RE Prices No Clear Direction; State Reserve Bureau At Work; China Complaints; ISO Standards For RE; India Dysprosium

2020 Rare Earth December 19

“Healey’s First Law Of Holes: When in one, stop digging.”
― Denis Healey


Prices:

Price development from beginning November until now:

and from beginning December until now:

China’s JL Mag announced that they would have enough raw material to perform current orders for permanent magnets, which suggests the situation at other permanent magnets companies may be different.

While there is undoubtedly support for high prices from strong demand, we need to caution that high priced raw materials are generally not supported by edged-in-stone China industrial policy.

The China State Reserve Bureau seems to have become active in the market towards the end of the current 5 year plan. It may well have been instrumental in kicking off the recent sharp price increases, however, we have no publicly available evidence to support that.

A recent report assessed the activity of the Bureau in rare earth:

Extending the time window to the entire 10 years, we found that the purchase and storage of rare earths has not fundamentally changed the supply and demand relationship in the rare earth market, but it has raised the market’s expectations of the price of rare earths and the value of heavy rare earth companies.

Last year when after many calls from RE companies the Bureau became active, it’s bids were so low-ball, that no-one wanted to accept them.


A write up on China’s sina.com financial networks in all earnest compares apples and eggs, iron ore and rare earth, complaining about the rising iron ore price and the generally weakish rare earth prices, of course suggesting all of it being entirely the fault of hostile foreign forces, and calling for a (socialist) price control system.

Until 2009 there were yearly price agreements between the world’s principal iron ore suppliers and the world’s principal importers, a system everyone was happy with. In China the yearly negotiations then were headed by the China Iron & Steel Association with the personal participation of Li Xinchuang, quoted in the article. China terminated the yearly iron ore contracts and announced to henceforth to only buy iron ore from the spot market in 2009. This was followed by a massive price surge for iron ore. Truth is, the overall situation in iron ore today is entirely Made in China.

In rare earths China has been the sole controller of the entire world market for the longest time and it is also the world’s largest consumer. RE Prices are entirely Made in China, nowhere else.

Now, given the iron-fisted party control over publications of anything in China, such articles are no accident.

For a decade China has been trying to concentrate its steel industry, with only marginal success. And in rare earths there are also the complaints about too many players. And that is the true objective of such articles: give impetus to form consensus on industry consolidation, or, with Chinese characteristics: Supply-side reform.


Rainbow Rare Earth published a new presentation. 4 years after listing all values are still conceptional in nature. That is not Rainbows fault, it is just the nature of that site. They keep referring to a 2012 JORC report, which is part of Rainbows listing prospectus.

MSA, the JORC consultant, comment:

Trial mining is exactly what the previous managing director did, with disheartening results. Prime reason for that are not only the high cost of production, but also enormous logistic cost because of the >1,000 km distance to port. As if that was not enough, the tospy turby of Corona has sent ocean freight rates skywards.

In case of <60% concentrate you are trucking >40% of worthless rubble through the landscape, so the higher the purity and the value of the product, the lower the logistic cost per value-carrying ton of material. Consequently, Rainbow try to upgrade their concentrate to higher purity carbonate, which will cost them US$ 20-25 mio in capex.

This may be a good part of the way forward, however, it is a gamble, because of the uncertainty about how much value-carrying material is really out there.


In 2016 a technical committee for rare earth was established under ISO, the so-called ISO/TC298. It’s task is to standardise rare earth internationally. ISO depends on the participation of its 160+ member countries, and this TC298 rare earth committee has the participation of 9 countries, all of them are principal RE and aspiring RE countries - except for one: the EU is only represented on the committee by one lone soul from Denmark, some other EU countries are “observers.” There is zero participation from the EU Commission.

In the past four years TC298 has come up with 3 (three) international RE standards, definitions of terms (=words!), which is slightly less than impressive. At this speed TC298 won’t be finishing its job until the mid of the next century.

China supports the internationalisation of its almost complete RE standards, or so it makes us believe (if we see the humble standards in the pipeline of the committee, we wonder).

On the part of the EU lack of participation, lack of interest should be rather astonishing, because the EU is an aspiring rare earth producer (or so the EU Commission makes us believe) and the fastest, cheapest and most effective way to achieve industrial standardisation would be the adoption of China RE standards through ISO (or sidelining ISO and outright direct copy/paste into EN-standards, if permissible), rather than re-inventing the wheel in decades of cumbersome work - although that would guarantee lifetime employment for a number of people in Brussels.

The EU Commission wastes time with building castles in the sky and is even musing about blockchain in rare earth, adding yet another well-sounding but meaningless buzzword to otherwise general unproductiveness, reportedly so far having cost the EU tax payer more than a complete rare earth mining operation plus refinery would cost.

If Brussels-based REIA can’t get any sense into the EU Commission, then there is little hope to end this unproductive self-service and no hope for actionable plans under realistic conditions.

Meanwhile, through ERMA, REIA calls for concrete RE project proposals, a laudable initiative.


There are some small rare earth flowers growing in the US, apart from MP.

However, MP are a special case. Their fate depends on their sole and single customer cum substantial shareholder, China’s state-owned Shenghe Resources. Even though Shenghe have no seat on the MP board, their opinion matters the most at MP, as a Shenghe Resources withdrawal would be an unmitigatable fiasco for MP.


Thanks for reading, have a nice weekend!

//Companies

DAE Secretary inaugurates new Dysprosium Plant of IREL

The Dysprosium production facility of IREL (India) Limited has been dedicated to the nation by Department of Atomic Energy’s (DAE) Secretary & Chairman of Atomic Energy Commission KN Vyas via virtual mode in commemoration of IREL’s Platinum Jubilee celebrations in the presence of IREL (India) Limited’s Chairman and Managing Director (CMD) D Singh.

The principal source of Rare Earth Elements (REE) in India is Monazite which is found in association with six other atomic minerals and is commonly known as heavy minerals. Indian Monazite is rich in light Rare Earths and the heavy Rare Earths are found in traces and thus difficult to extract. The content of REE in Indian resource is around 0.05-0.06 percent out of which the content of Dysprosium is around 0.00009 percent.

Rainbow Rare Earths Completes Acquisition Of Phalaborwa

Rainbow Rare Earths Ltd - Burundi, East Africa-focussed rare earth element miner - Announces the initial completion of the transaction to acquire the Phalaborwa Rare Earths project. Initial consideration is USD250,000 with two additional tranches of equal amounts paid over the next year.

Comment: There are many other projects with the same concept out there.

RareX drilling sets stage for Cummins Range resource upgrade

Notable results are 2m grading 20.6 per cent total rare earth oxides (TREO) and 0.1 per cent niobium within a broader 47m zone at 3.1 per cent TREO and 0.1 per cent niobium along with 6m at 5.6 per cent TREO and 0.5 per cent niobium within 66m at 1.8 per cent TREO and 0.3 per cent niobium.

Zimtu Capital Corp. Announces Contract with Saville Resources Inc.

Zimtu Capital Corp. announces it has signed an agreement with Saville Resources Inc. to provide its ZimtuADVANTAGE program. Zimtu shall receive $11,666.67 per month for a period of twelve months, with the entire 12 months payable at the beginning of the contract.

and

Saville Announces Non Flow-Through and Flow-Through Private Placement

Saville Resources Inc. is pleased to announce a non-brokered private placement consisting of the issuance of: (i) up to 8,000,000 units (each, an "NFT Unit") at a price of $0.05 per NFT Unit for gross proceeds of up to $400,000 (the "NFT Offering"), and (ii) up to 12,000,000 shares (each, an "FT Share") at a price of $0.05 per FT Share for gross proceeds of up to $600,000 (the "FT Offering" and, together with the NFT Offering, the "Offering"). Insiders may participate in the NFT Offering.

The aggregate gross proceeds from the sale of the NFT Offering will be used for general working capital.

The aggregate gross proceeds from the sale of the FT Offering will be used for exploration and development of the Company's Niobium Claim Group Property in Quebec.

Greenland initiates permitting consultation on massive Kvanefjeld project

On December 17, the Naalakkersuisut (Government of Greenland) approved the initiation of the public consultation on the Environmental Impact Assessment report and the Social Impact Assessment report on Greenland Minerals' rare earths and uranium project at Kuannersuit.

The consultation period starts on December 18, 2020 and ends on March 12, 2021.

Plans To Process Radioactive Sand In San Juan County Raise Questions About State Oversight

Energy Fuels is one of a handful of companies working to change that. It announced its intention to process ore containing rare earth metals following a push from the Pentagon in April to spur domestic production.

But the company’s announcement that it is already processing monazite sand has raised questions about the state’s permitting process.

Sarah Fields is an anti-nuclear activist in San Juan County, and she said the state erred in allowing Energy Fuels to import the source material under its current license to process uranium ore.

She claims the state of Georgia regulates the processed monazite sand under a special license because of its high concentration of uranium or thorium, which means the sands are not technically ore.

“They cannot fall under any definition of ore, because ore is not regulated under radioactive material licenses,” she said.

The Utah Division of Waste Management and Radiation Control oversees licensing for the mill, and a spokesperson for the division said it received a letter from Energy Fuels informing the division of its plan to process the monazite sand. Energy Fuels provided the division with information about the material, and the division agreed that it qualifies as “natural ore.”

Comment: Regarding Energy Fuels, we learn that the supply from Southern Ionics might be monazite concentrate with 55% TREO, of TREO 22% NdPr, plus 0.2% of U.

Pensana Rare Earths – Virtual Investor Presentation 15th December

Comment: Partly a good grilling.

//Market

Firm demand, low supplies to lift China’s Tb, Dy prices

A national stockpiling drive led by China's state reserve bureau (SRB) in the second week of December has further accelerated the price rally, prompting suppliers to withhold material from sales in anticipation of further price rises before the end of this year. Prices for 99.99pc terbium oxide were assessed higher at a more than eight-year high of Yn6,700-6,750/kg ex-works on 7 December, up by more than 40pc from Yn4,800-4,850/kg ex-works in mid-October and an 92pc increase from a year-to-date low of Yn3,490-3,520/kg ex-works on 6 January.

The range for 99.99pc terbium oxide held firm at Yn6,700-6,750/kg ex-works yesterday on the back of limited spot availability and suppliers' reluctance to accept lower prices. But the SRB failed to stockpile the material because of much lower tender prices than spot offers, so downstream buyers started to scale back purchases with concerns about downside risks.

But the SRB likely launching a second round of national stockpile purchases for medium and heavy rare earths in mid-January has shored up confidence in the spot market again. This fuelled spot buying activity from metal processing and magnet plants, with around 1t of 99.99pc terbium oxide closing today at a fresh high of Yn6,800/kg paid by cash.

The core ores vital for a green future

Greek SME Seismotech is in the business of finding these key elements. Providing a range of exploration services, it helps mining companies prospect in a more sustainable way by enabling them to find minerals without having to dig up the ground - thus reducing the environmental damage often caused by mining.

“The technology that we apply is passive seismic, which is based on recording and analysis of naturally occurring seismic signals, such as earthquakes or ambient seismic noise. In that sense, it permits the mapping out of mineral resources in a totally environmentally friendly manner,” explains Seismotech's CEO Nikos Martakis.

Seismotech is a member of Smart Exploration, an EU funded project that aims to develop more cost-effective and sustainable solutions within the mining industry.

Rare earth international standardization work has achieved initial results

From November 25 to 27, the Rare Earth Terminology International Standards Conference and the 2020 National Rare Earth Standardization Technical Committee Annual Meeting was held in Zhangjiakou, Hebei.

As an expert in the advisory group of the Chairman of the International Organization for Standardization Rare Earth Technical Committee (ISO/TC298), Academician Huang Xiaowei said that advancing the development of international standards for rare earths is of great significance to improving the safety and core competitiveness of my country's rare earth industry, and safeguarding the country's core interests and international influence.

The meeting issued the "2020 Rare Earth Standards Committee Technical Standard Excellence Award" and commended the "2020 Rare Earth Standardization Advanced Workers". The two industry standards "Green Design Product Evaluation Technical Specifications for Rare Earth Pyrometallurgical Products" and "Lanthanum Cerium Metal", which were developed by the Rare Earth Research Institute and its subsidiary Leshan Youyan, won the 2020 Rare Earth Standards Committee Technical Standard Award; Dr. Longsheng Zhao won Comment on advanced workers of rare earth standardization in 2020.

Iron ore has risen to 1042 yuan/ton, but rare earths have been "sale"! Why does China have no pricing power?

Although the market price of rare earths has generally risen in recent weeks, the price of praseodymium and neodymium oxide has increased from 267,500 yuan/ton to 398,500 yuan/ton in March, an increase of 49%, but market analysis also pointed out that this is only a short-term rebound. It did not reach an inflection point.

Regarding rare earths, it is also "imperative" for my country to improve the price mechanism of rare earths. China Nonferrous Metals News, a subsidiary of the China Nonferrous Metals Industry Association, also suggested on November 16 that the state can introduce policies such as total rare earth control and sales price control, and use price leverage factors to improve the rare earth price mechanism and further grasp the international role of rare earths. Pricing power.

Comment: The price movements in rare earth are entirely home-made.

//Science

New path to rare earth mineral formation has implications for green energy and smart tech

There are more than 250 known REE-bearing minerals, but only three are economically viable and exploited commercially. Bastnäsite is likely the primary valuable mineral for REES in the world and was the focus of the Trinity team's study.

By considering how water containing REEs interacted with calcite, a mineral that is ubiquitous in nature and often present in hydrothermal environments, the team discovered a new pathway by which bastnäsite formed.