish - not to say stupid - piece of work for companies circumventing international sanctions. But why do these “companies” have websites at all? For banks’ compliance departments?
Dilemma
There are more Chinese companies on the sanction list, but these are genuinely Chinese companies, no rare earth company among them:
GUANGZHOU AUSAY TECHNOLOGY CO., LTD (广州欧赛科技有限公司)
GUANGZHOU HESEN IMPORT & EXPORT CO., LTD (广州合森进出口有限公司)
JIANGXI LIANSHENG TECHNOLOGY CO., LTD (江西连胜科技有限公司)
NEW IDEA GUANGZHOU TECHNOLOGY CO. LTD. (新设想广州科技有限公司)
SHENZHEN BIGUANG TRADING CO., LTD (深圳比广贸易有限公司)
YILUFA ELECTRONICS LTD (深圳市亿路发科技有限公司)
The problem for China will be to respond, without speaking on behalf of obviously Russian shell companies.
A comment from American Rare Earths
Regarding our recent post ARR comment:
I’m disappointed in the commentary today around ARR and would encourage you to take a look at the full technical report we published around the resource upgrade at Halleck Creek on the tab below. A few things that warrant your attention from the story that are inaccurate:
As part of the DoD (Darpa) / Lawerence Livermore R&D work, we’ve successfully preconcentrated the ore at a 12:1 upgrade ratio using gravity separation (like coal or lithium), while disgarding 93% of the waste.
With a zero strip ratio, that provides very favorable economics on what is hitting the leaching circuit. With a mine plan at 4000 ppm, the ore is being upgraded to 4.8% TREO with a very favorable basket of NdPr/Tb/Dy of 27%.
The full leach tests are in the technical report, proving out 90degreeC atmospheric leach / opposed to Lynas 1000degreeC cracking, no need for cracking circuitry.
Its not a conventional hardrock deposit and I believe as you look at the technical work, you’ll agree and begin to understand why it’s been the top performing rare earth stock in the space since the time of this management teams arrival.
I should point out that it’s the location of Halleck Creek on state (WY) land that provides for permitting certainty that provides the glimmer of hope for a new North American project.
We wrapped up a capital raise from institutional investors with technical diligence team(s) this past week, which does not align with the punter commentary.
I’ve copied our lead technical manager and Kayla who you’ve communicated with previously should you like to request additional information.
A detailed scoping study with full project economics is coming in late Q1’24
If you’ll be in Toronto for PDAC, I’d love to have a coffee and further educate myself on the industry.
Given in past blogs you’ve shown a commitment to getting things right and correcting errors, trust this will be the same.
Regards – DSS. Links below
https://americanrareearths.com.au/projects/halleck-creek-wy/
Our position:
Some junior miners completely lose sight of basic commercial aspects of their respective projects.
We stand by our post.
The old and worn MP Materials spin still circulates
DOE working on mining rare earth minerals
Bromhal said right now, the rare earth minerals mined in the US are sent to China for further processing. But he said a new processing facility is being built in Texas, partially funded by DOD — and he called that a positive step.
This guy apparently is just completely clueless.
MP’s Litinsky’s spin of “sending ore for processing to China” implies that MP would get finished rare earth back from China.
This practise of export processing of rare earth has been illegal in China for a quarter of a century. Of course Litinsky has no way of knowing this.
Strictly speaking the spin is not a lie per se, of course MP’s bastnasite is processed by MP’s sole and single customer, but it does not come back as rare earths to USA or to MP, but ends up in Made-in-China permanent magnets and electric motors. Nothing to do with MP.
MP have not been successful with their boastful presentations lately, as investors seem numbed and less receptive to MP’s hype. MP continue writing red ink and the rare earth metal and the boastful announced magnet production concept in Texas also seems to show some serious cracks. MP’s share price is down almost 54% year on year:
//Politics
Another red nail in the coffin of international cooperation
PRC Law on the Guarding of State Secrets
Article 8: Organs and units shall implement a responsibility system for secrecy work, set up a secrecy work body or appoint dedicated personnel in accordance with law to be responsible for secrecy work, complete systems for secrecy management, improve secrecy protection measures, carry out publicity and education on secrecy, and strengthen secrecy oversight inspections.
Article 9: The state is to employ diverse forms to strengthen publicity and education on secrecy, include secrecy education in the national citizen education system and civil servant education and training system, encourage mass media to conduct public-facing publicity and education on secrecy, spread knowledge about secrecy, and publicize secrecy law, to enhance the entire society's awareness of secrecy.
Article 10: The state encourages and supports the research and application of science and technology for secrecy, increasing capacity for independent innovation, and protecting intellectual property rights in the field of secrecy protections in accordance with the law.
While among the reasons certainly is previously almost impudent activity by the likes of the CIA in China, the paranoid reaction of China is a total overkill.
Xi Jinping’s China has become a hazardous place for business visits, particularly for senior executives and R&D people. China’s KGB-copy is zealously searching for “foreign spies,” “hostile foreign forces,” “traitors”, “splitists of the motherland” and, of course most importantly, dissidents of the regime.
Xi’s administration has earnestly tried to put the work of the MSS on a more solid legal footing and establishing clear procedural rules.
However, old habits die hard.
On its official WeChat channel the “KGB with Chinese characteristics” encourages snitching on foreigners. This opens the doors for massive abuse, say, in case of sino-foreign business disputes. Or simply in case of a private relationship fallout. The Chinese party simply accuses the visiting foreign counterparty of espionage. What inevitably follows will always be disruptive and traumatising for the victim.
If you travel to China and you inadvertently receive too much information, you may also be done for.
Apart from that China has a history of using agent provocateurs as well as ladies of the night for creating embarrassing footage of individuals, for example foreign diplomats in Beijing who make acquaintances at Maggie’s Bar, now called UMU.
Kutessay II revival?
Kyrgyzstan Seeks Uranium Mining Restart, Russian-Built Nuclear Plant
Curiously, Japarov also noted that Kyrgyzstan intends to send 50 people to Russia for training every year, enabling them to “become specialists in the development of rare earth metals and uranium,” without offering further details.
Do-it-yourself for Kutessay II? It is a historical rare earth mine with the largest processing facility of USSR times attached. Mired in legal controversy this is currently uninvestable for foreign investors.
Corruption in Kazakhstan’s mining sector affects Russia’s interests
Aurora Minerals Group, which advertises itself as a “full-chain exploration service provider in Kazakhstan and Central Asia” and was founded by so-called veterans of Kazakhstan’s minerals industry, Kaisar Kozhamuratov and Said Sultanov, is the latest to be embroiled in scandal after being implicated in funnelling investors’ money straight into the founders’ pockets. These stories of embezzlement and fraud have become the defining features of Kazakhstan’s mining sector.
The Central Asian country has been attempting to get rid of its image of having one of the world’s most corrupt and inefficient mining sectors in the world according to private financial institutes like Allianz, who gave the country a C4 rating (risky for enterprise) and the World Bank and the Organisation for Economic Cooperation and Development (OECD). This has been a struggle to achieve, though.
Adding to the multiple legal disputes and cases of harassment filed by foreign investors, there is an unstable geopolitical situation, especially in the border regions with Tajikistan, Kyrgyzstan, and Uzbekistan, which will directly impact Russia. It is within the realm of possibility that the West can conjure an unstable situation on the Kazakh-Russian border.
Despite being an independent country since 1991 and full of rare metals and minerals, the country has not been able to reform its non-fuel mining sector.
One of the EU’s strategic partners….
Government grants 6 crore for 5 Indian Startups, Read Why?
Based in Pune, Ashvini Rare Earth Pvt Ltd has got approved INR1.5 crore (~US$181,000) for the foundation of a pilot plant for extraction of Neodymium-Praseodymium metal from Neodymium-Praseodymium Oxide over calciothermic reduction route for NdFeB Base Permanent Magnet Application.
Caliche Pvt Ltd based in Shillong has got approved INR1.2 crore (US$145,000) for the software development called GARBH for the survey on Rare earth metals.
While the U.S. and the EU try to outdo each other in throwing copious amounts of of taxpayer money at even the most hopeless of rare earth projects, these Indian amounts seem to be on the very low side.
India Launches Second Tranche of Auction for Critical and Strategic Mineral Blocks
The Ministry of Mines has issued the second tranche of the auction for the grant of concessions for 18 critical and strategic mineral blocks across seven states, with 17 designated for the grant of composite license and one for the mining lease.
The Union Minister of Parliamentary Affairs, Coal and Mines, Pralhad Joshi, during the announcement, highlighted the diverse array of minerals up for auction in the second tranche, including Tungsten, Vanadium, Graphite, Rare Earth elements, Glauconite, Phosphorite, Nickel, Platinum group of minerals, Cobalt, and Potash.
The auction process has begun, with the sale of tender documents starting on the same day as the launch. The last date for purchasing the tender document is April 18, 2024. Bidders have to submit ₹300,000 (~$3,620) as cost of the document fee.
The last date for the submission of bids is April 23, 2024.
Interested parties can access detailed information about the mine locations, auction terms, and timelines on the MSTC auction platform.
//Electric vehicles
US Probes Security Risks in Chinese Cars, Mulls Curbs
The US will investigate potential data and cybersecurity risks posed by Chinese electric vehicles and other internet-connected cars, the Commerce Department said Thursday, intending to act before their manufacturers expand into American markets.
The US isn’t yet calling for a ban of Chinese EVs but could impose some limitations on imports of the vehicles or parts, an administration official told reporters on condition of anonymity.
Chinese auto companies have a very limited presence in the US because of a 27.5% tariff introduced under former President Donald Trump. The Biden administration is considering hiking those duties even higher, but officials are worried that tariffs alone won’t be enough to keep Chinese cars out of the country, Bloomberg has reported, as firms route shipments through third countries and set up shop in places like Mexico.
As Biden said in the statement announcing the investigation:
“China imposes restrictions on American autos and other foreign autos operating in China. Why should connected vehicles from China be allowed to operate in our country without safeguards?”
Tesla is caught between a rock and a hard place. Perhaps Beijing already told Musk already: “You know what you have got to do.”
Commerce Focuses National Security Scrutiny on 'Connected Vehicle' Supply Chain
On March 1, 2024, the Department of Commerce (Commerce), Bureau of Industry and Security (BIS), through its Office of Information and Communication Technology and Services (ICTS), released an advanced notice of proposed rulemaking (ANPRM) seeking public comment to assist BIS with the potential development of a rule regarding ICTS that is integral to connected vehicles (CVs). More specifically, the purpose of the ANPRM is to gather information to enable BIS to assess how classes of transactions involving ICTS integral to CVs, when designed, developed, manufactured or supplied by persons owned by, controlled by or subject to the jurisdiction or direction of “foreign adversaries,” including China, could present undue or unacceptable risks to U.S. national security and whether such transactions should, therefore, be prohibited. The deadline for comments is 60 days following formal publication, i.e., April 30, 2024. There are no immediately effective provisions, and the process for finalizing any eventual regulation is likely to take until at least late 2024, if not longer.
Potential Prohibitions and Mitigation: The ANPRM seeks public comment — through a series of 35 questions — to guide BIS’s potential development of rules governing ICTS integral to CV, including rules that could prohibit classes of transactions.
CV means connected vehicles, essentially EV. The link to the original notice is here.
China regulates that Made-in-China Teslas can’t go near “sensitive” areas and government buildings, can’t park in garages near places where “important meetings” take place, etc.
We would argue that for espionage an electric vehicle may generally not necessarily be more suitable than a run-of-the-mill regular vehicle, unless you want to go back to 1970s cars.
For listening to a secret meeting, there are multiple time-tested methods, such as participants’ own mobile phones, the wifi or hard-wired internet, even listening through the room’s power lines and/or to the vibrations of the window panes is an option.
Military installations have long been analysed cm2 by cm2 using satellites and all kinds of sensors, no further input from spying Tesla’s may be required.
China can get no satisfaction
China bolsters defence of overseas EV sales against US, EU counterpunches
Minister of Commerce Wang Wentao earlier this week expressed “strong dissatisfaction” toward an ongoing European Union probe into China’s exports of EVs and related products as “an investigation that lacks factual evidence”.
The EU does not know if there is “factual evidence,” apart from the Chinese government publications on EV subsidies. That is the very reason, why the EU is looking into it.
The European Commission launched its anti-subsidy investigations into Chinese EVs last year, while the US bars its EV battery materials from China, which it deems a “foreign entity of concern”.
Chinese EV makers receive “generous government subsidies, which have helped to lower production costs”, Moody’s Analytics said earlier this month.
Western leaders see China’s giant EV industry, led by the likes of BYD and Nio, as a threat to their smaller firms.
It is quite simple: Just look for non-recurring income in the financial statements of the companies concerned. If even Moody’s can see it, the EU can see it, too.
China is exporting its entire EV industrial chain
The China EV narrative you’re probably most familiar with is the country's surging EV exports, which grew 64% last year.
Car exports are certainly part of the story. But the broader narrative goes far beyond unit sales. Car exports are a function of a larger strategic goal: exporting China’s EV industrial chain.
There are very resourceful people at work at a/symetric.
EV motor alloy from Japan’s Proterial trims power use by 5%
Japanese metal materials maker Proterial has developed a way to make a new alloy for electric vehicle motors that it says can reduce power consumption by up to 5%, allowing for smaller and faster motors.
The company, formerly known as Hitachi Metals, has succeeded in processing the alloy into material for EV motor cores.
The amorphous alloy reduces energy loss by 90% or more compared with the non-oriented electrical steel sheet typically used in motors.
Proterial aims to start mass production as soon as 2025.
We’ll see if this catches on. Handle with care, as Proterials are now an American company.
//Companies
Brazil Gold Rush
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