Rare Earth – the Evolving Drama (Final Post)

THIS ORIGINAL POST WAS PUBLISHED MAY 14, 2011

 

Rare Earth – the Evolving Drama (Final Post)

In recent years quite a big number of publications touches the rare earth elements (REE) developments. Both mining gurus and newsmen exchange various ideas, make their valuations and projections.  What is the drama per se? In my opinion – who will be the first to challenge the market after the well-known announcement from China? In no way I am pretending to be one of gurus or pundits, but I do hope that some of the resources that I list may help anyone interested to obtain information for whatever purposes it is required. So, this final post on the theme I am making in a sort of Q&A narration.

I. What are the sources of comprehensive information on REE?

1. Quite obviously, the latest being Technology minerals. The rare earths race is on! April 2011 by Ernst & Young. These are the issues that are examined:

•  What are the short- and medium-term expected demand  trends for rare earths?
• What is the global stakeholder response to the rare earths supply issue: from the governments to the explorers and the end users?
• What factors are critical in analyzing a rare earths project?
• What sources of funding are available to develop a rare earths project?
• What challenges, risks and issues are inherent in exiting a rare earth project?

2. Rare Earth Elements: The Global Supply Chain by the U.S. Congressional Research Service - Prepared for Members and Committees of Congress  - analysis of US policy related to rare earth. Major highlights:       

• What Are Rare Earth Elements?
• Major End Uses and Applications
• Demand for Rare Earth Elements
• The Application of Rare Earth Metals in National Defense
• Rare Earth Resources and Production Potential
• Supply Chain Issues
• Role of China
• Rare Earth Legislation in the 111th Congress
• Possible Policy Options
• Challenge China on Its Export Policy
• Establish a Stockpile

 3. USGS publications.

3a. A list of all REE deposits (about 150 pages) was compiled in 2002 by USGS: REE Mines, Deposits and Occurrences

3b. Another fresh USGS publication:

 The Principal Rare Earth Elements Deposits of the United States—A Summary of Domestic Deposits and a Global Perspective – it also has a comprehensive information on world deposits

• The Rare Earth Elements
•        Basic Geology of Rare Earth Elements
•        Mineralogy of United States Deposits
•        Current Sources and Domestic Reserves
• The Principal Rare Earth Elements Deposits of the United States
• Phosphorite Deposits in the Southeastern United States
• Placer Rare Earth Elements Deposits

II. Any latest information on investment in REE?

1. A rather comprehensive source of information on REE is this Website: REE-Investor . According to Alexa there is not much Internet traffic to the site over the last three months, although it has an updated new page and what I consider the most valuable – a collection of 36 various reviews by the REE Guru Jack Lifton . Indeed, if you want to have a comprehensive picture of this industry segment – just read these comments! Beside that: The list of rare earth companies ; Under Company reviews:  Avalon Rare Metals,  Rare Elements Resources. There is no information on who runs that site – but I have a suspicion that it is Mr. Jack Lifton himself?

2. Another list of REE companies is in Investing in rare earth elements with updated REE news

3. Discussion on Seeking Alpha Why Investors Should Be Cautious of Rare Element Resources and comments

4.  Market Vectors® Rare Earth/Strategic Metals ETF (REMX)

 Source: Investment Case for Rare Earth/Strategic Metals

III. Is there any latest practical information for businessmen, starting REE venture?

1. The cited above E&Y study

 Source: Technology minerals. The rare earths race is on! April 2011

Funding and other practical issues, including suggested business models are in detail described in

What sources of funding are available to develop a rare earths project? and in Appendix 3 — What models have been used in practice to develop a rare earth project

 2. Reading The Principal Rare Earth Elements Deposits of the United States—A Summary of Domestic Deposits and a Global Perspective you may pay attention to the section Developing a Rare Earth Elements Mine, that besides other various useful information has this table:

This concludes my foray into REE; and I hope that this may bring some value to general information exchange in mining industry over the Internet.

Rare Earth - the Evolving Drama

This post was originally published May 13, 2011

 

Rare Earth - the Evolving Drama

 

Recent world developments once again surfaced the importance of rare earth commodities. The really tragic rare earth market story is proficiently described in this presentation: Arafura Resources – On Track to Supply Rare Earths To Users Worldwide in 2013 

Another appealing graph is produced by the USGS: Global rare-earth-oxide production trends. 

 Source:  China’s Rare-Earth Industry

Analyzing my Blog Stats I have noticed that this entry is very popular with visitors worldwide: Investing in Thorium: a Safe and Green Alternative to Uranium. Thus, I am re-posting my 15 months’ old blog posts (with some 2011 updates) and in the follow-up post I will make some present day summary.

The Rare Earth market is not very prominent as compared to other commodities. However, according to some analysts “it may prove to be the most geo-politically controversial market in the future.” And once again, this is very tightly associated with China. Just yesterday, the Chinese news mediaproudly reported: “China becomes rare earth heavyweight” - China is now the world's largest producer, exporter, and consumer of rare earth resources.

In this blog post I would attempt to briefly outline some issues of rare earth market.
What are the metals? This is a good presentation of Rare Earth from Rare Earth Elements

  

This beautiful slide has a good visualization:

Source:  Critical and Strategic Failure in Rare Earth Resources -  A National Defense and Idustrial Policy Failure

   By Wings Enterprises, Inc.

 
Another valuable source is Rare Earth Elements by Stephen B. Castor and James B. Hedrick that has very detailed description including world deposits, exploration and mining methods.

The situation with Rare Earth in the USA is analyzed in the report prepared by the Molycorp Minerlas, LLC. prepared for Congressional Leaders  in January 2009

REPORT HIGHLIGHTS:

·                  The global market for rare earths consumed 126,682 metric tons of materials in 2008 and an estimated 113,610 metric tons in 2009. This is expected to increase to 175,618 metric tons in 2014, for a compound annual growth rate (CAGR) of 9.1%.

·                  Mechanical and metallurgical applications have the largest share of the market and used 42,765 metric tons of materials in 2008. This is expected to decrease to 36,770 metric tons in 2009 and increase to 56,410 metric tons in 2014, for a CAGR of 8.9%.

·                  Glass and ceramics applications have the second-largest market share, and used 34,730 metric tons in 2008 and an estimated 32,500 metric tons in 2009. This is expected to increase at a CAGR of 8.5% to reach 48,890 metric tons in 2014.

China produces 90- 95% of World Rare Earth Elements (REE) supply. There is one producing North American mine— Mountain Pass in California has been restarted. A very interesting discussion on Rare Earth (including the new developments in Greenland – that will probably will shake the market)  is hosted by Pure Asset Trader -- China's Mission: A Rare Earth Element Monopoly with this citation:

China currently produces 95% of the world’s rare earth output. A very detailed description of China’s resources may be found at the China Mining web-site : “The available REE products encompass bastnaesite, ion type REE ores and monazite. The productive capacity of REE concentrates is as high as 80,000 tons and the output is higher than 50,000 tons. The total smelting capacity of REE ores is over 100,000 tons a year (referring to REE oxides) and the output reaches 40,000~50,000 tons. At present, there are more than 70 hydrometallurgical plants and they produce 300 varieties and 500 specifications of REE products. The purity of a single REE oxide is 99%~99.9% in general and that of batch REE products can be as high as 99.9%~99.999%. The quality of products has come to the relevant national standards and can meet the demands of the customers both from China and abroad.”

Chinese Ministry of Industry and Information Technology released a draft plan entitled “Rare Earths Industry Plan in 2009 – 2015” (REIP) – in order to restructure the rare earth industry, eliminating many smaller mining enterprises and leaving the industry with 20 big producers. The REIP would limit China’s annual production to 130,000 to 150,000 tons and restrict exports. The Plan recommends limiting Chinese exports to below 35,000 tons a year, and will prohibit export of yttrium and heavy rare earths dysprosium,  terbium, thullium and lutetium. In September Reuters reported that China's sovereign wealth fund is mulling to launch its own domestic rare earth firm. China Investment Corp (CIC) may do this through Jianyin Investment, its wholly-owned domestic industrial investment arm.

ARAFURA RESOURCES LIMITED  issued a press-release: China further tightens Rare Earth Production and Exports that has some good observations.

Brian Hicks in the WealthyDaily also discusses China’s role and has this illustration:

And I would also recommend reading Rare Earth Elements and The China Factor – Again… from the SeekingAlpha.

Despite optimistic views expressed in the cited above source on the Greenland REE opportunity -  Displacing China as a Rare Earth Producer is No Small Feat – as it is discussed in this video by Dudley Kingsnorth of Industrial Minerals Company of Australia Pty Ltd, an expert in the field of Rare Earth metals. However, latest news reports indicate that there is an upcoming shift in the REE market: China is turning its policy in a direction that may greatly affect the whole world – form providing supplies to the world industries to supplying internal ones. Thus, the new resources may be vital – as the ones claimed by Greenland Minerals and Energy . The company posts on its Web-site this material: World faces hi-tech crunch as China eyes ban on rare metal exports – worth to read.

2011 Update: A thorough analysis in provided in this USGS pamphlet: China’s Rare-Earth Industry

More to come...