Archive for the ‘RARE EARTHS’ Category

RARE EARTH MINERAL PRICES ARE ON THE WAY UP

Friday, July 4th, 2014

re_mine_in_baiyun_ebo_inner_mongolia-nasa-image www.www-globalcommodities.com

This image was taken by the Advanced Spaceborne Thermal Emission and Reflection Radiometer (ASTER) on board the NASA research satellite Terra. The image covers an area of 15 × 19 km.

Bayan Obo mine Inner Mongolia China | Source: NASA

Participants in the rare earth industry have been through the grinder over the past decade.

Amid stiff competition for title of commodity with biggest booms and biggest busts (nickel anyone?), rare earths take top honours.

Here’s a quick recap of what brought us here:

    • 80 years ago placer deposits in India and Brazil, and later monazite ore from South Africa meet the world’s REE demand, such as there was.
    • The US steps in but after five decades as the world’s top source Molycorp mothballs Mountain Pass in 2002.
    • China quickly establishes a monopoly on global production and then panics markets by introducing export quotas in 2005.
    • REE prices goes into the stratosphere (for example, dysprosium prices do a bitcoin, rocketing from $118/kg to $2,262/kg between 2008 and 2011).
    • Scores of explorers jump into the space with Canadians and Australians finding deposits all over the world from Manitoba to Malawi.
    • Old mine plans are dusted off and punters pour billions into the sector.
    • Trade spats ensue, lobby groups spring up and politicians even find ways to bash Barack Obama over rare earths.
      • Rare earths become the basis for a bestselling video game and Hollywood comes to the party, albeit late, using samarium as a plot device and confusing entertainment writers everywhere.
      • REE prices begin to tank even before production outside China ramps up and stock in bellwethers Molycorp and Australia’s Lynas dive.
      • The WTO finally rules on the legality of China’s export restrictions – years after the quotas became irrelevant.
      • When Kim Jong-Un gets in on it, it’s a sign the industry has hit rock bottom.

      Now it seems a turnaround may be in the offing.

      And again you have China to thank.

      Faced with growing discontent at home, China’s new leadership in March declared a war on pollution.

      And its low-tech and dirty REE industry is firmly in the crosshairs.

  • rare earth dmans graph roskill-supply-ree-2014 chart image www.www-globalcommodities.com
    • Another reason why there is room for new producers is the increasing prevalence of captive supply
      Some estimates put exports from illegal mining through networks in Vietnam and Hong Kong as highs as 40,000 tonnes, matching China’s annual quotas, further depressing prices.Beijing is poised to impose a bunch of new environmental regulations including green export certificates and new taxes that are based on the value of the minerals, rather than on volume as is the case at present.

      Rare earth production taxes are pegged at RMB60 ($9.14) per tonne mined for light rare earth operations and RMB30 for medium and heavy rare earth operations.

      Any increase will mean higher prices at the producer level, particularly for rare earths with greater value such as europium, terbium and neodymium, and a reduction in stockpiles. At least that’s the intention.

      Official English outlet China Daily reports the move aims to reflect the scarcity of the minerals (China maintains it only has 23% of the world’s REE reserves even though it still produces more than 80% of the global total) and the impact of extraction.

    • rare-earth-fob-china-domestic-apr-14 chart image www.www-globalcommodities.com
    • Businessweek quotes Chen Huan, a rare earth analyst with Beijing Antaike Information Development, a research unit of the state-backed China Nonferrous Metals Industry Association, as saying the new rules could see prices rise more than 20% from current levels.Higher prices are not just useful for Beijing in terms of better environmental regulation, but as most of the larger miners and processors are state-owned, higher prices affect the bottom line directly

      It’s an outlier, but praseodymium prices are already up 60% from a year ago

      While prices rose and fell more or less in unison, predictions are that prices of the 17 elements may begin diverging more – particularly between lights and heavies. It’s an outlier, but praseodymium prices are already up 60% from a year ago and at times trade for as much as $140 per kilogram oxide.

      While not quite as sanguine as other market observers, research house and rare earth authority Metal-Pages also sees signs of a turnaround in REE prices which could occur “across the board in 2015” as supply and demand factors become more balanced.

    • The London and Beijing-based data provider in its latest outlook cites a number of factors for optimism about prices and the viability of new mining projects outside China:
      • Smuggling has subsided slightly, due to low prices and China’s ongoing crackdown
      • Prices have become uneconomic for many producers
      • Recycling of REEs remain difficult and expensive and the impact on supply and therefore prices could be a decade away
      • Demand for high-powered magnets could grow 5%–8% over the next decade
      • Forced consolidation and vertical integration of Chinese industry should reduce competition and make output control easier
      • Chinese domestic consumption already at 70% of global total, is expected to rise sharply as it ramps up domestic clean energy and moves into more high-tech sectors
      • After WTO ruling against it Beijing’s strategy is shifting from export to production control
      • The Baotou Rare Earth Products Exchange launched in March should encourage private sector stockpiling a la Fanya Metal Exchange
      • rare earth roskill-demand-pie graph image www.www-globalcommodities.com

      The lifting of export quotas as mandated by the WTO (China is appealing the ruling, but doesn’t really have a better chance to make its case stick a second time around) is not expected to have an influence on prices.

      Exports since 2005 has not even come close to the export ceiling and over the past three years, quotas were more than 20,000 tonnes above actual exports.

      What could have an impact is the removal of export taxes on rare earths products which have been raised and widened on several occasions and are now levied at 15% – 20% by the country’s General Administration of Customs.

    • Roskill Information Services says in a new report scrapping these taxes could affect non-Chinese producers by potentially reducing FOB rare earth prices, and bring it in line with domestic Chinese prices.The impact, at least in the short term, could be significant as domestic prices were on average 36% below reported FOB prices in April this year according to David Merriman, senior analyst at the London-based metals and minerals consultancy.

      However, says Merriman, both FOB and Chinese domestic prices are expected to increase based on new tighter control of production and increasing costs.

    • Another reason why there is room for new producers is the increasing prevalence of captive supply.Purchasers of raw material that produce downstream rare earths products like powders and magnetic alloys are eligible for a 16% VAT rebate.

      That’s one of the reasons Chinese producers like Inner Mongolia Baotou Steel Rare Earth Group and Chinalco have invested heavily in downstream facilities (thanks to its three Chinese plants, Molycorp also happens to be one of the companies benefiting from the rebate).

      “Increased captive supply since 2012 has resulted in a greater portion of rare earth raw materials and intermediate products not being made available even to the Chinese domestic market and thus reducing supply for other consumers,” says Merriman.

      The biggest longer term threat to the industry is substitution.

      Rocketing prices in 2010–2011 sent consumers scurrying to find alternatives and ways to use less with tolerable results.

    • The Baotou exchange launched in March should encourage private sector stockpilingIt’s an outlier, but praseodymium prices are already up 60% from a year ago

      Roskill Information Services says in a new report scrapping these taxes could affect non-Chinese producers by potentially reducing FOB rare earth prices, and bring it in line with domestic Chinese prices.

      The impact, at least in the short term, could be significant as domestic prices were on average 36% below reported FOB prices in April this year according to David Merriman, senior analyst at the London-based metals and minerals consultancy.

      However, says Merriman, both FOB and Chinese domestic prices are expected to increase based

  • Metal-Pages says depending on the industry and companies involved consumption fell between 25% – 75%: “One of the most dramatic cases is the reduction in the use of dysprosium in high performance NdFeB magnets. Magnet makers have successfully reduced use by 50-75% and for some magnets or eliminated it all together.”While much higher prices would be a more than welcome development for the dozens of rare earth explorers and developers that are still out there, another panic in the West on pricing would only lead to long-term demand destruction.

    The giant mine in Bayan Obo, Inner Mongolia near Baotou City, produces almost a third of the world’s rare earths and does so as a byproduct of iron ore mining.

    Henry Sapiecha

Lynas heading for full forward of rare earths in Malaysian processing plant

Friday, July 4th, 2014

Lynas-heading-for-full-rare-earths-image www.www-globalcommodities.com

Australian rare earths producer Lynas (ASX:LYC) said Thursday that it is close to generating steady output at its recently commissioned Malaysian processing plant and that it expects to reach its initial rate target by December.

Investors apparently shrugged off the news, with the Sydney-based company’s shares falling 7% to close at 13 cents.

The firm has struggled to increase output due to production problems at its Lynas Advance Material Plant (LAMP) in Malaysia. Construction of the plant began in November 2011 but the facility faced fierce opposition for years.

Lynas, one of only two miners of the coveted elements outside China, has also been plagued by financial difficulties.

According to The Sydney Morning Herald, the company will relocate its head office to Kuala Lumpur as part of fresh efforts to cut costs and streamline operations.

The newspaper said the move will result in an unspecified number of layoffs.

“I am very focused on addressing those areas of our business where we have been underperforming,” the newspaper quoted Amanda Lacaze, the company’s new chief executive, as saying. “I have reviewed the business with the team and we have identified opportunities to improve cost, production and financial performance.”

The Aussie miner is not the only firm facing challenges to increasing rare earth output. US producer Molycorp (NYSE:MCP), which together with Lynas accounts for the bulk of rare earths outside China, has also been under pressure to expand capacity.

China, the world’s primary supplier of the metals used in electronics, missiles and cars, restricts its rare earths exports, driving up demand.

Henry Sapiecha

MEXICAN GOVERNMENT TO FUND RARE EARTH PROJECT

Sunday, May 25th, 2014

THE RARE EARTH FUNDING IN MEXICO BY GOVERNMENT

mexicos-government-to-fund-rare-earth-exploration image www.www-globalcommodities.com

Mexico’s Ministry of Economy will begin funding explorations projects to locate deposits of rare earth metals, a group of elements of increasing importance in variety of industries including green technology, defence systems, consumer electronics, and high-tech applications.

According to country’s Geological Survey (SGM), global demand for rare earths in 2016 will hit 160,000 tons, with China expected to produce up to 80% of that demand, which leaves room for other suppliers, The Economista reports (in Spanish).

The prediction coincides with the latest studies by the US National Academy of Science and the European Union, which have warned the world could soon face a serious shortage of the critical elements.

At the moment about 95% of the world’s rare earths come from the Asian giant, which also imposes export quotas.

Only two rare-earth mines currently exist in other countries. One of them is Lynas Corp’s (ASX:LYC) Mount Weld mine in Australia, and the other one in California, US, owned by Molycorp (NYSE:MCP).

Mexico, the world’s 10th-biggest crude producer, is in the midst of an ambitious programme of reforms proposed by the government last year. These aim to throw open the country’s energy sector for the first time in more than seven decades. They also seek generating cheap energy to fuel local industries.

The country’s mining industry employs about 334,000 directly, with 2 million people employed indirectly, making the sector the country’s fourth largest industry in dollar income, behind cars, oil and electronics.

The country’s mining industry employs about 334,000 directly, with 2 million people employed indirectly, making the sector the country’s fourth largest industry in dollar income, behind cars, oil and electronics.

While the amount of rare earth deposits Mexico may have it is not yet known, the country holds vast underwater reserves of these elements off its west coast. Deep-sea mining, however, is unlikely to replace land-based mining, believe experts, but they add it could alleviate the fear of shortages and challenge China’s virtual monopoly on REE production.

Henry Sapiecha

CALIFORNIA HAS THE ONLY ACTIVE RARE EARTH MINE IN THE USA

Tuesday, June 4th, 2013

WYOMING RARE EARTHS MINE RELEASES LATEST REPORT

Wyoming-300x250

Wyoming released Monday its new statewide survey of rare earth elements with promising results.

The Wyoming State Geological Survey completed an investigative report — including samples, maps, measured and recorded amounts — on the minerals to encourage further commercial exploration.

Through the scientific study, the WSGS has confirmed that rare earth elements occur across the state. For example, data indicates 20 sites produced samples with at least five times the average crustal abundance of rare earths — a positive measurement for deeper examination.

The report is available for download from the WSGS site.

Additionally, WSGS has established the Wyoming Database of Geology (Wyo-DOG) to assist in future geological studies. The database includes all elemental analyses along with brief write-ups and photographs of most samples and sites.

The Bear Lodge deposit, near the town of Sundance in northeastern Wyoming, is considered one of the largest potential sources of the minerals in North America.

Currently, Molycorp’s Mountain Pass operation in California is the only active mine in the US.

Henry Sapiecha

fine gold line

ILLEGAL MINING OF RARE EARTH MINERALS IN CHINA KEEPS WORLD PRICES DOWN

Sunday, May 5th, 2013

LOW WORLD PRICES RARE EARTH MINERALS- THE CHINA CONNECTION

Illegal exploitation, production and smuggling of rare earths in China have added to the supply glut, depressing global prices, according to China’s vice-minister of industry, Su Bo.

China dominates the global market, producing over 90% of total rare earth metals.

In 2010 the Chinese government launched a campaign to curb illegal production ending operations for hundreds of unlicensed rare earth miners, processors and traders, and “leading to a fourfold spike in export prices and complaints from buyers in Europe, Japan and the United States.”

Prices peaked in 2011 but have since fallen alongside sluggish global economic growth.

Su says that their is much work to be done to diminish a black market that has traded roughly 40,000 tonnes of rare earths in recent years.

Henry Sapiecha

GREENLAND HAS RARE EARTH MINERALS BUT SAYS NO TO MINING THEM

Tuesday, January 1st, 2013

Greenland easily can, but prefers

not to be globe’s new top rare

earth producer

Greenland’s treasure trove of rare earth metals, the largest deposit outside of China, cannot be mined because the elements are connected to restricted radioactive materials.

Several reports, such as The Epoch Times’ latest article, claim the island could become the world’s top rare earth producer if it wasn’t because of the tight restrictions the local government has on the exploitation of its natural resources. Not to mention the “zero tolerance” policy when it comes to uranium mining.

Recent geological work shows that below Greenland’s massive ice mass there is enough rare earths to satisfy at least a quarter of global demand in the future. The problem is they are bound up to uranium.

Jorgen T. Hammeken-Holm, department head at Greenland’s Bureau of Mineral and Petroleum confirmed to The Epoch Times that rare earth metals are tied up to the radioactive yellow material.

“With our current zero-tolerance policy [against uranium mining], it means that this deposit cannot be exploited,” Hammeken-Holm was quoted as saying.

But that is not the only problem. The other main issue is the lack of skilled workers. The national labour union wants the government to ban the use of low-wage foreign workers because it does not want local pay scales undermined or jobs lost to outsiders. However, there are simply not enough nationals able to help developing mines in the island.

That is why the Greenlandic Parliament passed earlier this month an act allowing large-scale extraction projects valued more than $900,000 to use imported labour and contractors during the development phase of the projects.

“When that phase is over, [the migrant workers] must leave the country, and the regular workforce, contractors, or service personnel must take over,” told The Epoch Times Hammeken-Holm.

Much more than rare earth

Several European leaders have been recently engaging in a strenuous bout of diplomacy with Greenland’s authorities to open up access to the country’s riches.

The vice-president of the European commission, Antonio Tajani, has led the negotiations, shaping a deal to look at multiparty development of some of Greenland’s deposits. As reported by The Guardian, the agreement is likely to extend beyond rare earths to metals such as gold and iron, and potentially to oil and gas, which are plentiful in the country’s waters.

If successful, a paradigm shift might be around the corner, as Greenland’s oil resources may be able to generate approximately 50 billion barrels of oil. This vast potential resource would benefit the European Union as most of the continent’s currently exploited oil and gas fields belong to Norway, a non-member of the block.


Sourced & published by Henry Sapiecha

SPACE ASTEROID MINING MAKES SENSE SAY THE EXPERTS

Tuesday, December 11th, 2012

MINING GOLD & PLATINUM IN SPACE ASTEROIDS
Planet Bid

911 Metallurgist explains why asteroid mining is needed: many metals that underpin our modern economy are quickly being depleted.

Without any new technological advances, metals like zinc and gold are expected to run out in 100 years.


Priority Privilege - Travel Discount Card

Sourced & published by Henry Sapiecha

CHINA & THE RARE EARTH MINERALS DEBATE & CONTROL

Sunday, May 13th, 2012


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RARE EARTH MINERALS ARE A QUESTIONABLE INVESTMENT SOME SAY
finance_explode_earth_meteorite

Platts reports Thursday China will start forcing rare earth producers out of business if they don’t qualify for new value-added tax permits being allocated from May 1.

Officially it’s China’s latest bid to curb resource plundering, dangerous artisanal mining and widespread pollution.

China produces over 95% of the world’s REEs used in a variety of industries including green technology, defence systems and consumer electronics.

Platts quotes one Chinese industry source as saying: “We believe it is a start that China will undertake to regulate the country’s rare earth production, however there is a long way to go.”

Cleaning up the notoriously dirty rare earth business in China is laudable, but the latest regulations are probably aimed more at trying to stop chronic overproduction of REEs in Sichuan and Inner Mongolia, which have recently led to an implosion in export prices.

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Official output quotas in place since 2007 are readily exceeded by 40% – 50% each year. While prices have been moderating since the record levels of Q3 2011, in 2012 prices for many rare earths are close to collapsing.

Abundant, less valuable REEs such as lanthanum have experienced the sharpest reversals.

Lanthanum oxide – used in ceramics and fuel catalysts – for example rose from a price of just $8.71/kg in 2008 to $117/kg in the third quarter last. At the start of 2012 it had pulled back to $66/kg.

Now it has halved again – on Monday a kilogram of lanthanum could be picked up for $26. That’s a 77% collapse in less than nine months. And consider that inside China that same kilogram costs half $13.15.

When export prices of lanthanum were at record highs of $117/kg domestic Chinese prices were less than $20. That differential has gone from almost 10 times to less than double.

This price behaviour can be seen across the board.

Cerium oxide used to polish TV screens and lenses is now also trading at $26 from all-time highs of $118 in the September quarter last year and just under $60 in Q4. The price for cerium oxide was $4.56 in 2008.

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Heavy and scarcer REEs have generally held up better, but many have experienced price declines of 50% or more.

Neodymium oxide used in windmills have seen a dramatic slump – from $338/kg in Q3 2011 to $120/kg as at 23 April.

A hybrid vehicle ingredient, dysprosium rocketed from a price of $118.49/kg in 2008 to $921.20/kg in the third quarter of 2011 and $2,262/kg by September last year.

Dysprosium, also used in conjunction with vanadium and other elements in making laser materials, has now given up more than $1,000 per kilogram and went for $1,170 this week. The price is also now much more in line with domestic Chinese prices of $729/kg.

The reversal in europium oxide – the priciest REE which is used in medical imaging and the nuclear and defence industries – has been most startling.

The price of europium increased almost 10-fold from $492 in 2009 to average $4,900 in the third quarter of 2011. Three months later it dropped $1,100 in price and is now worth $2,420 a kilogram. Chinese domestic europium is another $1,000 cheaper at $1,315/kg.

While producers of flat screen TVs, hospital scanners, jet fighter electronics and sophisticated laser systems must be rejoicing rare earth mining heavyweights like Molycorp and juniors like Quest and Avalon cannot be too thrilled by events.

Just Jewellery

Sourced & published by Henry Sapiecha

RARE EARTH MINERAL VENTURES WILL FAIL AT THE RATE OF 96%

Wednesday, November 2nd, 2011

Nearly all of non-Chinese rare earth projects

will fail, says Jack Lifton

Andrew Topf

Consultants in the mining industry  say that the high processing costs and level of expertise required in bringing rare earth mines into production means most of them will eventually fail. In an interview with Reuters, Jack Lifton, founder of Technology Metals Research, said of the 244 companies hoping to extract REEs, less than 4% will be profitable: “The choke point for all the companies is the question of what they can do with the concentrated REM ore once it’s above ground. You can extract the rare earths together, but then you have to separate them…the world’s REM separation capacity is 99 percent Chinese and they have unused capacity,” Lifton said. “The Chinese overwhelmingly control this and that is the key to the rare earth industry. Without separation capacity, all you have is a loss-making ore concentrate company.”

Sourced &n published from mining journals by Henry Saoiecha

COLTAN – [80%]FOR MOST OF THE WORLDS MOBILE PHONES MANUFACTURED COMES FROM THE CONGO

Tuesday, November 1st, 2011

COLTAN IS A RARE MINERAL FROM THE CONGO USED IN MOBILE PHONES

The Democratic Republic of Congo is one of the poorest countries in the world but is the home home to a nondescript black rock known as Coltan… a vital ingredient in the production of nearly every cell phone and computer on the planet. Without Coltan, our technology-driven lives would come to a screeching halt, and Congo has 80% of the world’s supply. It has lead to corruption and never-ending armed conflict that has devastated the country.

Sourced & published by Henry Sapiecha

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