U.S. tariffs on China RE-magnets, EV; IAC leaching; Neo's quarterly; Tantalus Odyssee continues; New EPD/LCA platform in China; Appia, Meteoric, Hastings, Harena, Victory, et al

Rare Earth 16 May 2024 #148

May 16, 2024

∙ Paid

U.S. Trade Representative Katherine Tai told Morning Edition that China heavily subsidizes its electric vehicle industry, leading to prices so low that American manufacturers could "really be crushed by what has been produced by these anti-competitive practices in Beijing."
Some increases will take place this year. They include tariffs of:
100% on electric vehicles, up from 25%
50% on solar cells, up from 25%
50% on syringes and needles, up from zero
25% on lithium-ion batteries for electric vehicles, and battery parts, up from 7.5%
25% on certain critical minerals, up from zero
25% on steel and aluminum products, up from a range of zero to 7.5%
25% on respirators and face masks, up from zero to 7.5%
25% on cranes used to unload container ships, up from 0%
Other hikes will be phased in, including:
50% on semiconductors, up from 25%, by 2025
25% on other lithium-ion batteries, by 2026
25% on natural graphite and permanent magnets, up from zero, by 2026
25% on rubber medical and surgical gloves, up from 7.5%, by 2026
China's commerce ministry said Beijing "firmly opposes" the decision, and said the review process had been "abused" for domestic political reasons. "China expresses its strong dissatisfaction," it said.

Certain critical minerals include rare earth?

Trade Representative Katherine Tai said:

Next week, I expect to issue a public notice that conveys the specific tariff lines, tariff rates, and timing for the proposed increases, along with the details of the machinery exclusions process.

Meanwhile, Bill Bishop posted this:

It is better to wait for the official list next week.

On this occasion we would like to remind everyone of these immortal lines of David Henderson at the 19th International Rare Earth Conference in Kuala Lumpur 5 years ago:

You can always count on Americans to do the right thing - after they’ve tried everything else.

Rare earth EPD platform launched in Beijing

EPD (Environmental Product Declaration) is a scientific, comparable, and internationally recognized disclosure of the entire life cycle of a product or service, from raw material acquisition to final disposal, based on life cycle assessment (LCA) and verified by a third party. The environmental impact information is an internationally recognised "green ID card". The rare earth EPD platform will provide a reliable path for China's rare earth industry chain enterprises to actively integrate into green international trade, achieve international mutual recognition of the environmental performance of China's rare earth products, and enhance the green competitiveness of rare earth products. At the same time, it will provide a reliable path for the green and low-carbon development and green transformation of China’s rare earth industry.
Leaders from relevant departments of China Iron and Steel Industry Association, China Rare Earth Association, relevant departments of the autonomous region and Baotou City, as well as heads of some universities, scientific research institutes and rare earth enterprises participated.

Interesting move in response to the EU Carbon Border Adjustment Mechanism (CBAM), which stipulates EPD (Type III environmental declaration) as a market access condition. China chooses the group approach rather than to let everyone fend for themselves.

If you can stand wading through it, here is the manual for the EU CBAM entry.

Here is a China website for rare earth EPD administration, but it is as slow as Japanese miso soup. It requires user credentials.

Applicable general standards:

ISO 14025 (GB/T 24025-2009) : international standard for everything regarding EPD
ISO 14040/14044: the international standard for life cycle assessment (LCA)
ISO 14067: Calculation of carbon footprint

Plus standards specific to individual product groups.

Observation and questions:

Our research indicates, that China Rare Earth Group may be good for 80% of China’s rare earth export value. We don’t see China Rare Earth Group among the EPD registrants/sponsors.
We note that the Chinese EPD cycle starts from raw material acquisition. How will they go about rare earths from Myanmar, Laos and Kazakhstan/Russia? Monazite from Nigeria, DR Congo and Brazil? Bastnaesite from USA? Will suppliers in these countries be compelled to file, so to have a complete EPD?
Or will EPD only apply to China domestic mined, domestic produced, to hell with the rest?

Hilarious

The Latest Environmental Shrieking - We're Gonna Run Out Of Rock

I do keep a wary eye on the wilder environmental loons simply because they fascinate me. The ability to believe entire gargling nonsense is strong in the sector - as with this particular claim that we’re going to run out of rock. Therefore we should all be poor right now.
Some environmental claims are not just perfectly valid they’re essential for the continuation of life at any level above E. Coli.
But some of these claims are wholly and entirely doolally. So much so that it’s difficult to imagine that grown adults take them seriously.

This post of Tim Worstall’s blog is thoroughly read-worthy for all rare-earthlings. It goes about the “fruitloop doolally” which is the result of detachment from reailty.

Myanmar’s Power Grid Meeting Half of Country’s Needs Amid Conflict: Junta

Myanmar’s electricity grid is producing only 2,800 megawatts of the required 5,443 MW needed each day, according to a statement from the electricity authority released by the junta’s information team late Wednesday.
Domestic power production from natural gas was about 446 MW less than the normal daily capacity, and low rainfall had led to a daily shortfall of around 350 MW from hydropower sources, it said.
Exports of natural gas to China and Thailand are a major source of foreign currency for the cash-strapped junta, earning almost US$300 million per month, according to the World Bank.
The junta also blamed attacks by its opponents for the shortfall in domestic power production.

Ion adsorption clay mining

Under Media Blackout, the Hidden Devastation of Myanmar’s Environment

Suffering most amid the hottest days of their lives are the 2.8 million displaced residents who have abandoned their homes due to the fighting.
Lakes and wells have dried up. Accessing water has become a serious challenge. And rising sea levels in coastal regions are causing salination that is destroying crops and other food sources.
The largely unregulated logging and mining sectors are driving mass deforestation and contamination of water resources near sites extracting gold, jade and other minerals.
The main blame lies with the junta, which has neglected its duty to oversee these extraction projects while favoring military-backed companies when it comes to mining concessions.

Ion adsorption clay leaching

For in-situ leaching of ion-adsorption-clay-hosted rare earth, a 5-10% ammonium sulphate solution is injected directly into the ore layers underground to leach out the rare earth contents. No matter how professionally applied, inevitably the leaching solution will enter surface and ground water.

Irreparable ammonia pollution is the result. All life in surface water is exterminated and the ground water is also no longer fit for human consumption.

What is ammonium sulphate?

In measures, ammonium sulphate (“Amsul”) is harmless. It is (NH4)2SO4, largely containing 21% nitrogen and 24% sulphur. Diluted in water it is used as a cheap nitrogen fertiliser.

But, as almost every substance, too much of it is harmful.

Ammonium sulfate is produced as a byproduct from the caprolactam oxidation process for polyamide 6 - a.k.a. “Nylon 6”. This Amsul is typically referred to as “caprolactam grade”.

Coke oven byproduct ammonium sulfate is produced by reacting the ammonia recovered from coke oven offgas with sulfuric acid, commonly referred to as “steel grade”.

Synthetic ammonium sulfate is produced by combining anhydrous ammonia and sulphuric acid in a reactor.

Sudden popularity of Amsul in Myanmar

Imports of Amsul from China increased almost 16 times between 2015 and 2023:

Agricultural use of Amsul in Myanmar

While we did see much lower numbers, a yearly consumption of Amsul for fertiliser application in Myanmar is generally estimated as 100,000 t per year.

That would mean the remainder of the imported Amsul could well be for ion-adsorption clay mining use.

If we then ignore elements like inventory and the factor time, then 1.35 million tons of Amsul in 13.5 million litres of watery solution may have been injected into Myanmar’s Kachin State’s soil for leaching rare earth in 2023 alone.

Only a fool could possibly assume that even a fraction of this would be without severe environmental consequence.

Mining cost competitiveness

Not all IAC deposits were created equal and at various stages of exploitation different quantities of Amsul solution may be injected.

According to several of our sources, by and large usage of 10 t Amsul per ton of end-product mixed rare earth carbonate >90% TREO is deemed cost-competitive in South East Asia.

But in terms of Myanmar on prima facis evidence we are tempted to believe that the consumption there may well be as high as 20 t of Amsul per ton of rare earth.

Consequences

Considering the ongoing environmental degradation, water resources poisoning and human misery brought about by rare earth mining in Myanmar’s Kachin State, while enriching warlords, their political allies and Chinese operators, at this time rare earths mined in Myanmar are neither sustainably produced nor are they in any way environmentally benign.

Perhaps certain rare earth permanent magnet hopefuls should consider this in their “ex China” sourcing strategy.

Also automakers should start paying attention, before consumers do. Environmentalist boycotts can be so harmful to automotive sales.

And governments should consider if wind turbines produced at such an environmental cost are even worth it.

Malaysia

State Govts urged to include public inquiry in forestry enactments

On the alleged illegal extraction of rare earth oxide in the forest reserve in Lipis, Pahang, Nik Nazmi said the ministry is constantly communicating with the state government regarding the issue.
“We are communicating not only with the Pahang government but with all state governments on the guidelines for proper rare earth elements mining, followed by discussions involving Economy Ministry, Investment, Trade and Industry Ministry and Science, Technology and Innovation Ministry,” he said.
Pahang Menteri Besar Datuk Seri Wan Rosdy Wan Ismail has vehemently denied the accusation, saying that the statement by Nik Nazmi in response to a question raised by Ipoh Timur MP Lee Chuan How in Parliament on March 12 was inaccurate because there were no rare earth oxide extraction activities in Lipis.

Malaysian politicians show a tendency of embracing alternative fact.

Afghanistan plans to cooperate with Russia on mining of rare earth metals — minister

Afghanistan plans to cooperate with Russia on mining of rare earth metals and expects investments from Russian companies, Nooruddin Azizi, acting Industry and Trade Minister in the provisional government of the radical movement Taliban (banned in Russia) said.
The 15th International Economic Forum "Russia - Islamic World: KazanForum 2024" is being held on May 14-19 in Kazan. This year's keynote is "Trust and Cooperation." The main goal of the forum is to strengthen trade and economic, scientific and technical, social and cultural ties between Russian regions and the countries of the Organization of Islamic Cooperation (OIC), as well as to promote the development of the Islamic financial system institutions in Russia.

and

Uzbekistan to build rare and rare earth metals plant

In addition, the head of the Ministry of Geology emphasized the importance of developing the direction of rare and rare earth metals – including lithium – for which global demand is growing every year and there is a good price environment.
In early April, Uzbekistan and the European Union signed a memorandum of understanding in the field of critical raw materials. The parties want to diversify supplies for the transition to “green” technologies.
Uzbekistan intends to form projects on rare earth materials worth $500 million. The President also ordered to reduce the cost of production at NMMC by 10-15%, as well as expand localization and industrial cooperation.

Neither the Uzbeks nor the Afghans seem to have the even remotest idea what they are talking about.

National Interest

Russia's Sierra-Class Titanium Submarine: The Navy Has Nothing Like It

In the case of production materials, such as titanium, there is today a race among the three great powers (the United States, China, and Russia) for dominance of critical materials, notably Rare Earth Metals. Titanium is among those Rare Earth Metals. Russia is a commodities superpower and always has been (which is one reason they were even able to reliably build the Sierra-class submarines).

Pompously presented falsehood.

If money would not matter, he could also try to build a submarine from magnesium-yttrium alloy. Something new and innovative, instead of mimicking 1980s Soviet know-how.

And it would really contain rare earth…

On Alaska Mining Day, Peltola Loosens Mining Restrictions

Current law, dictated by the United States Court of Appeals for the Ninth Circuit in May 2022, requires discovery and determination of valid mineral deposits before operations over a specific mining claim can receive approval. Rep. Peltola’s bill deems the added step of mandating operators to prove the existence of a commercially developable deposit on a claim unnecessary. If the court’s decision were to be maintained, hardrock mining projects across mineral-rich states such as Alaska, Arizona, Nevada, Montana, and Idaho among others will be threatened.

Operators must prove feasibility to investors anyway.

India

KABIL gets new office in Delhi to speed up efforts for securing critical minerals

Secretary, Ministry of Mines, V L Kantha Rao on Saturday inaugurated the Registered Office of Khanij Bidesh India Ltd (KABIL) at Sansad Marg to speed up the country's efforts to secure stable supplies of critical minerals such as lithium and cobalt used as raw materials to manufacture electric vehicles, smartphones and hi-tech defence equipment.
KABIL, a Joint Venture Company formed by NALCO, HCL and MECL, Central public sector enterprises under the Ministry of Mines, is entrusted with the important mission of identifying, exploring, acquiring, and developing critical and strategic mineral assets overseas.

How does a new office contribute to the “speed up of the country’s efforts”?

The civil servants at Kabil don’t understand that their government-to-government efforts are unlikely to produce tangible results.

As long as Kabil don’t start interacting with miners, private or stock-listed, its civil servants will underachieve, mildly put.

Critical Minerals Africa Summit to Profile Africa’s Investment Outlook

Sub-Saharan Africa is estimated to hold 30% of the world’s critical minerals reserves – including deposits of lithium, cobalt and copper, which are crucial for the fourth industrial revolution – presenting massive opportunities for global partnership and investment. The panel – titled, Investing in African Critical Minerals in a Competitive Environment – will explore best practices for attracting buyers and fortifying Africa’s critical mineral value chain amid fierce global competition.
Organized by Energy Capital & Power, CMA is the largest dedicated gathering of critical minerals stakeholders in Africa. Taking place on November 6–7 in Cape Town, the event positions Africa as the primary investment destination for critical minerals.

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