The Big Picture; More RE Hype; Prime-Cut All-American BS; China orders hapless attack on Western Rare Earth Companies; Lynas, Search Minerals, Energy Fuels, PVW, MP, Iluka and more.
Rare Earth 2022 June 29
Everyone who is not confused around here has merely been misinformed. Therefore, here the current big picture in rare earths as viewed from the Little Red Dot, one and a half degrees north of the equator:
The West’s dependence is primarily on China rare earth magnets and the products made with this magnets;
Absent sizeable rare earth magnet manufacturers, having rare earth products alone is of very limited use.
Energy Fuels proceed with their concept to separate Monazite from Georgia, USA, to rare earth oxides. They take the bold step of entering rare earth mining in Brazil. Question is scale and sustainability, read below;
Lynas have been retained by the DoD to build and operate a 5,000 t/year rare oxide separation facility and separate all rare earths, whether light or heavy, which would be a first for the company. Details read below;
In terms of magnet materials that will likely be enough for defence purposes, but not terribly much more;
Question remains, who will consume rare earths in the US, produce almost 50 types of sintered NdFeB magnets, and further downstream, how to onshore downstream products like electric motors and such.
Glimmer of hope are Less Common Metals (LCM). This business could blossom and grow exponentially, if LCM could ever get rare earth oxides at cost like inside China, 13% lower than outside China;
Everything else in terms of rare earth and UK is NATO: No Action, Talk Only. It is all about pumping stock prices with grand announcements and big promises, but there is really no substance.
Keeps turning in circles, ever faster , trying to find its own posterior in the dark. Embarrassing.
A hint: Deregulation is the key. But if the EU deregulates, bureaucrats lose jobs. Unacceptable.
One bright spot: Neo Performance Materials test the water with a sizeable sintered NdFeB permanent magnet project at the location of Europe’s only rare earth processing facility, in Estonia. If the timing is right, it could coincide with new rare earth oxide supply from Australia;
Another bright spot, somewhat related: Mkango’s project, to ship rare earth concentrate from Malawi via Mozambique and Gdansk to Pulawy in Poland, during Soviet times the location of a petrochemical complex, now private. The idea is to produce finished rare earth products there.
One should not discount the possibility of well-funded REEtec in EU-affiliate Norway to finally turn out some rare earth products.
The buzzword in Japan is to “de-China” everything, i.e. to detach from China, because there is not only no prospect for better relations under the current, possibly perpetuated China administration, relations are actually on the path of getting even worse;
Apart from some recycling there is no rare earth processing in Japan;
Japanese companies’ continued role in rare earth magnets fully depends on successful sourcing of non-China rare earth products.
Changes the game by boldly funding Iluka’s project for producing finished rare earth products;
Envisioned opening of Lynas’ Mt Weld Duncan for supply to Texas project;
Among the also-rans there are other prospective projects, equally costly.
Applied the watering-can approach, everybody gets a little support, no-one gets enough, this way will completely lose out to Australia’s boldness in rare earth;
Some small efforts may come to fruition, e.g. Vital Metals raw material for REEtec, Norway, Geomega’s recycling and the SRC 5,000 t monazite facility.
Winston Churchill once said: “India is the country of the future - and it will always be.” But don’t count India out. Even though painfully slow, India is getting there. Expect Toyotsu India to fill their separation capacity for the very first time ever, since the company was established by Wako Trading more than a decade ago;
Vietnam will remain small and mostly supply raw material to China. In terms of finished rare earth products the China-owned facilities there may turn out limited quantities that may not end up on the international market;
Myanmar, Thailand, Malaysia, Indonesia and some African countries will eventually see China’s rare earth companies making bold moves to secure rare earth resources (see Shenghe taking a major stake in Peak, with an eye on the Tanzania resource).
Mind you, don’t be naïve, the dominant player in rare earths and permanent magnets is China. If rare earth magnet production in the West starts, it will take market share from capacities that China built ahead of time in anticipation of forthcoming demand growth.
You can’t expect foreign private firms to compete against China’s Ministry of Finance.
Therefore, unfortunately, new rare earth and sintered NdFeB production outside China absolutely need tariff protection.
It only requires the stroke of a pen in Beijing to reduce rare earth prices by 13% in one single day across the board, by lifting the VAT refund upon export of rare earth products to the same level as the VAT refund upon export of permanent magnets.
Simply lowering prices on command is also possible, it just takes a little longer, as we have seen happening since the beginning of March 2022, when MIIT ordered rare earth prices to be reduced.
Combined with a 5% devaluation of the strictly foreign exchange controlled RMB against the US-dollar, -25% and even up to -37% are achievable, all that in an undersupplied market. See here:
Governments need to be on their toes - or they’ll once again wake up facing the smouldering rubble of what could have been a rare earth value chain.
Strive for world domination?
What’s Lost in Translation? Discrepancies in Official Translations of China’s Foreign Policy Statements
I also analyze patterns based on document types and whether there are changes over time. Finally, for the differences in degree and the substantive differences, I describe what exactly is different in Chinese foreign policy statements and their official English translations.
The Chinese language wording of official documents is no accident, ever. Neither is the official translation an accident.
“….the current global governance system”: So China anticipates a change?
If like this, how can anyone not perceive China as a threat?
However, according to data released by the Supreme People’s Court, Chinese judges handled more than 640,000 IP rights cases last year — an increase of 22 per cent on 2020 numbers. Court officials also point out that more than 600,000 of those cases were concluded, up 15 per cent on the year prior, despite the higher case volume and the disputes becoming more varied and complex. Lawyers broadly agree that, in commercial disputes, China’s courts are becoming more sophisticated and better resourced with professionals, who have higher qualifications than ever before.
To be fair, for owners of IP the conditions in China have vastly improved during the past decade.
In view of the multitude of enforceable Chinese patents resting on rare earths and permanent magnets, it will be essential for junior rare earth miners and NdFeB magnet hopefuls vet all their processes and materials for existing patents and enter license agreement when appropriate.
For battle-hardened, intrepid rare earthlings who want to experience China’s Zero-COVID-Policy first hand, enjoy Chinese swab test roulette every other day and don’t mind a bit of quality quarantine-time, here you go:
For everybody else there is the
in Las Vegas, the choice of location reflecting the move of the rare earth epicenter to where the music plays right now:
As ever, Metal Events managed to attract the core competence in rare earth as speakers, e.g. David Merriman, the one person who consistently calls the market correctly, and the cardinal of rare earth, Prof. Dudley J. Kingsnorth, who now chairs an ionic clay exploration company, Pol le Roux, the man who actually walked the rare earth talk, and rare earth metal rock-in-the-ocean Ian Higgins.
We hope that Jack Lifton, whom we’d like to call the Pope of Rare Earth, will be in attendance, to red-face certain presenters with some spot-on questions.
Since we are at it, a warning
You may be receiving e-mailed approaches from some never-heard-of-before hole-in-the-wall Chinese export company with a glossy English website, offering you cooperation in NdFeB permanent magnets and all things rare earth, thanks to the brother of a second cousin’s wife knowing someone at a relevant manufacturer.
A truly solid base to build business on - NOT!
Recently there are cases of patent infringing products being offered by such fly-by-nite companies, for example on infringing patents of trigger-happy Hitachi Metals, Showa Denko/TDK, etc.
You don’t need to have bought and sold patent-infringing products, merely offering such products for sale can constitute a patent infringement already.
It's good to trust others, but not to do so is much better
(Benito Mussolini, trusted the Germans…)
Dealing with an unknown Chinese company is inherently risky. You absolutely need to background-check the company for the bare minimum, in order to validate if they are what they claim to be.
Apart from key-data there are also other compliance relevant indicators of China-based companies that could raise a red flag (the one without hammer & sickle).
Undercapitalised Chinese trading companies will fold-up on the first sizeable commercial disagreement or quality claim and simply evaporate.
If or not personal relationships or kinship exists between employees/owners of this entity and third-parties is legally entirely irrelevant.
This is not to say that all of them act in bad faith, to the contrary, it is often ambitious young people who draw on meagre resources and try their luck.
But more often than not they are not remotely what they pretend to be, they rarely know what they are getting into, they just hope that all goes well and that the foreigners won’t ever notice.
In a report published in April, Adamas said that the lack of new primary and secondary supply sources for rare earth oxides in the market from 2022 onwards, coupled with the inability of existing producers to increase their output, will create a major neodymium-praseodymium (NdPr) oxide shortage by 2035.
“If we consider that China is responsible for about 90% of the world’s neo [=NdFeB] magnet production today and 70% of the demand for those magnets exists in China, and then we consider…around one-third of the market to be unsatisfied by 2035, we can quickly begin to see the calculus that China is going to be faced with,” said Castilloux at a webinar on rare earths organized by BMO.
“Do they sell magnets to the domestic market to empower automakers to create their EVs…or do they simply export the magnets to a fridge manufacturer in Nebraska or Turkey? I think the decision is clear,” he added.
We don’t like sensationalism.
Let us be quite clear: It is China’s domestic demand for rare earths that rises, because magnet rare earth materials for NdFeB are 95% of the value of all rare earth products combined and it is China that produces ~90% of NdFeB magnets to cover the ever increasing demand for rare earth magnets.
China’s exports of NdPr, the most important magnetic ingredient for NdFeB magnets, are micro-small, almost exclusively to Japan, in absence of demand elsewhere. These exports may vanish, as more Japanese NdFeB patent protection expires in 2023 and 2024, with Lynas’ agent Sojitz (former Nissho Iwaii) taking the whole Japanese NdPr market or whatever will be left of it.
The demand for NdFeB magnets is increasing strongly. There are, however, no NdFeB manufacturers of meaningful size outside China and Japan as yet.
NdFeB magnets have come of age, more market concentration in China than currently is hardly possible, and there is international research for replacements.
Never say never: NdFeB, itself deemed technically impossible, began replacing the dominant SmCo magnet 40 years ago. Now SmCo is at 1% magnet market share.
Any replacement of NdFeB magnets is not in China’s interest, so China will do everything in order to ensure ample supplies of rare earths and NdFeB magnets at somewhat reasonable cost.
China already expanded capacities for NdFeB magnets beyond the 2025 forecast NdFeB world demand.
If China should deny access to NdFeB magnets, for whatever reason, it can also rightfully expect market access restrictions for the finished products from China that base on NdFeB.
Therefore, no matter how desperate the situation may become, China’s NdFeB magnet exports are here to stay, even if China’s domestic market may become under-supplied as a result.
China’s quest for heavy rare earths
Sometimes innocent essays unintentionally reveals something:
The Exploration Team Under the Shadow of Azalea - A Note on the Heavy Rare Earth Mine Survey Project Team in Anyuan County, Nonferrous Geology Brigade, Jiangxi Provincial Bureau of Geology
In Gaoyunshan Township, Anyuan County, Ganzhou City, Jiangxi Province, there is an exploration team composed of dozens of people. They often set off as soon as dawn breaks, and return after dusk, and their busy figures shuttled through the nearby mountains and dense forests every day.
This team, which looks quite "mysterious" to outsiders, is the exploration project team of Xituping Heavy Rare Earth Mine in Anyuan County, Jiangxi Provincial Bureau of Geology. This year, their task is to complete the survey and evaluation of rare earth mines in the 470-square-kilometer working area by the end of May. In the past three months since the project was established, members of the project team have discovered an ionic heavy rare earth ore, which further improves the guarantee capability of rare earth resources in the south of Ganzhou area, and also provides a strong foundation for the development of strategic emerging industries.
We reported about that particular 470 km range before. It seems, China is now considering to permit mining there.
Also innocent job posting can tell a story:
IREL (India) Limited is a Mini Ratna Category-I Central Public Sector Undertaking, under the Administrative Control of Department of Atomic Energy, having its Corporate Office at Mumbai and is operating its Atomic Mineral Mining and Mineral Processing Plants at Chavara (Kerala), Manavalakurichi (Tamil Nadu) & Orissa Sands Complex (OSCOM) (Odisha) to produce Ilmenite, Rutile, Zircon, Sillimanite, Garnet, etc.
IREL (India) Limited has also set up a Rare Earths Extraction Plant (REEP) at Odisha and a High Pure Rare Earths (HPRE) plant at RED, Aluva to produce individual Rare Earth Oxide/Carbonates.
IREL (India) Limited has also setup a joint venture with the Industrial Development Corporation of Odisha Limited for setting up a new Atomic Mineral mining and mineral processing plant in Odisha. Besides, the company‟s upcoming prestigious projects include Rare Earth and Titanium Theme Park at Bhopal, Madhya Pradesh.
The list is compiled from research by USGS staff and a review of at least a thousand public comments. Having minerals on the list is supposed to be a good thing for mining companies, but the benefits are not obvious or quantifiable. Some argue that being on the list confers “soft” benefits, but permitting authorities like the EPA and Forest Service state explicitly that their process is the same whether the project involves critical minerals or not.
This might suddenly be changing, however. In February of this year, within a day or two of Russia’s invasion of Ukraine, the Biden administration issued an executive order requiring US agencies to “prioritize production and processing of certain critical minerals.” While we don’t yet have case studies on what this will look like, it may be a sea change. And if you’re shocked it came from a Democratic administration, you’re in good company!
Good news for Rare Elements Resources’ Bear Lodge, perhaps?
China banned rare earth exports to Raytheon and Lockheed Martin, forcing the latter to temporarily suspend production of the F-35 fighter jet.
Congratulations, InvestorIntel! The Propaganda Department of the Chinese Communist Party stands in awe before this magnificent pile of prime-cut, All-American BS!
We got news for Mr Scannel: There is no worker standing next to an F35, shovelling blueish and yellowish powder into the airplane.
The whole rare earth boycott story was a hoax, as we reported 2 years ago.
China’s Ministry of Foreign Affairs had only dared to say, that they really don’t like the US to supply arms to Taiwan and that China will sanction Lockheed Martin. Period. Not more, not less.
Lockheed Martin at that time had considerable assets in China (we reported), until today there are no specifics about any concrete sanctions and specifically there was not one single measly word about rare earths, a boycott of which, in our humble view, would be entirely ineffective on Lockheed Martin.
It was the then editor of Global Times, Hu Xi Jin, who fantasised about rare earth embargoes so intensely, that someone rather high up the ladder had to explain to Hu, what utter devastation a rare earth embargo caused in China before and that the same devastation would happen again.
Hu had to publicly rescind his absurd fantasies on a People’s Liberation Army website and never again mentioned anything about a rare earth embargo, but he got fired later anyway for another one of his wild fantasies.
We reported on the whole case in detail.
But facts do not matter to upright American warmongers such as Steve Bannon, another loose cannon, who at that time had teamed up with fugitive Chinese mobster Guo Wengui and continued spinning the story of a rare earth boycott.
Regards the real reason for the production stoppage, perhaps Mr Scannel has ever heard of COVID, apart from the myriad of screw-ups that accompany the F35 programme? This here is probably closer to the truth:
The tests have been delayed repeatedly since 2017, and should have taken place this month, according to the Defense Ministry.
“The technical challenges and impact of COVID-19 have delayed the preparation of the simulation facility where the sophisticated testing of the most expensive US weapons system will take place,” said Jessica Maxwell, the spokesperson of Ellen Lord, the Defense Department’s undersecretary for acquisition and sustainment.
The F-35 Joint Program Office (JPO) and the Lockheed Martin (NYSE: LMT) industry team have agreed on an F-35 production rebaseline that ensures predictability and stability in the production process while recovering the aircraft shortfall realized over the last year during the COVID-19 pandemic.
The cooperation will see non-EU Norway participate in the ministerial meetings of the European Battery Alliance and in joint industry initiatives.
The two sides also agreed to further discuss the application of a rules-of-origin clause stemming from the Brexit agreement between the EU and Britain, which Norway has said could hamper its fledgling battery industry.
The Brexit clause stipulates that electric cars produced and exported in either Britain or the EU from 2027 must contain batteries produced within either of the two, or face a 10% customs tax.
Several battery production plants are being planned in Norway already, including projects by Morrow, Freyr, Beyonder and Corvus, as well as the Hydrovolt recycling facility and materials production by Elkem subsidiary Vianode.
How about rare earth mining?
The good, old, time-honoured story of Afghan resource riches
Forgotten for centuries before being rediscovered by a French geologist in the early 1960s, Mes Aynak in Logar province has been compared in size and importance to Pompeii and Machu Picchu.
The 1,000-hectare ruin sits enthroned high on a massive peak whose brown flanks reveal copper.
But in 2007, Chinese mining giant Metallurgical Group Corporation (MCC) led a state-owned consortium — which later took the name MJAM — and signed a $3 billion contract to mine ore over 30 years.
Fifteen years later, the mine still doesn’t exist – uncertainty and disagreements between Beijing and Kabul over the financial terms of the contract have caused delays.
However, the project is once again a priority for both parties and talks are ongoing about how to proceed.
The Taliban hope to earn more than $300 million annually from Mes Aynak – about 60 percent of the total state budget for 2022 – and now want to speed up the process.
Accounts on Twitter and Facebook have been posing as Texans to attack a rare earths processing facility in that state being built by Lynas Rare Earths Ltd., according to the cybersecurity firm Mandiant.
Other accounts in the network in June criticized Canadian rare earths miner Appia Rare Earths & Uranium Corp., which had just announced a new mining find in that country, and American firm USA Rare Earth, which had said it would build a processing plant in Oklahoma.
This is barely above the standard of China’s famed 五毛党 “50 cents party”, poorly paid Chinese students who, under the direction of “Information Departments,” are required to shower critics of China, dissidents, “splitists of the motherland” and “enemies of the people” with pre-fab propaganda, abuse and falsehoods.
Lynas is a household name in rare earth, not difficult to identify for these “professionals.” They use ages-old photos from Malaysian anti-Lynas protests, easy to find, so at least a bare minimum of homework has been done.
But why of all rare earth junior miners out there, these “professionals” pick the 2 other, most unlikely to succeed targets! Absolutely hilarious!
If someone pays for these smear jobs, he gets what he pays for, 50 cents.
The full report is here:
Pro-PRC DRAGONBRIDGE Influence Campaign Targets Rare Earths Mining Companies in Attempt to Thwart Rivalry to PRC Market Dominance
There are allegations, that the Baotou Steel’s price increase for RE concentrate to China Northern Rare Earth Group was leaked to institutional investors, who then of course began dumping China Northern Rare Earth stock and buying Baotou Steel stock, before the announcement to the market was made.
On June 23, due to suspected insider trading in related-party transactions, the Shanghai Stock Exchange issued an inquiry letter to the two, requesting self-inspection of whether the transaction disclosed insider information, and promptly providing the Exchange with a list of insiders with insider information.
Product price adjustment increases costs for the buyer, Northern Rare Earth, and increases profits for the seller, Baotou Steel. Therefore, the price increase information has a negative impact on the stock price of Northern Rare Earth.
Rare earth concentrate price adjustment suspected of insider trading
Since June 21, the stock price of Northern Rare Earth has fallen by 12.15% for two consecutive days without any abnormality at the operational level, and has been ruthlessly sold off by institutions. As the other party to the related transaction, Baotou Steel shares rose 16.67% for two consecutive days.
There have been rumors in the market that Baotou Steel intends to raise the price of rare earth concentrates sold by Northern Rare Earth to 40,000 yuan / ton, an increase of about 49%. In response to this rumor, Northern Rare Earth denied that "the news of the price increase on the Internet is inaccurate, and the company is also verifying it internally. If it is verified and confirmed, an announcement will be issued.”
Just a few hours after the denial, Baotou Steel Co., Ltd. and Northern Rare Earth facilitated an announcement after the market on June 22 that they would re-sign the "Rare Earth Concentrate Supply Contract". It is planned to start from July 1 this year. The transaction price is adjusted to 39,189 yuan/ton (dry volume, REO=50%) excluding tax. For every 1% increase or decrease in REO, the price excluding tax will increase or decrease 783.78 yuan/ton (dry volume). The total transaction volume of rare earth concentrates in 2022 The amount should not exceed 230,000 tons (dry amount, REO=50%). After the transaction price has been raised, it will have risen 46% from the level at the beginning of the year.
To sum up, although there is a slight deviation between the price increase rate and pricing and the data circulating in the market, the news of the price increase is confirmed.
Baotou Iron & Steel Group Co., Ltd.,
The holding company of all things Baotou and Bayan Obo.
Not stock market listed, owners:
People's Government of Inner Mongolia Autonomous Region 69.15%
China Huarong Asset Management Co., Ltd. 14.9992%
Inner Mongolia State-owned Capital Operation Co., Ltd. 7.6835%
China Cinda Asset Management Co., Ltd. 6.3836%
China Orient Asset Management Co., Ltd. 1.9364%
Inner Mongolia Baotou Steel Union Co., Ltd.,
The seller of rare earth raw material to China Northern Rare Earth.
Stock market listed company, has among its shareholders:
Baotou Iron & Steel Group Co., Ltd. 55.02%
China Northern Rare Earth (Group) High-Tech Co., Ltd., 0.58%
China Northern Rare Earth (Group) Hi-Tech Co., Ltd.
The buyer of rare earth raw materials from Inner Mongolia Baotou Steel Union Co., Ltd.
Stock market listed company, has among its shareholders:
Baotou Iron & Steel Group Co., Ltd. 36.66% (blocking minority)
You will not be surprised, if we tell you there is a number of Baosteel executives employed concurrently at China Northern Rare Earth and/or relevant subsidiaries, and vice-versa.
Insider trading is built into the system of state-ownership.
But it is already better than a some years ago, when the general managers of China Northern and deputy general manager of Baotou Steel settled the rare earth raw material price. Negotiations were tough: At that time these two positions were held by one and the same person.
World-class journalism at work
June 14 (Reuters) - (This June 14 story corrects to "largest" from "only" processor in second paragraph.)
Yes, because we would have hammered Reuters for that. The original, still available from other websites, says:
Lynas, the world's only processor of rare earths outside China, said it intends to combine the heavy rare rarths [earths] separation plant with its proposed light rare earth separation facility, which is half-funded by the Defense Production Act office of the U.S. Department of Defense.
The plant would be the first outside China that is able to separate heavy rare earths, Chief Executive Amanda Lacaze told Reuters in an interview.
Yes, perhaps a first, and definitely a first for Lynas. An investigative journalist could have immediately picked up on that statement. Lynas’ heavy rare earth concentrate “SEG” is currently shipped from Malaysia to China. In Q1 2022 China imported 1,133 mt of rare earth mix valued at US$24.5 mio from Malaysia. Go figure.
As far as is understood from previous company publications, lacking alternative operating mines, the Texas unit is to be fed from Lynas’ yet to be opened Mount Weld Duncan deposit instead of the currently mined Mount Weld Central Lanthanide Deposit (CLD), because Mount Weld Duncan has a higher heavy rare earth content:
Lynas is expected to have a ca. 5,000 t/year rare earth separation facility for ~1,130 t/year NdPr 75/25 in Carter, Hondo, 50 km west of San Antonio in Texas, near to Lynas’ partner Blue Line Corp’s facility.
Originally it was to be a light rare earth separation facility for which DoD contribute US$30 mio, and it is supposedly ready by 2025. The heavy rare earth processing is being attached for additional US$120 mio, rather than Lynas also shipping also this heavy rare earth concentrate to China.
At this capacity, based on the Mt Weld Duncan resource, the heavy rare earth output may be 38 t of Dysprosium oxide, 60 t of Gadolinium oxide, 13 t of Terbium oxide and 140 t of Yttrium oxide per year.
The Lynas Texas output will be just enough for 4,000 t/year of NdFeB magnets, if there will be any DoD-contractor who can make metals and manufacture some of the almost 50 types of NdFeB magnets for the Pentagon’s electric motors/equipment suppliers.
Lynas may help solve the Pentagon’s China dependency, but the rest of the potential market will still be up for grabs.
An investigative journalist would also have wondered, how this long-distance arrangement is supposed to work.
According to ports.com, the port-to-port distance from Lynas’ home port, Fremantle (Perth), WA, Australia, to Houston, Texas, USA is 14,519 nm or 26,889 km. The voyage will take more than 60 days at an average speed of 10 knots:
The distance to Port Corpus Christi is about the same. Fabulous carbon footprint, apart from the certainly substantial freight cost.
In terms of sustainability this looks somewhat less than perfect.
Such arrangement will inflate Lynas working capital requirements substantially. And all that in a rising interest rate environment.
Search Minerals NI43-101
Basically, Search Minerals have been active in the Labrador area for 13 years:
Search Minerals passed on a number of exploration licenses, such as Strange Lake, which they passed to Quest Rare Minerals, and the Red Wine Deposit, which they passed to Great Western Minerals. Both companies went belly-up afterwards.
Search Minerals focus on the Deep Fox/Foxtrott:
On June 7, 2022, Search Minerals published a NI43-101, which they say relates to the home-made preliminary economic assessment (PEA).
SLR Consulting, the authors of the NI43-101, say:
The purpose of this report is to disclose the results of a Mineral Resource estimate on the Project.
After more than 10 years of exploration no resource in the Measured category, only Indicated and Inferred. This is not suitable to determine the economic feasibility of a project in our opinion, but Search Minerals do it anyway:
Since Search Minerals choose to only look at 4 elements, even though they have got to separate almost all elements to get to these 4, we simply follow their assessment and see, if it holds water.
Here are fundamentals Search Minerals publish:
Based on the a.m. prices, Search Minerals project:
Typically, junior rare earth miners overestimate revenue and underestimate operating cost, to come to fantastic results.
This is the proportional rare earth oxide distribution in Deep Fox and Foxtrott:
Since Search Minerals chose to only calculate 4 rare earth oxides at rather ambitious price assumptions and probably an equally fantastic average recovery rate, we chose to do the calculation based on all elements with optimistic recovery rates:
Note that the Search Minerals NI43-101 only considers recovery rates from resource to mixed rare earth concentrate.
This is an optimistic assessment on the assumption that all REO are recoverable and there are no hidden flaws in the mineralisation.
This US$6.925 billion life of mine (LOM) revenue at current prices is a tad lower than the US$13.790 billion Search Minerals advertise. This amount also allows only a margin of US$675 mio over the advertised life of mine operating cost of US$6.250 billion, which then makes any return of investment a bit difficult.
The University of Birmingham has launched a pilot re-manufacturing plant for high-performance rare earth magnets
It is an important step towards opening the UK’s first full scale remanufacturing facility at Tyseley Energy Park, funded by UK Research and Innovation (UKRI), which is due for completion in 2023.
In the new facility, a 1,300-litre sealed drum will process up to 100kg of magnets per day. The resulting powder is de-magnetised during the process, so can be refined further before ‘sintering’, when the reclaimed materials are heated to form bars and remagnetised.
Initially the plant will recycle magnets taken from hard disk drives, which are removed using robotic disassembly techniques developed with EUROPEAN METAL RECYCLING LIMITED. The range of products that can be recycled will expand as the component disassembly processes develop further.
This is, what NdFeB magnets from HDD look like:
Demand of HDD for corporate/government data storage is growing because HDD are still cheaper than SSD. Demand for all other HDD market segments is declining.
Worldwide 260 million HDDs were sold in 2020 (2010: 651 million), each containing ca. 15.5 g of NdFeB magnets.
In other words, if one year worth of HDD world sales would be scrapped all at once the world over, it would result in ca. 4,000 t of NdFeB magnet scrap.
The UK facility’s capacity of 100 kgs magnets per day represents the NdFeB magnets in daily ca. 6,500 hard disk drives. 2022 there are 252 working days in the UK x 100 kgs = 25.2 metric tons of magnets per year - or the scrap of 1.6 mio HDDs.
If we take a N50M NdFeB magnet current price of US$61/kg (RMB 460/kg minus 13% China VAT fully refunded upon export, exchange rate of RMB 6.70/USD1) as reference, then the total production value of 25.2 tons would be US$1.54 mio per year, not considering in-process recovery losses.
Specification-wise there is no one-fits-all among the almost 50 different types of sintered NdFeB magnets. In order to meet the necessary types/specifications of NdFeB magnets, virgin rare earth metals may need to be used in addition.
Just one extreme example: The NdFeB magnet grade used in HDD does not support the maximum working temperature required for an electric vehicle motor. It will demagnetise rather quickly.
Energy Fuels fuselage takes flak.
According to the Environmental Protection Agency, since at least June 2020, the mill has been violating the Clean Air Act. One of the mill’s liquid waste pits is partly uncovered, exposing radioactive materials to the open air. The EPA estimated that 10 times the cancer-causing radon emissions are coming off the uncovered portion of the pit than the part that’s underwater.
This letter from EPA to Energy Fuels CEO Chalmers is, what is referred to:
When the mill opened in 1980, the then-owners said it would operate for about 15 years, then close and clean up. But by the 1990s, the mill was accepting radioactive waste from toxic cleanup sites across the country.
Now, the mill is getting into the rare earth element (REE) processing business more than 25 years after it was supposed to be gone. The mill is turning radioactive sands from Georgia into a mixed REE carbonate. This incomplete product must be shipped all the way to Estonia to be separated into individual elements that industries can actually use. The mill also claims to have done REE separation on site, and they hope to do much more.
This makeover of the mill is happening without any opportunity for residents to decide whether we think converting an old uranium mill into an REE plant is a good idea. The U.S. Department of Energy has given Energy Fuels money to subsidize this transformation, all without public scrutiny.
A notice from the US Environmental Protection Agency (EPA) is preventing the Energy Fuels White Mesa Mill from processing hazardous waste, due to what the agency reports as a lack of adequate liquid cover on one of their waste cells.
Energy Fuels says they were surprised with the letter from the EPA regional office, as they have submitted weekly reports to the agency regarding the covering in their cells since 2019.
The December 2 letter reversed the early determination from the EPA, which Energy Fuels says they were surprised by as they have been sending weekly reports, including nearly 600 photographs of the pond in question, since the 2019 visit.
The company says they had no prior visits or communication from the EPA regarding the issue and were surprised by the letter. They also state that safety is paramount to them. They are confident they can address the issue by pumping more water into the ponds, although they would rather not use additional water during a drought if the radon emitted is at a level that meets EPA standards.
It appears that Energy Fuels also provide a waste recycling service for the EPA Superfund sites (a.k.a. CERCLA) and that, according to the company, this is a minor part of Energy Fuels business. This is probably what Mr Maryboy refers to, when saying
But by the 1990s, the mill was accepting radioactive waste from toxic cleanup sites across the country.
Energy Fuels acquired La Mesa only in 2016.
One could suspect poor community relations and poor communication of the company, however, Mr Maryboy seems to be opposed to the very existence of La Mesa and the disposal site:
Now, the mill is getting into the rare earth element (REE) processing business more than 25 years after it was supposed to be gone.
La Mesa has been turning out waste and would continue turning out waste from its core business anyway and one would really wonder, how rare earth suddenly become a target for Mr Maryboy? Whether Thorium isotopes or Radon, undesirable hazardous waste remains undesirable hazardous waste. Period.
Best possible practise and lowest possible public health hazard should be the core objective, and certainly not, if the local community thinks processing of rare earth is “a good idea.”
There are these self-appointed advocates of US-minority rights from across the Pacific Ocean, who brutally oppress and forcefully assimilate minorities of their own.
Otherwise we can’t think of a beneficiary, if the Energy Fuels rare earth initiative should fail.
Energy Fuels is among the best bets of the US to re-establish domestic production of finished rare earth products, with the link to China-independent NdFeB permanent magnets still missing (MP Materials have a lot on their plate before they get anywhere near NdFeB production, USA Rare Earth have aging second hand NdFeB hardware but not the software, what Noveon a.k.a. Urban Mining have or do not have is unknown, and altogether they may face lack of heavy rare earths plus patent/licensing issues. The only somewhat “real” candidate for US NdFeB production at this time would be Germany’s Vacuumschmelze, in spite of its unsustainable operating losses through 2020).
Mr Maryboy is a seasoned, Democratic politician and apparently has done well for himself. There is some controversy about Mr Maryboy, according to a local activist website and Mr Maryboy’s Wikipedia entry.
There is no doubt that what was done to the Navajos in the not too distant past is plainly abhorrent, also in terms of radioactive waste, and they understandably harbour suspicions.
In principle it is good to constantly monitor and challenge polluting industries, to keep them on their toes and make them adhere to highest possible standards.
The apparent lack of coordination inside the EPA, however, is of deep concern. What is going on? Does the EPA support political agendas instead of doing its job?
And on the company’s side: No matter how minor, the above means Energy Fuels business is affected and shareholders could reasonably expect to be fully informed by the company, in our humble opinion, not only via third party media write-ups.
Hastings get rid of Cadence and imply this would increase resources… every opportunity for any nonsensical spin is exploited to the maximum…
Hastings to acquire Cadence Minerals Plc (Cadence) 30% interest in Yangibana JV tenements for A$9 million to be satisfied by the issue of fully paid ordinary Hastings shares.
Following the acquisition Hastings will have 100% interest across the entire Yangibana rare earth tenement package.
Acquisition includes 2.34Mt of Mineral Resources and 0.73Mt of Ore Reserves.
Acquisition adds one year of production to the Yangibana rare earth project, increasing the life of mine to 16 years.
Substantial opportunity and upside exists to increase the Mineral Resources within JV tenements which are only lightly explored.
Hastings keep advertising prices of products that they will not produce, but they never ever mention the daily published market price of the one and only product Hastings will produce: Mixed Rare Earth Carbonate. Go figure.
Hastings’ problem is similar to Search Minerals and many others: The return of investment is impossible, based on the current market conditions.
This is better than 5 years ago, but it is nowhere near commercial feasibility.
The company consolidates shares on a 20:1 ratio, after which shares outstanding will be 101.45 million.
George Bauk trying to emulate his former employer Northern Minerals?
PVW executive director George Bauk said: “We are absolutely delighted to have drilling underway in the Tanami, providing the first real test of the string of high-priority targets generated by our 2021 field program and historical data analysis.
“The Tanami Project has all the right ingredients to deliver a significant rare earths discovery – with the right stratigraphy and structures and with known occurrences of heavy rare earth mineralisation.
PVW’s Tanami deposit is just south of Northern Minerals’ smallish rare earth resource at Browns Range:
On the PVW website they say about Tanami:
Most recent exploration efforts in 2012 involved surface geochemical rock chip sampling at the Killi Killi East prospect, and RC drilling program at both Killi Killi East and Killi Killi West. Rock chip sampling of conglomerate lenses at Killi Killi East returned encouraging REE assays, delineated a strike length of more than 1km of REE anomalism with totaled REE assays averaging 4,730ppm TREE [0.473%]. While the drill REE assays were disappointing, gold mineralisation was intersected in 3 holes, with a best intercept of 16m @ 2.48g/t Au from 60m in KKO-116. In 2013 mapping investigated gold mineralisation in KKO-116 confirming drilling had intersected an outcropping shear zone.
Rare earth-wise it seems to be getting crowded in north-western Western Australia.
Quite a number deposits are being explored there, among them: John Galt and Browns Range (Northern Minerals), Brockman - dormant (Hastings), Cummins Range (RareX), Mt Mansbridge (Red Mountain).
Hallgarten are bullish on this early exploration company.
CAPROCK Group Inc. bought a new position in MP Materials Corp. in the first quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The fund bought 5,355 shares of the company’s stock, valued at approximately $307,000.
Shares of NYSE:MP opened at $35.72 on Friday. The company has a market capitalization of $6.34 billion, a PE ratio of 32.77, a price-to-earnings-growth ratio of 1.33 and a beta of 3.39. The company has a debt-to-equity ratio of 0.62, a current ratio of 25.52 and a quick ratio of 24.76. The business has a fifty day moving average price of $38.14 and a two-hundred day moving average price of $42.64. MP Materials Corp. has a 1 year low of $28.85 and a 1 year high of $60.19.
MP’s P/E of 32 is pretty high nowadays, considering that mining giants’ P/E are at single digits, however, compared to real rare earth producers like Lynas (30) or Shenghe Resources (26), MP is within the ballpark.
MP results in Q2 may disappoint owing to maintenance at Mountain Pass.
Iluka turn ever more into a resource holding company.
The demerger will result in two independent ASX-listed companies. Iluka will continue to be a leading global supplier of critical minerals. Sierra Rutile will be a West African focused mineral sands producer and developer, with principal business activities including the operation of its existing Area 1 mine; and progressing the development of the globally significant Sembehun project.
Iluka shareholders will have the opportunity to vote on the demerger at a meeting on 22 July 2022. If the demerger proceeds, eligible shareholders will be entitled to receive one share in Sierra Rutile for every Iluka share held at the demerger record date (5.00pm AWST 28 July 2022).
In 2020 Iluka already demerged its royalty business Deterra. A bit of a rocky ride thereafter:
Iluka’s shareholders fared better:
Iluka is pleased to announce it has awarded Fluor Australia (Fluor) the contract to complete the Front End Engineering Design (FEED) and undertake Engineering, Procurement and Construction Management (EPCM) services for the Eneabba rare earths refinery.
Fluor’s Perth, Australia office will lead the project. Construction of the refinery is scheduled to begin later this year with first production expected in 2025.
Price development since the MIIT price intervention beginning of March we posted above already.
Expect some inconsistencies in price development.
Like every year during the rainy season it actually rains in China and that rain always comes as a complete surprise.
Every year the same drama.
Rare earth areas in South China, particularly Ganzhou, are hard hit, but we have no intel yet what this means in terms of rare earth production.
As ever, these are ex works China prices incl. 13% VAT for the most common qualities of rare earth oxides/metals and their raw materials, converted at the official onshore RMB/USD exchange rate. Actual offer prices will differ.
Thanks for reading and have a great rest of the week!