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Cobalt, Critical, Strategic and Rare Earth Minerals and Metals

The obscure metal that could solve solar energy’s conundrum – by Carl Mortished (Globe and Mail – July 16, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

On the fringes of global stock markets, fascination with materials continues and the latest obscure object of adoration is vanadium, a metal you may have never heard of but which is well known in the steel industry because it does the neat trick of making steel both stronger and lighter.

Add a couple of pounds of vanadium to a ton of steel and you double its strength, a formula that excites Largo Resources Ltd., a Toronto-listed miner that is only weeks away from opening a Brazilian mine that could supply almost a 10th of the worldwide vanadium market in two to three years time.

There are few sources of the metal; China is the big producer and consumer of vanadium, taking more than half of global output. South Africa and Russia currently account for the remainder. China’s hunger for construction steel laced with vanadium is expected to increase as the government grapples with poor building standards, exposed in recent earthquakes and civil engineering disasters.

Aircraft and automobile manufacturers are also falling in love with vanadium’s dual attributes of lightness and toughness. Boeing’s Dreamliner and the Airbus A380 each contain 100 tonnes of titanium-vanadium; Largo says demand for the alloy is rising by 6.5 per cent annually, despite a global steel glut.

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Glencore kicks off $2bn takeover race for Syrah Resources – by Amanda Saunders (Sydney Morning Herald – July 10, 2014)

http://www.smh.com.au/

Swiss commodities giant Glencore is understood to have made an informal approach to Syrah Resources that could value the graphite and vanadium junior at as much as to $2 billion.

Melbourne-based Syrah’s prized asset is the mammoth Balama graphite and vanadium deposit in northern Mozambique.

After the Fairfax Media revealed Glencore’s interest on Thursday, the company’s shares surged as much as 25 per cent before it dived into a trading halt before noon. When shares were halted, Syrah’s shares were up 19 per cent at $5.09. The shares have more than doubled in value since touching a 52-week low of $2 on July 10 last year.

Syrah responded promptly to the report and a share price query from the market operator on Thursday afternoon, saying, “From time to time Syrah receives informal,confidential and non-binding enquiries from various parties regarding Syrah’s interest in entering takeover discussions”.

“None of these enquiries have progressed to formal discussions or resulted in any indicative offers being received by Syrah.”

Sources say Ivan Glasenberg’s Glencore, one of the largest producers of primary vanadium in the world, is keen to exert control over the wider vanadium market. Pouncing on Syrah and ­secur­ing its Balama project would be an early strategic play to shut out fresh competition.

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REPORT: THE RARE EARTH ELEMENTS INDUSTRY IN CANADA ─ SUMMARY OF EVIDENCE – by Standing Committee on Natural Resources (June 2014)

Standing Committee on Natural Resources – JUNE 2014 – 41st PARLIAMENT, SECOND SESSION (Government of Canada report)

INTRODUCTION

In November 2013, the House of Commons Standing Committee on Natural Resources (hereafter “the Committee”) commenced a study on the rare earth elements (REE) industry in Canada. The purpose of this study was to gain a better understanding of the challenges and opportunities related to the development of REE in Canada and around the world. This document summarizes witness testimony presented to the Committee during the course of four meetings.

It is organized according to the following topics: background information on REE and their applications; REE global market, including the role of China in rare earths supply; opportunities and challenges of developing rare earth resources in Canada with a brief overview of current exploration activity; and, ongoing initiatives that support Canada’s REE industry.

PART I — BACKGROUND

A. What Are Rare Earth Elements?

Rare earth elements (REE)1 are a group of 17 metals (including scandium and yttrium), which exhibit similar properties and occur in many of the same mineral deposits. According to Christine Villemure, Director General at Natural Resources Canada, contrary to what the term “rare earths” may suggest, REE are relatively abundant in the earth’s crust.2 However, REE seldom occur in concentrations that are economically exploitable; instead, they are found together with other elements and as a result, are difficult to separate for extraction.3

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THE RARE-EARTHS ROLLER COASTER – by Alastair Gee (The New Yorker – May 24, 2014)

http://www.newyorker.com/

Starting in early 2010, a small Canadian company called Elissa Resources spent more than $1.66 million exploring a hilly scrap of desert dotted with cacti, creosote bushes, and Joshua trees, at the southern tip of Nevada. The company was looking for rare earths: obscure metals with magnetic and luminescent properties which are used in such products as high-efficiency light bulbs, smartphones, and TV screens. The metals are also of enormous value to the defense and renewable-energy industries.

To find them, Elissa Resources employees mapped the landscape and used special devices to figure out where radiation was unusually high. The firm contracted an aircraft to measure the land’s magnetism, surveyed the area from a helicopter, and drilled twenty-one holes to figure out what was down below. But, in 2013, Elissa Resources halted major work at the site. A slump in the rare-earths market has made it hard to attract the investment needed to continue the investigations.

Most of the world’s rare earths are mined in China. In recent years, amid fears that China’s control of the market could jeopardize Western strategic interests, firms such as Elissa pursued deposits elsewhere—in the United States, Kyrgyzstan, Namibia, Vietnam, Greenland, Australia, and other countries. A boom was on. “A geologist would pick up a rock, lick it, and say, ‘Oh, I’ve got rare earths,’ and suddenly you’ve got a rare-earths company,” Gareth Hatch, a co-founder of the market-intelligence firm Technology Metals Research, said. The industry acquired an air of glamour, thanks to the futuristic uses of the metals, and a moniker suggestive of preciousness.

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Throwing stones in a glass Dacha: The West’s metal vulnerabilities – by Christopher Ecclestone (Mineweb.com – April 4, 2014)

http://www.mineweb.com/

Christopher Ecclestone of Hallgarten & Company addresses supply issues the West faces with Russia as adversary.

LONDON – Some have accused the EU and U.S. of soft-pedaling on the Crimea/Ukraine issue. But might these economic powers think twice before stirring up too much of a ruckus? The EU is particularly vulnerable to Russia cutting off natural gas exports and the U.S. has to play nice with Russia to keep getting cheap uranium supplies.

According to the US Energy Administration, in 2011 the United States mined nine percent of the uranium consumed by its nuclear power plants. The remainder was imported, principally from Russia (50%), Canada, and Australia. As uranium bulls will ceaselessly inform you the supply situation is tight and if it wasn’t for those pesky Russians the price would be a lot higher.

We usually do not make common cause with the tin-foil-hatted but would beg to agree with the uranium bulls. It is a truism that the unwinding of the Soviet stockpiles have beggared the global uranium mining industry and that the great day will be when an end to this attrition is seen.

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Time to make Canada free of conflict minerals – by Paul Dewar (Toronto Star – April 03 2014)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Paul Dewar, New Democratic Party MP for Ottawa Centre riding, is the Official Opposition’s Foreign Affairs critic.

Today (Thursday, April 3) the House of Commons is to begin debating my bill C-486, the Conflict Minerals Act.
The illegal trade of conflict mineral from the Democratic Republic of the Congo and other parts of central Africa has been funding and fueling the deadliest war since the Second World War. The Conflict Minerals Act is a significant and proactive step toward ending the trade of conflict minerals and eventually ending the war.

The scale of the crimes in the Congo, and the connection between consumers and the conflict, is shocking. More than five million people have been killed. Rape is used as a weapon of war – with an estimated 48 women raped every hour. In 2012, there were 2.2 million people displaced and driven away from their homes.

Bill C-486 is part of an international trend to end the trade in conflict minerals and improve consumer awareness of product supply chains. The aim is to cut off the financial resources that sustain the horrors of war in the Congo. 

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Strategic metal mining set to gain traction in Britain – by Harpreet Bhal (Reuters U.S. – April 2, 2014)

http://www.reuters.com/

LONDON, April 2 (Reuters) – Mining firms are looking favourably at Britain as a project destination with deposits of strategic metals leading a small mining revival following the launch of the country’s first new metal mine in 45 years.

The UK has deposits of metals such as tin – used in mobile phones, and tungsten – used to make drilling tools – as well as antimony and tellurium – used in the semiconductor industry – seen as having bullish long-term price outlooks as the appetite for electronic gadgets expands in the developing world.

The southwest counties of Cornwall and Devon experienced extensive mining in the 19th century when metals including copper, lead and tin were keenly sought, but fierce competition from lower cost operations in Latin America, Asia and Africa resulted in projects being shut and many sites abandoned.

While analysts said it is unlikely for Britain to experience another mining boom, the country is being eyed by some as a favourable destination due to competitive labour costs and tax rates, as well as deposits of strategic metals – a vital component in technology and industry.

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Tesla to Use North American Material Amid Pollution Worry – by Asher Berube (Investor Intel – March 31 2014)

http://investorintel.com/

March 31, 2014 (Source: Bloomberg) — Tesla Motors Inc. (TSLA), the electric vehicle maker co-founded by Elon Musk, plans to use only raw materials sourced in North America for its proposed $5 billion U.S. battery factory.

The Silicon Valley company won’t look overseas for the graphite, cobalt and other materials needed for its so-called Gigafactory, said Liz Jarvis-Shean, a spokeswoman.

“It will enable us to establish a supply chain that is local and focused on minimizing environmental impact while significantly reducing battery cost,” she said in an e-mail.

The move comes amid heightened interest in curbing graphite pollution and a widespread corporate sensitivity about avoiding the use of industrial minerals from global trouble spots such as central Africa. China’s government, for example, has begun to shutter mines producing graphite, a major ingredient in lithium-ion batteries, over air-quality issues, Bloomberg News reported March 14.

Tesla “is a high-profile company that is entering an age of supply-chain transparency,” said Simon Moores, an analyst at Industrial Minerals Data in London.

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Geopolitical tensions a reminder for the West to seek greater rare earths independence from China – by Alessandro Bruno (Investor Intel.com – March 11, 2014)

 http://investorintel.com/

There are two geopolitical disputes that could have significant effects on the prices of strategic commodities. The first is in Crimea, involving Russia, the Ukraine and NATO; the second is in the Sea of Japan (also known as East China Sea) and it involves China, Japan and not so indirectly the United States. A mathematician might reduce the two issues to one geopolitical equation: Russia and China vs. the West (that is the USA, the European Union and Japan). The Crimean crisis will likely cause grain and other agricultural prices to increase, which will in turn strengthen mineral fertilizer prices.

The Sino-Japanese crisis over control of the Senkaku/Diaoyu islands, which intensified in 2012, when Japan decided to formally annex the territory, meanwhile has grown deeper and will inevitably affect Japan’s access to much needed rare earth products from China. China’s minister of foreign affairs stated, last week, that “there is no room for compromise” with Japan over the Islands.

He added that China would maintain a decisive stance in matter of territorial integrity and sovereignty and that it would defend “every inch of the territory that belongs to us”. China is also at odds with other Asian neighbors, triggered by spats over territorial control in the South China Sea. In the latter case, the triggers are both natural resources in the disputed sea areas and the control of important waterways.

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Tesla battery plant will need 6 new flake graphite mines – by Simon Moores and Andy Miller (Industrial Minerals – March 7, 2014)

http://www.indmin.com/

$5bn ‘gigafactory’ to spark EV uptake; battery graphite demand could double in 6 years with no growth elsewhere

US automotive giant, Tesla, has revealed plans to build a new $5bn lithium-ion battery (Li-ion battery) ‘gigafactory’ which could potentially increase natural graphite demand by up to 37% by 2020.

The factory, which is forecast to start production by 2017, is expecting to have an output of 35 gWh/year by as early as 2020, which would over double the size of the current market. Its important to stress that the plant is in the planning stage and capacities depend strongly on market demand, but Tesla believes it can be the market leader by producing low cost batteries in the USA.

In IM Data’s calculations, Tesla’s plant – which is set to be based in the south-west USA – will consume at least 28,000 tonnes of spherical graphite every year if operating at capacity. This equates to 93,000 tonnes of flake graphite if produced to today’s standards which sees raw material wastage of up to 70%.

If achieved, battery demand for natural graphite will increase 112% from today’s levels of 83,000 tpa. This is assuming no other growth in regions such as Asia which is today’s primary consuming region.

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Rare Earths gloom seems to be lifting – Ecclestone – by Dorothy Kosich (Mineweb.com – February 6, 2014)

http://www.mineweb.com/

While rare earths have behaved more like scorched earth in recent years, Hallgarten’s Christopher Ecclestone suggests, “The nadir of the sector is now past.”

RENO (MINEWEB) – In analysis published Wednesday, Hallgarten & Company’s Christopher Ecclestone suggests, “The storm of the last two years has winnowed the wheat from the chaff (largely) in the REE space.”

“The two bulk producers managed to get into production after a titanic struggle and have been rewarded for their perseverance with relatively lowly market caps,” he noted, adding that the fact Lynas and Molycorp have started churning out light rare earths products “are undermining Chinese dominance in some metals.”

Meanwhile, “Tensions between Japan and China over disputed islands may yet be the touchpaper to set REEs and other specialty metals alight,” he speculated.

Nevertheless, Ecclestone suggested that “the behemoth properties with gargantuan capex budgets have gone the way of the brontosaurus.

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COLUMN-Critical minerals and mining reform in the U.S.: Kemp – by John Kemp (Reuters U.S. – January 31, 2014)

http://www.reuters.com/

Jan 31 (Reuters) – Critical minerals like rare earths, lithium and tellurium are becoming ever more essential to the modern economy, yet production in the United States remains limited, leaving the country relying on imports from just a handful of countries led by China.

For many of these materials, there are few substitutes, raising obvious concerns about supply security. It wasn’t always this way. The United States was once the world’s leading producer of rare earth elements (REEs). However, mining at its Mountain Pass facility was largely suspended between 1998 and 2010 owing to environmental concerns.

China came to dominate production in the 2000s. Beijing’s decision to impose export restrictions on REEs, tungsten and molybdenum in 2011 and 2012 to reserve more of them for domestic manufacturers underscored the supply chain’s vulnerability and drew protests from the United States, the EU, Canada and Japan, as well as a complaint to the WTO.

Since then, Mountain Pass has reopened, following the construction of a new $1.55 billion processing facility by its owners Molycorp. New sources of supply are also becoming available from Mount Weld in Australia.

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Lack of critical minerals processing capacity U.S. ‘Achilles heel’ – Wyden – by Dorothy Kosich (Mineweb.com – January 29, 2014)

 

http://www.mineweb.com/

U.S. Senate leaders say the nation must address inadequate U.S. mining processing capacity as well as promoting domestic mining of critical and strategic minerals.

RENO (MINEWEB) – During a U.S. Senate hearing Tuesday on S. 1600, the Critical Minerals Policy Act of 2013, Senate Energy and Natural Resources Committee Chairman Ron Wyden, D-Oregon, noted, “A crucial but too often neglected part of this [U.S. critical minerals] supply conversation is mineral processing.”

“Although mining is an important part of the supply equation, and S. 1600 encourages federal agencies to expedite permitting for new critical minerals extraction, it is the lack of processing capacity—transforming the raw materials that we pull out of the ground into the high-purity compounds needed for manufacturing—it is that challenge that is my concern and the concern of many experts,” he observed.

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Opposition to Critical Minerals Policy Act is misguided – by Colin T. Hayes (Alaska Journal of Commerce – January 9, 2014)

http://www.alaskajournal.com/

Colin T. Hayes is an executive vice president at McBee Strategic Consulting and formerly served as senior professional staff to Sen. Lisa Murkowski on the U.S. Senate Committee on Energy & Natural Resources.

As someone deeply familiar with Sen. Lisa Murkowski’s leadership on the “Critical Minerals Policy Act,” John Kemp’s Dec. 9 Reuters column criticizing the bill struck me as a cynically misguided reaction to her important work.

Sen. Murkowski introduced the legislation in order to, as she put it, “keep the United States competitive and begin the process of modernizing our federal mineral policies.” This is a laudable goal and an important process, particularly as our foreign reliance increases for materials needed to build semiconductors, skyscrapers, and everything in between.

In Kemp’s view, however, the bill “deserves to die” because it would authorize new federal funding that he views as a sop to “special interests.” With all due respect, he’s wrong.

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INTERVIEW-Greenland eyes mines as melting ice cap unlocks mineral riches – by Balazs Koranyi (Reuters India – January 21, 2014)

http://in.reuters.com/

TROMSOE, Norway – Jan 21 (Reuters) – Greenland will push ahead with a uranium and rare earths mine despite the objections of its former colonial ruler and main benefactor as the melting of the polar ice cap unlocks the country’s natural resources, its prime minister said.

Arctic Greenland, with the lowest population density in the world, could open its first big iron ore mine in five years and award the first rare earths exploitation licence by 2017, hoping for riches that could attract thousands of workers and leave the locals in a minority, Aleqa Hammond told Reuters.

“We simply refuse to go under as a culture because of climate change,” Hammond, 48, said on Tuesday on a visit to Norway. “We have to adapt because the ice is disappearing and hunting is no longer the main source of income.

“But climate change gives us a new chance to survive because our minerals become accessible so we’ll adapt,” Hammond, an Inuit woman brought up to skin seals, said. “We are one of the very few countries around the world where climate change is giving us benefits.”

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