Vietnam bans transit of monazite; Lots of politics; Rare earths are not commodities; POSCO's risky gambit; RE in Zambia; Ramaco's fallacy; BRE's 3-hole hype; Ionic fight on; PRE copy from GITI.
Avid readers of this humble blog may recall that there is a distinct connection between China’s real estate market and the rare earth market.
Our fellow substackers China Real Charts collected a number of relevant statistics regarding China’s real estate market and commented on them. Check it out.
In spite of the Great Fearless Leader postulating that apartments are to be lived in and are not for speculation, most rules and regulations designed to rein in on runaway home prices have been removed, in some places all of them, re-enabling speculation.
So, the re-flation of China’s real estate market is only a matter of time.
Circular No. 05/2024/TT-BCT dated March 29, 2024 of the Ministry of Industry and Trade regulating the temporary suspension of temporary import and re-export of Monazite ore and concentrate.
According to this Circular, Monazite ore and concentrate products will be temporarily suspended for temporary import and re-export in the period from May 13, 2024 to December 31, 2027.
The target of this regulation is the temporary import and re-export of Russian Krasnoufimsk Monazite to and from Vietnam, which we reported about in detail in aforementioned post.
Circular of 7 Chinese central government departments
As seasoned rare-earthlings know from experience, “guiding opinions” are nothing short of being compulsory instructions in China.
Under “main goals” it says:
By 2035, the endogenous power of green development in the manufacturing industry will have been significantly enhanced, carbon emissions will steadily decrease after peaking [the Chinese government promised to peak carbon dioxide emissions by 2030 and strives to achieve carbon neutralization by 2060], carbon neutrality capabilities will steadily improve, green and low-carbon competitive advantages in the global industrial chain and supply chain will be highlighted, and green development will become a new universal type of industrialisation.
and under “implementation” it says:
Deepen international cooperation. Utilize existing bilateral and multilateral mechanisms to strengthen exchanges and docking of green development strategies, plans, policies, standards and conformity assessments. Deepen exchanges and cooperation with other countries ingreen technology, green products, green equipment, green services, and product carbon footprint management, promote the orderly export of my country's new energy, new energy vehicles, green environmental protection and other technical equipment, and encourage domestically qualified. We will build Sino-foreign cooperative green industrial parks in various places and make China’s contribution to global green development.
China’s technology boycott
In January 2023 China made publicly known its intention and in December 2023 China implemented the negative list of not sharing technologies that we view as vital for “green development.”
We have difficulty seeing what the base of “international cooperation” with China should be under such pretext.
China’s Ministry of Water Resources has marshalled resources for a large-scale drought response in the southwestern provinces of Yunnan and Sichuan while advising other regions to monitor their situations closely, raising worries over the impact of extreme weather on this year’s grain, hydropower and aluminium production.
Sichuan and Yunnan, the country’s top two provinces for hydroelectric power generation, have had to contend with consecutive summer droughts – most notably in 2022, when blackouts followed prolonged shortages – and analysts said the present conditions could further disrupt activity.
This is serious. Also part of China’s north depends on southern China’s water. The decade-long and ongoing South-to-North Water Diversion Project is meant to address chronic water shortages in the north of China.
We don’t need to tell you that electricity and water are essential to rare earth production, and that people’s livelihood comes first.
Australia announced this month that it will back a second large rare-earth project, providing a loan of 840 million Australian dollars ($550 million) to the Australian miner Arafura to build a mine and processing facility in the Northern Territory. The loan, provided largely by the government's Critical Minerals Facility, comes two years after another miner, Iluka, was given AU$1.25 billion to build a rare-earth processing plant in Western Australia.
The Iluka project is already expected to exceed its originally forecast cost of AU$1 billion to AU$1.2 billion. Estimates are now in the range of AU$1.7 billion to AU$1.8 billion. Chief executive Tom O'Leary said in February that Iluka was in talks with the government about "a pathway to deliver the refinery."
Dylan Kelly, a mining analyst for Terra Capital who focuses on critical minerals, said there is an "extremely low" chance of either project meeting its proposed budget or time frame.
"When combined with the prevailing price for the commodity, there is no economic case to warrant investment," he said, contrasting the situation with that of Lynas a decade ago.
Commodity hype
First of all and very, very importantly, rare earths are not commoditiesoutside China:
Commodities are typically standardised in quality and quantity ❌
Commodities are traded on exchanges and markets ❌
Commodity prices are influenced by supply and demand dynamics ❌
Rare earth finished products outside China are not standardised, they are not traded on exchanges/markets and their prices are determined exclusively by theoretical, synthetic Chinese published prices. The reality is that most customers pay quite different prices than the published ones.
Rare earth vaults
More than ten years ago certain companies in Europe peddled rare earth as a physical investment to individuals, saying they would put the relevant rare earth product in a vault on behalf of the investor. These physical rare earth investors had to find out the hard way that rare earths are not commodities, as they found them unsaleable.
Specialty chemicals
Principal rare earth consumers outside China have their own specifications, detached from China’s industrial standards. Try and take a long position in dysprosium or neodymium oxide and then sell to someone, anyone at all. Which one of the several grades will you take a long position in? And, more importantly, who will you be able to sell to? Some ignorant upstart wannabe rare earth trader will be your best hope.
Misunderstood NdPr
The much hyped NdPr: Which NdPr? The Chinese standard knows four different types. Then, in what form? Oxide, chloride, fluoride, or even metal alloy? Spoiler: The customer-prescribed composition of the two rare earths may not fit your natural product. One may need to create it artificially by manufacturing an alloy of separated neodymium and separated praseodymium in order to meet the chemical specifications of a potential customer.
Three hints for aspiring rare earth compound producers:
If Pr in NdPr exceeds 30%, it affects the quality of the resulting magnet.
If you produce unseparated NdPr, you have only one target application, NdFeB magnets. If the NdFeB market goes flat, so do you.
If you separate Nd and Pr, you have a wide number of applications you can sell to. That is, why Lynas did not rest on their NdPr laurels and worked until they could separate Nd and Pr.
Watch the patent space! Once you start production you, your customers or both may get hit by massive patent law-suits - from an entirely unexpected direction, by the way.
You are best served if you view rare earth compounds as specialty chemicals. That will give you a better grip on and understanding of your market.
The article cites Professor Klinger, an outstanding authority of all things rare earth:
"I think there's a sense now that if you want to build yourself into any kind of superpower, including a renewable energy superpower, that is a matter of major public investment," Klinger said.
In recent years, overseas espionage and intelligence agencies have used investigation and consulting activities as a cover to circumvent relevant laws and regulations and regulatory systems for important and sensitive industries in an attempt to steal confidential information in key areas of China, posing major risks to China's national security.
The illegal investigation activities of this overseas investigation and consulting company have long been on our radar. The national security agency decisively attacked at the critical moment, promptly blocked the leakage channels of our core data, and learned that this investigation and consulting company stole our national secrets under the instruction of overseas spy intelligence agencies. strong evidence and safeguarded national security in accordance with the law.
——The "Measures for the Administration of Foreign-Related Investigations" promulgated by the National Bureau of Statistics stipulates that foreign-related market surveys must be conducted through foreign-related investigation agencies, and foreign-related social surveys must be conducted through foreign-related investigation agencies after approval.
Overseas organizations and individuals are not allowed to directly conduct market surveys and social surveys within the country, nor are they allowed to conduct market surveys and social surveys through institutions that have not obtained a foreign-related survey license.
Interestingly, the regulation China’s secret service refers to dates 13 October 2004.
You must not do any market research, unless you have been granted a three-year license by the China National Bureau of Statistics. Possibly among China’s most ignored regulations.
But who will invest without having done market research first? “China is a big market” was good enough in the 1990s, but no longer today. And to do market research, you should already have to put-up with China’s Kafka-esque bureaucracy? Not a good entry.
Xi Jin Ping back-stabbed by the MSS
This latest xenophobic broadside directed against foreigners and foreign-owned companies came the day after General Secretary Xi Jin Ping had tried to convince American CEO’s - who typically only know China through the windows of 5-star hotels - that China is opening up and that there is still a good investment landscape.
President Xi Jinping met with a group of American business leaders in Beijing including Blackstone Inc.’s Stephen Schwarzman and Qualcomm Inc.’s Cristiano Amon as China is seeking to restore confidence in the economy and keep relations with the US on a stable footing.
President Xi Jinping met with a group of American business leaders in Beijing including Blackstone Inc.’s Stephen Schwarzman and Qualcomm Inc.’s Cristiano Amon as China is seeking to restore confidence in the economy and keep relations with the US on a stable footing.
Xi said he doesn’t see the need for Washington and Beijing to decouple, and that he wants American businesses to invest in China, the person said.
Well, Xi contradicts himself (not a bad thing from Xi’s perspective, because already Mao Zedong had decreed that socialism thrives on contradictions).
Xi absolutely did see the need for Washington and Beijing to decouple when he authored Document No. 9 twelve years ago and forced the reversal to state-ownership of the economy 11 years ago in the Decision of the 3rd Plenum of the 18th Central Committee, both of which in are at the core of China’s decoupling process from the rest of the world.
No, it was not the capitalist enemies of the people and splitists of the motherland who started decoupling. Actually the U.S. administration needed full 5 years to understand what China was doing then.
Xi also acknowledged issues with the domestic economy, adding that officials can handle them and the Chinese economy hasn’t peaked, the person said, describing the talks as open and frank.
This is the trouble with Xi. He is an upright, well-studied Marxist, with the remarkably uneventful career of an entitled Red Princeling [yes, he and his family had been victimised by Mao Zedong, just like uncounted others]. Xi is a true believer in the “red gene,” who deems himself being Mao Zedong’s loyal disciple, blissfully trusting that all things economic should work just fine in line with his very own interpretation of Marxism-Leninism, commonly referred to as “Xi Jin Ping Thought.”
Before Xi, the career scorecard of communist officials was tied to economic growth. Xi changed that, so today political correctness, knowledge-of and adherence-to the True Doctrine as well as personal loyalty to Xi are the ultimate career propellants.
And China’s economy responds accordingly.
D.I.Y. time for Xi
If Xi does not do it personally, it won’t happen and no-one will take the initiative, unless he approves it first. But for fear of drawing Xi’s ideological ire, no-one will propose controversial initiatives. And that is how the center of the universe in Beijing becomes a disconnected echo-chamber - as predicted by renowned China expert Bill Bishop ten years ago.
It is not that Xi does not act with the best of all intentions and it is not that there have not been vast improvements in China, seriously.
But the overarching concept of a single, expressly above-the-law party, in firm control of all three branches of government, legislative, executive and judicial, in combination with substantial state-ownership of the economy has provenly failed multiple times, including in China itself.
Socialism thrives on contradictions - until it doesn’t.
Initiated by the Ministry of Mines and Energy – MME (https://www.gov.br/mme/pt-br), Brazil will have a mining development program with a focus on the energy transition. The objectives of this program will include expanding geological knowledge, mineral research, and Brazilian production of strategic minerals for the energy transition, as well as developing the mineral transformation of these minerals within Brazil.
Last year, 114 workers were rescued from carnauba plantations, Brazilian government figures show - a nine-year high. The numbers suggest slave-like labour is an increasing problem across industries, hitting the highest number since 2009 with 3,190 rescues.
In Brazil's penal code, the definition of slavery is not just forced labour, it's also debt bondage, degrading work conditions and long hours that risk workers' health.
We do expect that the rare-earth-gold-diggers in Brazil mind ESG.
The talks in Jiangxi province included topics such as the potential for state-run Jiangxi Copper, China's leading producer, to gain influence on First Quantum's board decisions, two of the sources said. Also discussed was the future of First Quantum's Zambian assets and the prospect of Jiangxi buying its disputed copper concentrates inventory, opens new tab from Panama, they said.
Reuters should adhere closer to their “Trust Principles.” Jiangxi Copper are integral part of China’s military-industrial complex, its ultimate controller being a state-owned ordnance company in Beijing.
//Science
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