Tesla and the mining business – by Don Brunell (The Star – September 16, 2015)

http://www.grandcoulee.com/ Grand Coulee Dam Community

Tesla is the premium entry in the electric car market, with a starting price of $75,000. According to the Wall Street Journal, the high-end “Signature” model costs $132,000, slightly more than the base price for Porsche’s AG’s 911 GT3.

Even with a $7,500 federal tax credit, an assortment of state tax credits, and $10,000 in fuel saving over five years, the driver’s investment is over $110,000 – far beyond the reach of the average family.

However, Tesla’s luxury styling and impressive performance give high-end buyers the best of both worlds – luxury transportation and the satisfaction of environmental stewardship. In that light, it might surprise some that Tesla’s success depends, in large part, on lithium mining.

Tesla cars are made of carbon fiber and powered by racks of lithium-ion batteries. Strong, light, and cost-efficient, carbon fiber is being used increasingly by commercial airplane manufacturers. On board Boeing’s 787, the batteries are lithium-ion as well.

Like Boeing and Airbus, auto manufacturers are under economic and regulatory pressure to produce more fuel-efficient products.

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Collapsing Fanya Metal Exchange in China raises concerns about minor metals – by Peter Koven (National Post – September 2, 2015)

The National Post is Canada’s second largest national paper.

The potential collapse of a Chinese commodity exchange could put more pressure on prices for rare earths and other minor metals in which investors have already suffered tremendous losses over the past several years.

Last week, furious investors kidnapped Shan Jiulang, head of the Fanya Metal Exchange, at a Shanghai hotel and turned him over to police, according to the Financial Times. It capped a debacle in which the Fanya exchange ran into liquidity problems and stopped paying out money on its investment products. Roughly US$6.4 billion of investor funds were frozen, according to estimates.

Now the risk is that Fanya will liquidate its vast holdings of minor metals, a move that could crush the highly illiquid markets for these products and harm Canadian companies in the space.

Of course, that assumes Fanya’s reported holdings are accurate. Investors treat everything this exchange says with skepticism after its rapid flameout.

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Lynas CEO Digs In as Rare-Earth Prices Slump – by Rhiannon Hoyle (Wall Street Journal – September 1, 2015)

http://www.wsj.com/

CEO Amanda Lacaze says it is time for Lynas to invest more in sales and marketing to grow the business

SYDNEY—As rare-earths miner Molycorp Inc. looks to wind down production at its U.S. mine, Lynas Corp. Ltd., the only other producer outside of China, hopes to do the opposite and raise its output of elements used in batteries, magnets and other high-tech products.

To accomplish that goal, the Australian-listed miner plans to do one crucial thing: “Go out there and sell,” said Chief Executive Amanda Lacaze, in an interview.

Lynas, a former market darling, has found it tough to become a major competitor in the global rare-earths market.

The company was founded with an eye to breaking China’s stranglehold on the industry: The world’s second-largest economy has accounted for more than 90% of world-wide supply in recent times. But it took nearly a decade of development before Lynas began operations at its refinery in Malaysia’s Pahang state in late 2012.

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Critical Metals: The West is sleepwalking to its economic decline – by Robin Bromby (Investor Intel.com – August 4, 2015)

http://investorintel.com/

Anne-Marie Brady, professor at the School of Social and Political Sciences at the University of Canterbury in the New Zealand city of Christchurch, specializes in China, and has since 2008 been researching Chinese interests in the polar regions. Some time ago she saw on a Chinese website a map of Antarctica’s mineral resources. After she revealed her find, the map was swiftly removed.

She will in October be delivering a lecture on the subject of “China as Polar Great Power”, which is also the title of her forthcoming book. She says Chinese literature is “very, very clear about China’s interests in Antarctic minerals”. And everyone else’s.

Reading Jack Lifton’s incisive summation of the global rare earth situation posted on InvestorIntel yesterday, and the West’s continuing weakness in that sector, it occurred to me that this is part of a much wider problem. As Jack wrote, the strategy being followed by Chinalco involves a concerted, well-planned consolidation of Chinese interests.

And he added: “While American, European, Brazilian, South African, and Australian rare earth producers and juniors squabble with each other and promote their share prices as their only hope of raising new capital in a market dominated by China’s use … of the majority of the world’s rare earths as well as the majority of all metals, Chinalco is methodically planning to diversify its sources of raw materials and to seek out technology sales or purchases to improve its efficiencies.”

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Our Demand For Renewable Energy Comes With Canada’s Dirty Little Secret – by Blair King (Huffington Post – July 22, 2015)

http://www.huffingtonpost.ca/british-columbia/

There is something very important that most people don’t know about renewable energy technologies. While many of these technologies have existed since humanity started to harness the power of the wind and the sun to help us do work, they all owe their current capabilities to the existence of rare earth elements.

Neodymium, dysprosium, lanthanum, cerium sound like the names of some magical characters in Peter Jackson’s latest Tolkien adaptation but they’re actually the names of rare earth elements. Rare earth elements and a handful of other elements (like lithium and platinum) are the “magic” ingredients that make our modern renewable energy technologies possible.

  • Neodymium is secret sauce that makes high-power permanent magnets a reality. Those magnets are what allow a wind turbine to convert the power of the wind into electricity.
  • Dysprosium allows these permanent magnets to operate at the high temperatures critical for the operation of large wind turbines and electric vehicles.
  • Lanthanum and Cerium are what make catalytic converters work.

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[Rare Earth Metals] The dystopian lake filled by the world’s tech lust – by Tim Maughan (BBC.com – April 2, 2015)

http://www.bbc.com/

Hidden in an unknown corner of Inner Mongolia is a toxic, nightmarish lake created by our thirst for smartphones, consumer gadgets and green tech, discovers Tim Maughan.

From where I’m standing, the city-sized Baogang Steel and Rare Earth complex dominates the horizon, its endless cooling towers and chimneys reaching up into grey, washed-out sky. Between it and me, stretching into the distance, lies an artificial lake filled with a black, barely-liquid, toxic sludge.

Dozens of pipes line the shore, churning out a torrent of thick, black, chemical waste from the refineries that surround the lake. The smell of sulphur and the roar of the pipes invades my senses. It feels like hell on Earth.

Welcome to Baotou, the largest industrial city in Inner Mongolia. I’m here with a group of architects and designers called the Unknown Fields Division, and this is the final stop on a three-week-long journey up the global supply chain, tracing back the route consumer goods take from China to our shops and homes, via container ships and factories.

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Lifton on asteroid mining rare earths and Molycorp’s Mountain Pass – by Jack Lifton (Investor Intel – July 20, 2015)

http://investorintel.com/

Some rules don’t change. But that doesn’t mean that our poorly educated journalists have to know of them or even have to understand them, when they are described or applied. One rule, frequently swept under the rug by junior mining promoters eager to take advantage of journalistic ignorance can be stated as:

“In order for any deposit to be developed into a profitable mine the infrastructure to access it must already exist, or, if not, then its costs must be included in the feasibility study.”

Trivially this means for example no commercial mining until I can get to the deposit and either process the material to a commercial form at the site or move it to a processing site without logistics’ costs destroying the project economics.

A corollary of the above “rule” is that the cost of infrastructure must be quantified and covered before the project enters development. Now, the above rules of economics having been stated let’s get to what I am talking about today.

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Time to Tackle Rare Earth’s Toxic Underbelly – by Matthew J. Kiernan (Huffington Post – July 9, 2015)

http://www.huffingtonpost.com/business/

Matthew J. Kiernan is the Founder and Chief Executive of Inflection Point Capital Management

On April 2, 2015, the BBC ran an investigative report that illustrated rare earth mining’s trail of destruction. Whilst it was not the first time that the toxicity of rare earth mining had been the subject of scrutiny, the graphic portrayal of a man-made toxic lake on the outskirts of Baotou in Mongolia, should be a wake-up call for consumers of digital TVs, computers and smart phones, which are the major users of rare earth elements.

BBC’s piece was written by Tim Maughan, who had received support from Unknown Fields Division, an NGO that has a track record of going to the farthest flung regions of the world to uncover hidden secrets. It is estimated that Baotou is the centre of production of half of China’s rare earth elements, with one tonne of rare earth elements producing 2,000 tonnes of toxic waste.

Baotou’s toxic lake raises the important question; how is that such important commodities continue to be mined with such low environmental standards? Rare earth mining has long been dominated by China, which up until recently produced over 90 percent of global production.

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Fate of global rare earth miners rests on China smuggling crackdown – by David Stanway (Reuters U.S. – July 7, 2015)

http://www.reuters.com/

BEIJING – The fate of debt-ridden U.S. rare earth miner Molycorp rests on China’s efforts to crack down on networks that smuggled as much as 40,000 tonnes of the vital technology metals out of the country last year, driving down global prices.

Greenwood, Colorado-based Molycorp is the sole U.S. domestic supplier of rare earths used in everything from smartphones to military jet engines and hybrid vehicles. In 2011, it relaunched its huge Mountain Pass mine in California expecting prices to stay high after China, which dominates world supply, restricted exports. Last month it filed for bankruptcy protection as operating losses mounted.

Customs police in the eastern Chinese port of Qingdao last month arrested five traders following a nine-month investigation into a rare earth and ferromolybdenum smuggling ring worth nearly $18 million.

That was no one-off. Chinese authorities have been struggling since 2010 to smash an illegal supply chain in which rogue miners deliver ores to unauthorized separation facilities, with the finished products then disguised and shipped abroad.

“Traders go through all kinds of channels and make false product declarations at customs – marking it as alumina or even washing powder,” said Chen Zhanheng, vice-secretary general of the Association of China Rare Earth Industry.

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Avalon banks on new ‘blood metals’ rule for Canada’s tin mine success – by Cecilia Jamasmie (Mining.com – June 30, 2015)

http://www.mining.com/

Canada’s Avalon Rare Metals (TSX:AVL), until now mostly known for its incursion in the rare earths market, is proceeding with a $1.3 million work program in South-western Nova Scotia to reopen a historic tin-indium mine.

The company, working on completing a Preliminary Economic Assessment (“PEA”) for the project by November this year, is betting on recently approved legislation in Europe, which bans all products containing conflict minerals from war zones in Africa.

Speaking at the 128th Annual Meeting of The Nova Scotia Mining Society late in June, Avalon’s President and CEO Don Bubar said the European Union anti “blood metals” rules, together with the U.S. Dodd-Frank Act, which forces US stock exchange-listed companies to disclose the use of minerals from a conflict zone in their supply chains, gives Avalon’s tin project huge advantages.

The miner was granted a special exploration licence to search 22 claims totalling 356.12 hectares. It also received a $40,000 project grant from the province earlier this year to assist with test drilling.

“We’re hopeful, at this point,” Natural Resources Minister Zach Churchill told MINING.com in an interview mid-June, adding that since market prices for tin have improved, the Nova Scotia government is optimistic about the prospects at the location.

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Molycorp Files for Bankruptcy Protection – by John W. Miller and Anjie Zheng (Wall Street Journal – June 25, 2015)

http://www.wsj.com/

Rare-earths miner reaches agreement with major creditors to restructure its $1.7 billion debt load

Molycorp Inc. filed for bankruptcy protection on Thursday, becoming the biggest corporate failure in a bleak year for a mining industry hit by slumping commodity prices and waning demand from its biggest customer, China.

The Greenwood Village, Colo., company, the sole U.S. miner and producer of rare earth elements, said it had secured an agreement with creditors to restructure its $1.7 billion in debt, and obtained $225 million in new financing to continue operations. It expects to have a court-approved restructuring plan by the end of the year.

The filing marks a sharp reversal of fortunes for a company that rode a boom in rare earths, amid a broader surge in commodities prices. Fueled by restrictions on exports of rare earths by China, the world’s dominant supplier, Molycorp’s market value rocketed to over $6 billion five years ago.

But China then relaxed its rules, and battery and magnet makers found alternatives to rare earths, sending Molycorp into a long slide. It hasn’t turned a profit since 2011. 

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The darker side of solar power – by Konrad Yakabuski (Globe and Mail – May 28, 2015)

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.

The Saudi Arabian oil minister’s recent comment that the world’s largest petroleum producer sees a postfossil-fuel world in which his country becomes a solar-power superpower must have comforted climate activists that even the worst offenders can come around. After all, what could be more redemptive than turning abandoned oil fields into solar farms?

Solar power’s image as “clean” and “limitless” has led princes and politicians alike to dole out huge subsidies to bask in its glow. Under the 2009 Green Energy Act, Ontario agreed to pay solar power operators as much as 10 times the market rate for the electricity they produce under 20-year contracts.

Not satisfied with risk-free deals that will make many solar players rich at consumers’ expense, Ontario’s solar industry is now lobbying for even more. And it’s leveraging solar’s apple-pie image to press politicians into giving it what it wants.

On Tuesday, the Canadian Solar Industries Association (CanSIA) released a poll purporting to show that three-quarters of Ontarians “would like to see the government invest more in solar powered electricity and in technologies that enable solar power.”

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Mining Investments in Chile to Soar Over the Next Decade – by Anne Lu (International Business Times – June 11 2015)

http://www.ibtimes.com.au/

Chile will continue to be the most attractive Latin American country to foreign mining investors, as mining investments in the country are expected to reach a value of about US$64 billion [$82 billion] by 2025, said state copper commission Cochilco.

Cochilco head Alex Matute Johns noted that Chile’s copper output is expected to jump up to around eight million tons per year by 2025. He also predicted that foreign investments would soar from US$23 billion last year to about US$28 billion by 2017. State-owned copper giant Codelco is expected to carry out 47 percent of Chile’s portfolio of planned mining investments.

But aside from copper, Chile is also a top producer of titanium, with the likes of White Mountain Titanium Corporation (OTCQB: WMTM) operating in northern Chile’s Atacama region. Its flagship Cerro Blanco project currently consists of 41 registered mining exploitation concessions and 34 mining exploration concessions over approximately 17,041 hectares of mineral sand. As of March 2015, nine prospects have been identified along a four-kilometre strike length, with an estimated rutile resource of 112 million tonnes at 1.73 percent titanium dioxide and 69 million tonnes at 1.37 percent titanium dioxide.

Another Chilean mining company, Mineria Activa, aims to develop Chile’s rare earth minerals market based on a recent survey that showed that there are major concentrations of neodymium and dysprosium south of Chile’s capital, Santiago.

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The uncomfortable choice with solar power and raw material sourcing – by Chris Berry (PV-Tech.com – June 8, 2015)

http://www.pv-tech.org/

Chris is a well-known writer, speaker, and analyst. He is the co-author of The Disruptive Discoveries Journal (www.discoveryinvesting.com) and focuses much of his time on energy metals – those metals or minerals used in the generation or storage of energy.

Despite the hope and promise that solar power holds out as a cleaner source of long-term electricity generation, it is not without its problems. As the price of solar power continues to fall based on increased scale of production and innovation, these advances are underpinned by something often overlooked – a reliable source of raw materials.

When you’re using your computer or phone, do you ever stop and think about the source of the minerals and materials which provide the technology we often take for granted? So it is with solar power.

Every day we open the newspaper and read an article about another consumer or business adopting solar technology based on increasingly competitive economics. But how are these economics achieved? This is an often overlooked question and has recently become more important.

In recent years, China, the “workshop of the world”, has offered low labour costs (though this is changing) and raw materials for high-value products have been sourced from Asia and Africa, in particular – areas with relatively lax environmental standards.

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Chileans Bet Apple Will Pay a Premium for Clean Rare Earths – by Eduardo Thomson (Bloomberg News – June 2, 2015)

http://www.bloomberg.com/

The future of rare-earth minerals used in everything from iPhones to Tomahawk missiles lies under the pine plantations of southern Chile, and in a secret formula, according to closely held junior miner Mineria Activa.

Elements such as neodymium and dysprosium are contained in clays near the city of Concepcion in concentrations similar to those found in southern China, which has all but cornered global supply until now. The similarities end there, Arturo Albornoz, who heads Activa’s Biolantanidos project, said in an interview.

While operations in China typically pump ammonium sulfate into the ground and wait for the chemical to seep out with the minerals, at Biolantanidos the plan is to dig out the clay, put it through a tank-leaching process with biodegradable chemicals and return it cleaned to the ground, replanting pine and eucalyptus trees.

It may be laborious, but Albornoz is hoping companies such as ThyssenKrupp AG, Apple Inc. and Tomahawk cruise missile maker Raytheon Co. will end up paying a premium, knowing their suppliers aren’t destroying the planet.

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