US RE Compounds Import Down 46%; Pre-Holiday Prices Stable; Recycling Of RE Gets Big; RE Scare Mongering; The Magic One-Fits-All Process;

2021 Rare Earth February 4

Chinese New Year

2020 was the Year of the Rat, and boy, what a rat it was.

From February 11 to February 17 there are official national Chinese New Year holidays in China.

Singapore will close only February 11 and 12. Baring earth shattering events, we’ll be off, too.

On February 12 the Year of the Ox begins, concretely, the year of the Metal Ox! Or a metal bull year, if you so will.

Happy New Year of the Metal Ox!

The USGS rare earth assessment 2021 has been published:

  • Imports 2020 down 46% to 6,700 t

  • Exports 2020 of ores and compounds up 26% to 38,000 t

  • Apparent 2020 US consumption down ⅓ to 7,800 t

  • Global mine production 2020 up 8% to 240,000 t as REO

Prices hold firm, also thanks to a weak US$ NdPr median price is now above US$70/kg ex works China.

Contrary to some people’s expectation, the Myanmar military coup to overturn democratic election results did nothing to boost offical rare earth prices, but shares of Chinese rare earth companies did jump.

China’s relations to the civilian government of Myanmar had been lukewarm at best, so at the emergency meeting of the UN Security Council for the Myanmar coup China and Russia asked for a delay, before a UNSC joint declaration on Myanmar. “The enemy of my enemy is my friend.”

NdFeB magnet raw materials, mind the short time span between Feb 1 and Feb 4:

China rare earth oxide supply structure 2020, according to Anxin Securities Research:

  • 44% through the domestic rare earth groups (Big 6) plus

  • 28% through import of raw material from overseas mines

  • 28% through recycling.

The large share of recycling ratio consists mostly of recycling of permanent magnets.

And recycled rare earth oxides will become even bigger.

While you are reading this, Ganzhou Huahong Rare Earth New Materials Co., Ltd. is being established with a processing capacity of 60,000 t/year of magnetic scrap. At capacity, that would be a potential output of 20,000 t of rare earth oxides neodymium, praseodymium, dysprosium and terbium.

That is quite impressive.

Ganzhou Huahong Rare Earth New Materials Co., Ltd. shareholders will be:

  • 45% Jiangsu Huahong Technology Co., Ltd.

  • 28% Ganzhou Zeyu Management Consulting Co., Ltd. 

  • 17% Ganzhou Huayi Management Consulting Co., Ltd.

  • 10% China Southern Rare Earth Group Co., Ltd. 

Registered capital is RMB 120 mio (~US$18.7 mio), which seems a bit tight, considering size.

Jiangsu Huahong Technology Co., Ltd. is listed on the Shenzhen Stock Exchange as 002645 with a market cap of currently RMB 5.7 billion (~US$885 mio).

Jiangsu Huahong’s subsidiaries include:

  • Jiangsu WELM, an elevator parts manufacturer in Nantong, Jiangsu

  • Jiangsu Naxin Heavy Industry Machinery in Jiangyin, Jiangsu, manufactures garbage, scrap handling and recycling machinery

  • Beijing Huahong Renewable Resources Utilization Co in Beijing, dismantling and scrapping of industrial and military equipment and related machinery, as well as vehicle scrap.

  • Ji’An Xintai Technology, acquired March 24, 2020, a recycler with two factories in Ji’An and Jishui with a combined capacity of 11,000 t/year of NdFeB waste to turn out ca. 3,000 tons of rare earth oxides annually. Huahong raised RMB 318 mio (~US$ 50 mio) through a private placement to partly pay for the RMB 400 mio (~US$62 mio) acquisition.

40% of Jiangsu Huahong is in the private hands of the Hu family from Jiangyin, Jiangsu, (location of one of Neo Performance Material’s factories).

Ultimate controller of Huahong is Mr Hu Shiyong 胡士勇. Mr Hu’s company is said to be member of China Scrap Steel Application Association, China Material Recycling Association, China Renewable Resources Recycling Association, China Circular Economy Association, Institute of Scrap Recycling Industries and Bureau of Middle East Recycling (BMR).

The two shareholders of recycler Ganzhou Huahong with a total of 45%, Huayi Management Consulting and Zeyu Management Consulting, were both set up in Ganzhou in late October 2020 on 2 consecutive days, and are both controlled by a Pan Yiping and a Huang Dehui. We did not check, in which way these persons are related to this project and what the remaining background is.

Mr Hu’s company covers the resource chain starting from his scrap yards, where he obviously expects more and more EV to turn up, plus other equipment containing permanent magnets.

The location in Ganzhou is good in terms of rare earth expertise being available there.

We are not sure, if there will be enough magnet srcap to run the new site at capacity, but anyway in China most investments in raw materials are forward-looking.

Radio Free Asia joined the crowd of China rare earth scaremongers with this article on January 29: China Raises Threat Level Over Rare Earths. Peppered with falsehoods and salted with quotes from China’s supreme English language warmonger Global Times.

The government has yet to publish its list of controlled items under the new law, but it is expected to include categories covered by the U.S. Commerce Department's Control List and the U.S. Munitions List, an online posting by the White & Case law firm said. [incorrect: For items like rare earth the law refers to export control lists of 20 years ago]

The export control law may give China a new opening to restrict rare earth exports under a national security exception to World Trade Organization rules against restraints on free trade.

Whatever they smoke at White & Case, we’ll have none of it, because:

Since when do we assume, that the PRC government requires or has ever required laws and regulations to act?

But whatever the reason given for the controls, China has made no mystery of its motives for restricting REE exports.

On its web page, the Global Times cited earlier reports describing the new law as a "deterrent," a "bargaining chip" and a "tool of reprisal" against the United States.

Global Times editor Hu Xijin is China’s prime English language warmonger, China’s Steve Bannon. He apparently has been called to order by the ultimate controllers several times. Hu and his media outlet are about as authoritative a source on China’s policies as Breitbart is on US policy.

Stopping RE exports is not a tool of reprisal but a shot in the foot, actually in both feet, and that with an elephant rifle.

Thanks for reading, have a joyful and healthy rest of the week!


NIO Shareholders Are 'Dealing With The Devil'

I found it very surprising that investment bank analysts are bullish on a company that was bailed out by the Chinese government not even a year ago (more about that in RISK 2), that sold just 43,728 vehicles in 2020, burned $7.5 billion since inception, will keep burning much more cash over the coming years, is operating in a highly cyclical, cut throat margin industry heavily depending on fast changing customer preferences and on top of it all has a market capitalization of $90 billion. That is $2,058,177 per car sold in 2020.

Comment: This is the type of customer, junior rare earth miners must build their forecasts on.


Unlocking the power of a molecule’s spin

Graduate student Yanze Wu and professor Joseph Subotnik describe in Nature Communications how a molecule’s spin can be used to control a chemical reaction. Based on this concept, future experiments conducted through the Center for Sustainable Separations of Metals (CSSM) could help researchers develop more energy-efficient ways to purify and recycle scarce materials such as rare earth metals.

3D-printed microbes open door to enhanced performance of biomaterials

Lawrence Livermore National Laboratory scientists have developed a new method for 3D printing living microbes in controlled patterns, expanding the potential for using engineered bacteria to recover rare-earth metals, clean wastewater, detect uranium and more.


USA Rare Earth hopes to raise up to $500m in IPO

USA Rare Earth, a private company with ambitious plans for a domestic rare earths supply chain has hired bankers to explore going public in a deal that could value the strategic minerals company at more than $1 billion, according to a source familiar with the matter and documents seen by Reuters.

The company, which is developing the Round Top rare earths deposit in Texas, is considering an initial public offering (IPO) or going public via a special purpose acquisition company (SPAC), though it does not plan to issue debt, according to the source and documents.

Comment: US$500 mio for Round Top (hard rock TREO 0.063%)? Stunning. George Carlin comes to mind.

eMetals Announces Acquisition of Cowalinya Ionic Rare Earth Project

eMetals Limited (ASX:EMT) are pleased to announce the acquisition of three new mineral exploration projects including the highly prospective Cowalinya Ionic Rare Earth Project (Cowalinya Project) located 100 kilometres south east of Norseman, Western Australia.

A total of seventeen aircore holes were drilled within the Cowalinya Project tenure, along the few established roads. These holes were not comprehensively sampled for REE’s, with only one end of hole sample submitted for full characterisation. Within the project, six EOH samples returned results of >400ppm TREO with the maximum result of 1,380pp (0.13%) TREO. 

Hull proposed for rare earths processing plant

Pensana Rare Earths has submitted a planning application for the $125m facility, which would create 100 direct jobs. The company would produce rare earth oxides, which are used to manufacture the powerful magnets that drive the motors of offshore wind turbines and electric vehicles.

The plant in Hull will process neodymium and praseodymium from a proposed mine in Angola. Pensana hopes to attract manufacturers of turbines and cars by providing a more expensive but ecologically sound alternative to Chinese suppliers of rare earths and their oxides, Mr Atherley said. 

However, rare earth processing produces toxic waste and environmental groups could oppose the Hull plant.

Mr Atherley has been defeated by environmental activists before. In 2019, he quit as chief executive of Berkeley Energia, which has faced years of delays in seeking approval for an opencast uranium mine in Spain.

Comment: ‘More expensive’ tells us, that the feasibility study may be arriving soon. In terms of ‘ecologically sound’ and in terms of REIA sustainability aspirations it would be really important to understand, how Pensana want to handle the thorium issue of Longonjo.

RareX Executes Landmark MoU with Global Rare Earths Producer Shenghe Resources

  • Non-binding MoU executed with US$4.6B global rare earths producer, Shenghe Resources.

  • Establishes the framework for the formation of a jointly-owned [51% Shenghe] Rare Earths Trading Company sourcing rare earths concentrates globally (ex-China).

  • Potential for Shenghe investment in RareX’s flagship Cummins Range Rare Earths Project.

  • Potential for joint investment by RareX and Shenghe in existing or proposed rare earth refineries located outside of China.

IREL bags Odisha State Export Award for the years 2017-18 and 2018-19

CGM & Head, OSCOM received the award on behalf of IREL. During the event, Director, Export Promotion & Marketing announced that IREL has maintained a sustained growth in the exports for the preceding two years by exporting their products valued at more than Rs 200 crore in 2017-18 and Rs 350 crore in 2018-19.

Ucore Provides Update on RapidSX(TM) Technology for Near-Term Commercial Rare-Earth Elements Separation in USA

IMC's proprietary RapidSX technology is being commercialized for the intended cost-effective bulk separation and purification of rare-earth elements ("REEs") - including both heavy REEs ("HREEs") and light REEs ("LREEs") - for the production of REE oxides ("REOs"), in addition to other critical metals, such as lithium ("Li"), nickel ("Ni"), and cobalt ("Co") for lithium-ion battery materials.

Commissioning of the RapidSX demonstration-scale pilot plant ("RapidSXDemonstration Plant") is scheduled to start in Q3 2021 with a comprehensive, independent techno-economic study and the design of a commercial-scale REE separation facility, both planned for completion in Q1 2022. With the anticipated ability to demonstrate the effectiveness of the RapidSX Demonstration Plant on REE feedstocks, IMC expects RapidSX to be ready for commercial adoption and implementation in approximately 15 months from now, via revenue-producing licensing agreements with IMC customers.

Additionally, the critical data derived from the RapidSX development program will be incorporated into the ongoing development of Ucore's planned Alaska Strategic Metals Complex ("Alaska SMC") in Southeast Alaska.

Comment: According to IMC’s archived website, about 10 years ago the founders of IMC apparently obtained a supposedly “one-fits-all” process from China (Changchun Institute for Applied Chemistry?) for light and heavy rare earth from whatever source material, cheaper than any known process, feeding IMC’s vision of becoming a central separation provider to the rare earth industry.

Source: Archived Innovation Metals website

2014 Technology Metals Research LLC (established 2010 by Jack Lifton and Gareth Hatch, co-owner of IMC, were subcontracted part of a US$ 1.8 mio DoD contract with WPI to evaluate RE separation processes worldwide, including IMC’s. We don’t know the outcome, but as of June 2020 the IMC process was apparently still under development.

2016 IMC announced, that they had managed to separate light rare earth NdPr from the ionic clay heavy rare earth deposit Serra Verde, using their process. In terms of process validation, particularly based on a ionic clay heavy rare earth raw material, this is a bit disappointing, as we would have rather expected to see successful separation of heavy rare earth, like dysprosium or gadolinium.

April 2020 IMC owners sold out to Ucore for a fistful of dollars and 45 mio Ucore shares.

IMC now say, that their process is patent pending.

Source: YouTube