RE Prices Continue Skyrocketing; RE Seabed Miner To List; EU: RE Activism Devoid Of Results; Fraud Alert: The Rare Earth Vault Is Back!

Rare Earth 2020 November 27

The prices for magnetic materials in China skyrocketed this week, and overall for November this is the picture:

On 27th NdPr prices retreated by 2.25% in RMB terms, compared to 26th.

Prof. Dudley J. Kingsnorth once put the neodymium oxide price of US$ 70/kg as the ceiling price when replacement would kick in. However, in calling RE markets he is also only a mere mortal and made bad calls. But keep that number in mind.

Please remember, that the main future driver for RE demand, the automotive industry, generally completely fails in appreciating raw material price increases.


Seabird Exploration announced that it will list a minority share of it’s subsidiary Green Minerals AS, who plans to mine nodules on the seafloor off the Norwegian coast:

Background seems to be the disastrous development of Seabird Exploration’s oil centred business.

The only other listed ocean floor miner we are watching is Chatham Rock Phosphate Ltd, a New Zealand company.


It has been almost 4 years since the 5-year long EURARE project concluded.

157 RE occurrences incl. 34 deposits inside and neighbouring the EU were investigated, even the most hopeless ones like Storkwitz in Germany, Aksu Diamas in Turkey and compliance-problem ridden Ditrau in Romania.

Literally no stone was left unturned.

In the final report you will read this correct conclusion:

This is of course a commonplace and it applies to each and every rare earth market on the planet. That is also, why China must export RE. This result we could have given the EU in 5 minutes, no need for 5 years time and waste of millions of Euros.

“EURARE partners where Kvanefjeld, Kringlerne, Norra Kärr, and Fen.”

To translate that for you, they are talking about:

  • Greenland Minerals’ Kvanefjeld RE and U deposit in Greenland.

  • Kringlerne is the TANBREEZ project in Greeenland, privately owned by Australia’s Greg Barnes. It is polymetallic, and it is potentially gigantic.

  • Norra Kärr is Leading Edge Materials’ RE project in Sweden.

  • Fen is REE Minerals A/S’ RE project in Norway, ca. 25 km from Herøya Industrial Park, where the EU sponsored REEtec phosphogysum RE extraction project at Yara’s fertiliser plant is located.

Greenland Minerals’ largest shareholder and 100% off-taker is state-owned China Aluminium’s Shenghe Resources. In Greenland Minerals’ published strategy the EU plays no role whatsoever. Actually, the original plan may have been for Shenghe Resources to even acquire a controlling stake in Greenland Minerals. Also it would turn out uranium, which for the strictly anti-nuclear German leading the EU Commission is a no-no.

Tanbreez were a founding member of EURARE and are disappointed by the results. Tanbreez potentially has 4.3 billion tons of mineral resource, including zirconium, niobium, tantalum and rare earths, however, as far as RE is concerned, in relatively low concentrations. Greg Barnes says, he can achieve higher concentrations by cheap magnetic on-site separation.

Norra Kärr is being challenged by environmental activists. Currently Leading Edge encounter another challenge to their expired and re-applied license in Swedish courts. Norra Kärr is located near a "Natura 2000" area which is protected by EU law. 

Fen Fjeld until 10 years ago was considered a major thorium resource by Norsk Thorium AS (originally Telebolig AS). Norsk Minerals/REE Minerals AS have been exploring Fen since 2011 for RE. In a 2016 presentation on pages marked“Strictly private, not to be distributed to any third party” we find a list of issues, that may have continued posing significant obstacles on the way forward.

The latest status of both a.m. Greenland projects you can find here.

The foreign collaboration partners of EURARE also contained strange choices.

EURARE final report further concludes:

For “understanding of the interactions that underpin business exchanges and determine how prices are derived and negotiated” we recommend an occasional read of The Rare Earth Observer or, alternatively, a visit to a Brussels vegetable market.

The conclusion that recycling is a good solution, as it yields the most popular rare earths without incurring pesky by-products, is also not exactly new. Trailblazers of an industrial size magnet recycling concept are Canada’s Geomega and Talaxis/Mkango’s Hypromag.

After EURARE there were some other attempts at producing ever higher mountains of paper, the EU Commission seems to have woken up to the fact that it is on a road to nowhere and announced:

“We have to drastically change our approach.” An unusually emphatic, bold, determined statement by EU Commission Vice-President Maros Sefcovic.

We could not possibly agree more, but here comes the content of the initiative: “The Commission also said it would work with member states to identify mining and processing projects in the EU that can start work by 2025.

We sense a severe disconnect here.

Obviously, the EU Commission pretends blissful unawareness of its very own EURARE final report, which contains exhaustive and complete lists of all and any domestic options that are out there.

Now a skilled bureaucrat will respond, that the report is already 4 years old and it did not lead to the desired results. In this regard we ‘d like to humbly submit for consideration that, since the EURARE final report was published, no tooth-fairy placed a Th- and U-free rare earth deposit under the cushions of EU officials.

And here is, how the next 5 years will be spent: ERMA - the European Raw Materials Alliance. Another debating club of no consequence, paid for by the EU taxpayer.

EU politicians and its bureaucrats are united in their struggle to evade responsibility, by inducing repetitive processes we would refer to as infinite loops, pretending activity and progress where there is simply none, plus artificially creating meaningless buzzword obstacles like transparency and sustainability.

“Brussels is doing it’s best to defend the indefensible and make the unworkable work,” a befitting quote of the immortal Sir Humphrey Appleby in Yes Minister exactly 40 years ago.


A glimmer of hope is the Rare Earth Industry Association to set the heads in Brussels straight. REIA announce this event (clicking through for the event page):


Thanks for reading and have a nice weekend!

//Companies

Guangsheng Nonferrous Metals: Holding subsidiary obtains exploration license, which is expected to increase rare earth resource reserves

On the evening of November 19th, Guangsheng Nonferrous Metals Co., Ltd. (hereinafter referred to as “Guangsheng Nonferrous”, 600259), one of the six major rare earth groups, a subsidiary of Guangdong Rare Earth Group, disclosed that recently, Xinfengguang, a subsidiary of Guangsheng Nonferrous Sheng Rare Earth Development Co., Ltd. (hereinafter referred to as "Xinfeng Company") obtained the prospecting license issued by the Ministry of Natural Resources (Certificate No.: T1000002020105018000063).

According to the announcement, the specific survey project is named Zuokeng Rare Earth Mine Exploration in Yaotian Town, Xinfeng County, Guangdong Province. The survey area is 36.13 square kilometers and the expiration date is September 23, 2020 to September 23, 2025.

In the first three quarters of this year, Guangsheng Nonferrous Metals' operating income was 6.305 billion yuan [~US$ 960 million], an increase of 120.02% compared with the same period last year (year-on-year); the net profit attributable to shareholders of the listed company was 30.1294 million yuan [~US$ 4.6 mio], a year-on-year decrease of 57.17%.

Comment: At least they managed to break even. From Q4 they should look much better, based on the RE price rises.

Northern Rare Earth: The second largest shareholder has reduced the number of shares held by 36 million shares

Every AI newsletter, Northern Rare Earth (SH 600111, closing price: 12.41 yuan) issued an announcement on the afternoon of November 20, stating that on November 20, 2020, the company received the "About Jiaxin Co., Ltd. The letter on the completion of the implementation of holding shares of China Northern Rare Earth (Group) High-Tech Co., Ltd.", its share reduction plan has been implemented. The company’s shareholder Jiaxin Co., Ltd. has completed the implementation of its shareholding reduction plan. During the period, the company reduced its shareholding by 36 million shares at a price of 9.83 yuan/share to 14.80 yuan/share. The reduced shares accounted for 0.9909% of the company's total shares.

The 2019 annual report shows that the main businesses of Northern Rare Earth are commercial and industrial, accounting for [only!] 51.07% and 48.37% of revenue respectively.

The chairman of Northern Rare Earth is Zhao Dianqing, male, 58 years old, Mongolian, bachelor and master. The general manager of Northern Rare Earth is Li Jinling, male, 52 years old, doctoral student and senior economist.

Comment: China Northern hold stakes in ~40 rare earth downstream companies, many minority holdings. This is a distributed value chain. Worth noting, that China doesn’t squeeze everything under one hood.

We also note, that ultimate controllers of many downstream companies under China Northern are state and party funds in Beijing as well as provincial state-owned institutions.

Greenland Minerals to tap investors for $30M

Greenland Minerals (GGG) has received firm commitments to undertake a $30 million share placement.

All up, 125 million new fully-paid ordinary shares will be issued to institutional, sophisticated and professional investors at 24 cents.

New shares are expected to settle on Wednesday, December 2.

Petratherm set to raise $2.16M for South Australian projects

Petratherm (PTR) has received firm commitments to undertake a $2.16 million share placement.

The mineral exploration company entered a trading halt late last week but did not provide any information as to how much it would be raising or what it will use the funds for.

All up, 14,285,714 fully-paid ordinary shares will be issued to sophisticated investors at 14 cents each – representing a 13.5 per cent discount to Petratherm's 15-day volume-weighted average price.

Comment: Who invented the term sophisticated investors to replace the term 3F investors (family, friends and fools)?

US rare earths miner MP profit surges in first results post listing

MP Materials Corp said on Monday its third-quarter profit jumped more than fivefold, days after the US rare earths miner went public on the New York Stock Exchange through a deal with Fortress Value Acquisition Corp.

Comment: China removed the punitive import duty on MP’s bastnaesite, price and quantity could increase. That is, why. Still a single customer concept.

Northern Minerals appoints new non-executive director to board

Northern Minerals Limited (ASX:NTU) has appointed LiangBing Yu to the board as a non-executive director, effective immediately.

Comment: 3 out of 5 board directors from China, reflecting corresponding shareholding. The Australian government had stopped China Northern Rare Earth Group investment in Northern Minerals.

Lynas Kalgoorlie planned for 2021 construction

Rare earths miner Lynas is hoping to start construction of its Kalgoorlie cracking and leaching facility by mid-2021, subject to approvals.

Lynas says Texas project a no-go zone while virus rages

Ms Lacaze told the company's annual meeting on Thursday that Lynas would not send its engineers to Texas – the proposed site of the heavy rare earths separation plant – until the situation improved.

Comment: Don’t hold your breath.

Rare earth riches in the mine waste pile

Avalon is carving out a space in the clean and green tech economy with a diverse mix of Northern Ontario exploration properties in lithium, rare earth metals, cesium, tantalum and other non-traditional minerals that the company hopes to advance over the next couple of years.

Comment: If you dig deep in the filings of Avalon you realise, no matter if market was good or bad, stock prices booming or not, financing available or not, that in 25 years Avalon have achieved nothing. Still beating some of the same dead-horse projects from up to 25 years ago, that get recycled every now and then.

//Policy

European Union plans mammoth expansion of offshore wind farms

The European Commission said in its offshore renewable energy plan that the EU’s climate change targets required 60 gigawatts (GW) of offshore wind by 2030 and 300GW by 2050, confirming draft plans reported by Reuters.

That is a five-fold increase by 2030 and a 25-fold increase by 2050 from the bloc’s current offshore wind capacity of 12 GW.

Our aims are ambitious, but with our vast sea basins and our global industrial leadership, the EU has all that it needs to meet the challenge,” EU climate policy chief Frans Timmermans said.

Expanding offshore renewable energy will require investment worth nearly 800 billion euros ($946 billion) by 2050, mostly from private capital, to build mammoth new wind farms at sea and scale up nascent technology like floating turbines.

Typical gesture of an EU bureaucrat

Comment: To ensure that China only gets to supply the high added value components of the EU “windmills”, while the low end components, bending and welding of steel plates, is done in the EU, the EU has started an anti-dumping investigation into imports of steel towers from China used for wind turbines, instead of anti-dumping the entire wind towers. Since China is a certified non-market economy, anything goes. Fabulous internal coordination. We can’t wait to see what is next.

//Science

When Iron behaves like a rare-earth element - and why

In work recently published in Chemical Science, an international team of researchers used a variety of synchrotron X-ray techniques to characterise iron-doped lithium nitride, a novel material in which iron atoms exhibit magnetism as if they were a rare earth element. A full understanding of its structure could lead to the development of transition metal magnets, high-density digital storage, and advances in quantum computing.

//Market

Rare earth soaring! Highest price in 3 years due to expansion of EV in China. Japan becomes more vigilant

The international market for rare earths, which are used in electric vehicle (EV) motor magnets, has skyrocketed, reaching the highest price in about three years since November 2017. In China, the number of "new energy vehicles" such as EVs sold in October doubled from the same month of the previous year to 160,000 units, and demand surged and prices were pushed up. In addition, China may include rare earths in the export restrictions on strategic goods that will come into effect on December 1, and there is a growing sense of caution in the market about further price increases and procurement difficulties.

Rare earths, which have characteristics such as superconductivity and ferromagnetism, are used in high-tech products such as EVs and industrial robots. China accounts for about 60% of the ore production share, and Japan also depends on China for about 60% of its imports, which is greatly affected by trends in China's supply and demand.

The market price of neodymium, which is a type of rare earth and is used for motor magnets, is currently around $ 79 per kilogram, which is about 40% higher than the low price in June. In November, the surge in EV demand in China has strengthened the surge, which is about 16% higher than the end of October.

In China, the number of new energy vehicles sold increased by 19.3% from the same month of the previous year to 98,000 units in July against the backdrop of the economic recovery from the Corona disaster and the provision of purchase subsidies, turning positive for the first time in 13 months. It was. It has been steady since August, and some people in the market say, "The supply and demand is tightening due to strong demand from China, making it difficult to procure rare earths" (domestic trading company).

At present, the trend of the export control law, which allows China to export strategic goods as a permit system, is also being closely watched. Although details have not been clarified, rare earths may be subject to regulation because they are also used for military equipment such as guided missiles, and it is thought that "the market price will rise further if supply is restricted" (same as above). There is.

With China's export control law coming into force in December, Minister of Economy, Trade and Industry Hiroshi Kajiyama said, "If there is an unreasonable demand for a division of the supply chain, we will take the lead in supporting it." Being vigilant.

Comment: Every industrial nation has an export control law (at the time of this writing another one is pending in the UK). Rare earth production know-how has been banned for export since 2001, 19 years ago. The China law has been adopted and implemented.

//Fraud Alert

RARE EARTH METALS – A SOLID 2020 INVESTMENT IN STABLE MARKETS

Among the other assets, REE have the possibility to be traded strategically too. Resources that are tangible just like gold and silver as well as rare metals can have a legal title that a purchaser can hold and can be stored in a facility. 

Comment: This is exactly the type of fraud, that got Beckhams’ former brother in law jailed. No, rare earths are not commodities, they are not exchange traded like silver, gold, aluminium, copper & co.