OZ blocks China NTU investment 2nd time; Tesla melts down RE market; Lynas tofu-deal; OZ undermining its own RE project; RE no-starters in US, OZ and China; GMA get additional funding;
Rare Earths 13. March 2023 #114
A lot is happening. A number of newcomers try to jockey on rare earths, including one from China - if it is not fake. Enjoy!
//Politics
Australia blocks Chinese investment in rare earth firm citing national interest -executive
Northern Minerals Ltd on Tuesday said Australia’s government has blocked the heavy rare earths producer’s largest shareholder, China’s Yuxiao Fund, from increasing its investment on grounds of national interest.
Yuxiao Fund sought Foreign Investment Review Board approval in August to raise its ownership to 19.9% from 9.92%. A government register showed Treasurer Jim Chalmers signed a prevention order on Feb. 15.
China has criticized Australia for previously blocking Chinese investment on national security grounds, saying this contributed to a years-long diplomatic freeze.
Not the first time
This is the second time a major Chinese participation in Northern Minerals was blocked by the Australian government.
In August 2019 Baogang, an Australian subsidiary of Baotou Steel, the mining company of the Bayan Obo rare earth mine, supplier and major shareholder of China Northern Rare Earth (Hitech) Group, offered to participate in Northern Minerals to the tune of AU$ 20 mio. In April 2020 the transaction was stopped by the Australian government.
No reciprocity
China’s audacity to criticise Australia for blocking China investment in rare earth is breathtaking, considering China’s complete lack of reciprocity.
China bans foreign direct investment in rare earths and rare earth processing as per its so-called “Negative List”, published by the National Development and Reform Commission (NDRC - used to be called State Planning Commission):
China has absolutely nothing to complain about.
Related
These “Australian” junior miners will knee-cap Australia’s A$1.2 billion project with Iluka
Astron Corporation Ltd (majority Chinese-owned via Hong Kong)
WIM Resources (Shenghe invested in WIM Resources)
VHM Resources (60% of output off-take by Shenghe Resources, approved by the OZ government)
Diatreme Resources Ltd (Off-take MOU for life of mine with Hunan Rare Earth Industry Group, MCC/Minmetals)
All of the above will deliver monazite or high monazite content HMS to China.
They will deliver raw material to China for turning out products, that *will* undercut Iluka (an Australian government rare earth exposure to the tune of A$1.2 billion) and Lynas.
Australia should consider to actively discourage such business.
Why? Because the rare earth shortage is easing through increased availability of raw material from Australia combined with available processing capacity in China plus a flattening projected rare earths consumption growth curve.
And that is all China needs to wipe out RE related developments in the west.
Ignore at your peril.
China's new coal plant approvals surge in 2022, highest since 2015, new research shows
Last year, China approved the construction of another 106 gigawatts of coal-fired power capacity, the equivalent of two large coal power plants per week and its highest in seven years, new research has shown.
The report — compiled by energy data organisations the Centre for Research on Energy and Clean Air (CREA) and the Global Energy Monitor (GEM) — said the coal power capacity starting construction in China was six times as large as that in all of the rest of the world combined.
Over the year, 50GW of coal power capacity went into construction across the country, up by more than half compared to the previous year, the report said.
Many of these projects had their permits fast-tracked and moved to construction in a matter of months.
The benefits of pushing carbon-neutral beyond 2060!
Faburama: For the coming 36 years China retains the right to continue being the largest polluter on the planet.
What a farce….
"More important than oil": The EU wants to increase the production of rare minerals (in German)
The draft is due for publication mid-March, but the German Handelsblatt has a leaked draft in hands.
The law, drafted by Industry Commissioner Thierry Breton, aims to counter "growing supply risks" in raw materials needed for digitization and the energy transition. According to the draft, ten percent of the European demand for “strategic raw materials” is to be mined in the EU in the future. An additional 15 percent is to be obtained through recycling.
So far, the EU has classified 30 minerals or groups of minerals as critical - such as gallium, phosphate, cobalt and lithium. The list will now be revised regularly.
The EU also wants to promote the construction of refineries in which the minerals are processed and proposes a production target of 40 percent of the demand. Up until now, there has hardly been any capacity in this area in Europe.
In order to achieve its goals, the EU relies on faster approval procedures. So far, more than ten years can lie between the first application for the exploitation of a strategic raw material deposit and the start of production. In future, the approval process should take a maximum of two years. Above all, the assessment of environmental consequences should be shortened. The Commission hopes that the first projects will be implemented as early as 2030.
Let’s do the math for rare earths, then, and see if this makes any sense for rare earths.
The numbers
The EU imports about 16,000 t of rare earths compounds per year, of which ca. 12,000 t are uneconomical cerium compounds at ca. US$3/kg and 3,000 t are uneconomical lanthanum compounds at ca. US$2/kg. Leaves 1,000 t of value-carrying rare earths.
For simplicity sake lets simply put import = consumption, disregarding inventories, exports from Estonia and re-exports from Benelux.
40% Processing
40% of 16,000 t = 6,400 t/y. Solvay’s token capacity at La Rochelle and Neo Performance Materials Sillamae factory can already easily exceed that target already. Add to that whatever REEtec will be able to contribute sometime in future (3,000 t?).
The target is over-fulfilled already now. A lowball.
15% recycling
15% of 16,000 t = 2,400 t. One facility alone could do it, if it weren’t for “not in my backyard” and the ongoing bans of the EU Chemical Agency of any substances deemed unwanted, putting any recycler at the risk of “being banned out of business” by the zealots at the EU Chemical Agency.
But lets be positive. This is achievable. It would just need scrap feed of 8,000-9,000 t/y, which the EU Commissioner Breton still needs to find.
Good luck with that.
10% Mining
An output of 1,600 t/y as rare earth oxides of which typically 1,120 t would be uneconomical La and Ce compounds (both are typically 70% of proportional REO contents).
The small deposit at Storkwitz, Germany could do that probably for 7-8 years, but there is the good-old, time-honoured “not in my backyard”, the popular German tradition of being against everything new and being in favour of everything remaining exactly the way it supposedly always was, and the commercials, as this will be horribly expensive.
Perhaps the tailings of Kiruna can count against that target?
Conclusion
Commissioner Breton is seemingly lowballing here, as far as rare earths are concerned.
The true dependency
For the umpteenth time: The rare earth dependency of the EU has always been a myth, as the dependency has long moved up the value chain.
Last year the EU imported 20,000 t of rare earth permanent magnets from China, while having no meaningful domestic production at all. This is the rare earth dependency.
And this is, what needs to be tackled.
Our take
Conceptually we see a current raw material supply risk for a sizeable NdFeB producer with metal making capacity in the EU, but, even considering Murphy’s law, 2025/26 ex-China new and additional capacity for rare earth oxides will have come up, looking for a home.
With this in mind, NdFeB is what the EU must attack - also in order to reach recycling targets - if the EU Commission should be serious about reducing import dependence.
If NdFeB are not attended to, the import dependence *will inevitably* move further up the value chain, e.g. permanent magnet electric motors.
If the whole EU exercise is only for show, it likely is, then of course the Commission can forget about the whole thing, continue engaging in sustainability prayer-sessions and pouring millions of taxpayer euros into consulting reports as well as still-borne projects.
India Mulling To Discuss Mechanism With Australia Under FTA For Smooth Supply Of Critical Minerals
India is considering to discuss a mechanism with Australia for a smooth supply of their critical minerals under the comprehensive free trade agreement amid a huge demand in the domestic market, according to sources. India and Australia have implemented an Economic Cooperation Trade Agreement (ECTA) in December 2022, and now negotiations are on for expanding the scope of that agreement into a Comprehensive Economic Cooperation Agreement (CECA).
There is an MoU (Memorandum of Understanding) signed between Khanij Bidesh India Ltd (KABIL) — a joint venture of three central public sector units under the Ministry of Mines — and the Critical Minerals Facilitation Office (CMFO), Government of Australia, which aims at strengthening bilateral trade relationship and lays the path to deliver on a shared ambition to develop secure, robust and commercially viable critical minerals supply chains.The sources said that at present, nothing has been finalised, but there is a consideration that 'we can think of some kind of mechanism under which India can get assured supply of these minerals'.
India is somewhat stuck in the hen and the egg dilemma. Start with NdFeB and hope for raw material to become available, or wait for raw material to become available before starting with NdFeB. Neither has a track record in India.
IREL are confident to produce NdPr.
KABIL so far has little to show for in rare earths.
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