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Cobalt, Critical, Strategic and Rare Earth Minerals and Metals

Prospecting for … cobalt – by Staff (Mining Journal – October 2, 2016)

http://www.mining-journal.com/

Believers in an impending cobalt shortage, higher prices, and the need for supply sources that are disengaged from primary copper or nickel production – and “unethical supply chains” – don’t see many new cobalt mines on the horizon. Prospecting is certainly on the rise, but when place-names such as Cobalt (Ontario) and Mt Cobalt (Queensland) don’t help, you know the job ain’t easy!

Cobalt has been called Canada’s forgotten mining town, but the records show the focus of an unprecedented silver prospecting and mining boom in the early 1900s delivered a fortune that “far surpassed the Klondike in terms of profits, production, and long-term impact”, wrote one historian.

“The early history of hard rock mining in Ontario is essentially the story of the discovery of silver in Cobalt in 1903. It wasn’t long before the Cobalt mines became the third-largest producer of silver in the world and by the time the boom petered out in the 1920s, the camp had become the fourth-largest silver producer ever discovered,” he continued.

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Lundin’s agonizing Congo decision – by Frik Els (Mining.com – September 20, 1016)

http://www.mining.com/

Top publicly-held copper producer Freeport-McMoRan Copper & Gold (NYSE:FCX) in May announced the sale of its largest African copper mine to China Molybdenum (CMOC) for up to $2.65 billion.

The Democratic Republic of Congo’s state-owned Gecamines controls 20% of the high-grade Tenke Fungurume copper and cobalt mine. Lundin Mining (TSX:LUN) indirectly owns 24% which includes a right of first offer provision to pick up Freeport’s stake.

Toronto-based Lundin first received a notice from Freeport offering the company the right to acquire its effective share of 56% back in May and last week Phoenix-based Freeport granted the Canadian miner a second extension to make a decision on the purchase to September 29.

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The Key Challenge To Tesla’s Growth – by Michael McDonald (Oil Price.com – August 12, 2016)

http://oilprice.com/

Tesla’s increasingly ambitious plans to rule not only the electric vehicle space but also the solar energy space are likely to become more difficult to achieve over the next year. It has been widely reported in recent weeks that Tesla’s gigafactory is facing some challenges in becoming fully operational.

What is perhaps less well understood is the magnitude of the supply chain challenges that will face Tesla and its gigafactory. Tesla’s goal is to produce 500,000 vehicles a year by 2018. The company has accelerated its production time table in large part due to the enormous amount of demand the company saw for its Model 3 sedan.

The firm announced almost 375,000 preorders for the vehicle. To fulfill this demand plus new demand that the company will likely see for its products over the next couple of years, Tesla needs to produce more lithium ion batteries in 2018 than the entire world produced in 2013. That’s not an impossible feat given the size of the gigafactory, but it is challenging.

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Lifton challenges the WSJ editorial on Honda no longer using heavy rare earths – by Jack Lifton (InvestorIntel.com – July 20, 2016)

http://investorintel.com/

This morning The Wall Street Journal editorial page, no less, “reports” that Honda will no longer use “heavy” rare earths in its “hybrid” car engines after 2017.

What the WSJ editorial staff does not understand is that this is shilling for Honda and says nothing about the use of rare earths in general for EVs, electrified, not hybrid, vehicles. Honda is among the world’s largest manufacturers of internal combustion engines, which do not and have not ever used rare earths in their core construction.

Honda does not want the electrification of cars, if it ever happens, to happen soon, because it has a huge investment in the design and manufacturing of internal combustion engines. Hybrid combinations of electric and internal combustion power trains, such as in Toyota’s class leading Prius, have long used nickel metal hydride (rare earth based) batteries in the electric power train and high efficiency heavy rare earth using electric drive motors.

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Congo’s small miners fill hole left by downsizing multinationals – by Aaron Ross (Reuters U.K. – July 18, 2016)

http://uk.reuters.com/

His toes bursting out of sneakers several sizes too small, a miner hacks with a pick at the copper and cobalt-laced stone in southeastern Congo, slowly filling a sack that could earn him anywhere from a handful to a few hundred dollars.

The 42-year-old father of five, who only gave his first name, Stany, has done this nearly every day for a decade, after he quit his maize fields for the comparatively lucrative mines of Africa’s top copper producer.

But unlike most artisanal mining, this is sanctioned by the Congolese government. As its mining heartland endures mass layoffs at big mines caused by low commodity prices, small-scale mining is helping to fill the deficit.

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China’s Rare-Earths Bust (Wall Street Journal – July 18, 2016)

http://www.wsj.com/

A new Honda engine shows the limits of Beijing’s coercion.

Honda says it has co-produced the world’s first hybrid car engine that doesn’t use heavy rare-earth metals, allowing it to cut reliance on imports from China. This innovation, to debut in Honda minivans this fall, illustrates how far we’ve come since the great rare-earths panic of 2010.

Back then, China produced 95% of global rare earths and thought it could hold markets hostage by restricting exports. So it cut export quotas by 40%, partly to push foreign buyers to move factories onshore, and then temporarily blocked shipments to Japan over a territorial dispute in the East China Sea.

Prices shot up tenfold as consumers and officials world-wide feared for supplies of 17 obscure elements they learned are used in high-tech gizmos from missiles to smartphones, wind turbines and electric cars.

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U.S. Brings WTO Challenge Against China Over Copper, Graphite, Other Minerals – by William Mauldin (wall Street Journal – July 13, 2016)

http://www.wsj.com/

Complaint says China failed to eliminate export duties as agreed

The U.S. on Wednesday accused China of failing to remove export duties on certain raw materials, as agreed when it entered the World Trade Organization 15 years ago, the latest in a series of trade disputes between the two countries.

China has kept export duties ranging from 5% to 20% on antimony, cobalt, copper, graphite, lead, magnesia, talc, tantalum and tin, U.S. officials said in a new WTO case filed against Beijing.

The duties, levied on shipments out of China, have the effect of making the minerals cheaper within the country, promoting manufacturing there in areas ranging from electronics to automobiles, while making the minerals relatively more expensive outside China.

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Honda Co-Developed a New Hybrid Car Motor in Order to Avoid Procuring Rare Earth Metals From China – by Katherine Tweed (Greentechmedia.com – July 12, 2016)

http://www.greentechmedia.com/

Japanese automaker Honda has co-produced the world’s first magnet for hybrid and electric cars that requires no heavy rare-earth metals.

The quest to find an alternative to heavy rare-earth elements in magnet manufacturing came after a 2010 dispute, during which China temporarily banned exports of rare-earth minerals. Even before that, however, Honda had been working to reduce the use of the materials in its manufacturing, as China began cutting back export quotas starting in 2006.

The motor is not completely without rare-earth elements. It still uses the light rare-earth element neodymium. But neodymium can be sourced from countries other than just China. Carmakers use neodymium magnets because they have the highest magnetic force of any magnet. Demand for these magnets is expected to soar in coming years as more consumers buy all-electric and hybrid vehicles.

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Rare-Earth Market – by Lee Simmons (Foreign Policy Magazine – July 12, 2016)

https://foreignpolicy.com/

By monopolizing the mining of rare-earth metals, China could dictate the future of high-tech.

Most people have no idea what’s in an iPhone. Yttrium and praseodymium don’t exactly roll off the tongue, but they’re part of what make smartphones so small, powerful, and bright. These exotic materials are among the planet’s 17 rare-earth elements, and surprisingly, the soft, silvery metals are not at all rare.

But they’re found in tiny concentrations, all mixed together, and usually embedded in hard rock, which makes them difficult — and messy — to isolate. In China, which mines 89 percent of global output, toxic wastes from rare-earth facilities have poisoned water, ruined farmlands, and made people sick.

Beyond high-tech gadgets, rare earths play a critical role in national defense, enabling radar systems and guided missiles. Ironically, they also power clean-energy technologies, such as wind turbines and electric cars.

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[Rare Earth Minerals] Lynas – Barbarians at its Gate? – by Christopher Ecclestone (InvestorIntel.com – June 13, 2016)

http://investorintel.com/

It’s easy in all the euphoria currently swirling in the Lithium to forget that Rare Earths and Lithium were mentioned in the same breath as “no-hopers” only a few years ago. The factors that made Lithium what is was also held true for Rare Earths.

Let’s look at it. Both bubbled to the surface as sexy new things in 2009-10. A lot of press ink was spilled and scores of new vehicles were created. As we have often sustained the appearance of REEs “saved” Lithium from a similar bubble to be burst. Lithium plays were probably around 30 in number (and only 20 of any real substance) when REEs burst on the scene and created 100/200/300 listed plays (depending on your calculations).

If REEs had NOT appeared then Lithium too would have been massively overpopulated. When it came down to it, there were two REE plays that got across the production line (Lynas and Molycorp) and only two new Lithium plays managed the same feat (Galaxy and Talison) and even in the case of Talison it was the reopening of an existing Lithium mine.

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Niobium Mining – The First Step in Building a Fighter Jet (Palisade Global Investments – June 3, 2016)

https://www.equities.com/

In what was probably the least publicized bidding war in mining history, fifteen companies took part in the sale of Anglo American’s niobium and phosphates operations located in the states Goiás and São Paulo, in Brazil.

In a strategy to alleviate its $26 billion of net debt, Anglo American eventually sold its Brazilian niobium and phosphates businesses to the China Molybdenum Co. Ltd. for a staggering $1.5 billion. The sale was part of a plan to divest more than half of its operations to focus on more prolific projects, and analysts rejoiced as the $1.5 billion price tag was 50% more than the expected sales price.

The niobium and phosphate operations had always been Anglo’s more lucrative divisions, but was a small contributor to the overall bottom line. In aggregate, last year the operations generated $146 million in earnings before interest, taxes, depreciation and amortization (EBITDA), niobium contributing $40 million.

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Appalachian Coal Ash Richest in Rare Earth Elements – by Ken Kingery (Duke University/Pratt School of Engineering – May 27, 2016)

https://pratt.duke.edu/about/news/

Concentrations are highest in coal from the Appalachian Mountains

A study of the content of rare earth elements in U.S. coal ashes shows that coal mined from the Appalachian Mountains could be the proverbial golden goose for hard-to-find materials critical to clean energy and other emerging technologies.

In the wake of a 2014 coal ash spill into North Carolina’s Dan River from a ruptured Duke Energy drainage pipe, the question of what to do with the nation’s aging retention ponds and future coal ash waste has been a highly contested topic.

One particularly entrepreneurial idea is to extract so-called “critical” rare earth elements such as neodymium, europium, terbium, dysprosium, yttrium and erbium from the burned coal. The Department of Energy has identified these globally scarce metals as a priority for their uses in clean energy and other emerging technologies. But exactly how much of these elements are contained in different sources of coal ash in the U.S. had never been explored.

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China plays long game on cobalt and electric batteries – by Henry Sanderson (Financial Times – May 25, 2016)

https://next.ft.com/

Chinese company’s acquisition of Congo cobalt mine has repercussions for car industry

As China Molybdenum announced it was buying one of Africa’s largest copper mines earlier this month one thing was soon clear: the acquisition was about far more than the red metal.

The $2.65bn deal, the biggest private investment in the Democratic Republic of Congo’s history, is instead designed to secure China’s supplies of cobalt, a once niche raw material that is crucial to developing batteries for electric cars.

The purchase of the Tenke mine, which contains one of the world’s largest known deposits of copper and cobalt, shows how Chinese companies are now moving to take a dominant position in battery materials as the country prepares to shift its economy from heavily polluting industries.

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CMOC’s investment in Tenke Fungurume and Kokkola is set to further increase China’s hold on global cobalt – by Edward Spencer (CRU Group.com – May 18, 2016)

http://www.crugroup.com/

Chinese companies have been seeking to diversify their portfolios for a number of years now, unafraid to invest large amounts in overseas and upstream operations. Last week China Molybdenum Co., Ltd. announced that its wholly-owned subsidiary CMOC Limited had entered into a definitive agreement with Freeport-McMoRan to acquire its 56% share of the Tenke Fungurume copper-cobalt mine in the DRC.

The US$2.65B acquisition is China Moly’s second major deal within two weeks, having agreed to buy Anglo American’s niobium and phosphates business on 28th April for US$1.5B.

While many have focused on the phosphate and copper components of these deals, much of the value of these assets lays in their minor metal associations – namely niobium and cobalt. On completion of the acquisitions CRU estimates that China Moly will be the world’s second largest producer of both ferroniobium and cobalt in addition to being the fourth largest producer of molybdenum.

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Why Lithium Isn’t the Big Worry for Lithium-Ion Batteries – by Jason Deign (Green Teck Media.com – June 23, 2015)

http://www.greentechmedia.com/

Why Lithium Isn’t the Big Worry for Lithium-Ion Batteries – Cobalt and nickel bottlenecks are a much bigger threat.

Lithium-ion battery production is more likely to be constrained by cobalt or nickel supplies than by lithium availability, experts believe.

Li-ion battery makers use both metals in greater quantities than lithium, which has been the subject of significant supply concerns as battery production ramps up. In fact, none of these minerals are worryingly scarce in nature.

What troubles some observers, however, is that cobalt and nickel are susceptible to greater supply-chain risks because of the countries that control the resources.

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