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Cobalt, Critical, Strategic and Rare Earth Minerals and Metals

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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Call for greater State participation in mining could lead to conflicts of interest – by Leandi Kolver (MiningWeekly.com – January 17, 2014)

http://www.miningweekly.com/page/americas-home

JOHANNESBURG (miningweekly.com) – Should the State play a larger role in South Africa’s mining sector, as envisaged by the African National Congress’s (ANC’s) 2014 election manifesto and the ‘State Intervention in the Minerals Sector’ (Sims) report, the establishment of an independent regulator would be essential to prevent conflicts of interest, Webber Wentzel head of Africa mining and energy projects Peter Leon said.

In his yearly January 8 statement, ANC and State President Jacob Zuma indicated that the ANC was moving ahead with measures to strengthen the State mining company and to ensure increased beneficiation for industrialisation. This statement was echoed in the ANC’s election manifesto, which stated that “the role of the State-owned mining company will be strengthened”.

Leon told Mining Weekly Online that, while the manifesto did not deal with the issue of the State-owned mining company in detail, the Sims document explained that the State would play a key role by ensuring the compulsory beneficiation of “strategic” minerals at “competitive” and “affordable” prices, and that a more direct role would be played by the State mining company through the “development of strategic minerals” and “supporting, where appropriate, vertically integrated value chains that strengthen strategic industries”.

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Afghanistan’s rare earth element bonanza – by Alan Dowd – Fraser Institute (Mining.com – January 15, 2014)

http://www.mining.com/

After more than a decade of war and nation building, members of the International Security Assistance Force (ISAF) in Afghanistan are heading for the exits. Although what ISAF will leave behind is better than what was there in 2001, Afghanistan remains a battered land. However, the resources Afghanistan’s land holds — copper, cobalt, iron, barite, sulfur, lead, silver, zinc, niobium, and 1.4 million metric tons of rare-earth elements (REEs) — may be a silver lining.

U.S. agencies estimate Afghanistan’s mineral deposits to be worth upwards of $1 trillion. In fact, a classified Pentagon memo called Afghanistan the “Saudi Arabia of lithium.” (Although lithium is technically not a rare earth element, it serves some of the same purposes.)

Of course, the fact that Afghanistan is rich in minerals is not necessarily new information. The Soviets identified mineral deposits in Afghanistan during their decade-long occupation. What is new is the volume and precision of mineral-related information. Afghanistan has been mapped using what is known as “broad-scale hyper-spectral data” — highly precise technologies deployed by aircraft that, in effect, allow U.S. military and geological experts to peer beneath Afghanistan’s skin and paint a picture of its vast mineral wealth. According to Jim Bullion, who heads a Pentagon task force on postwar development, these maps reveal that Afghanistan could “become a world leader in the minerals sector.”

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Jack Lifton refutes WSJ article: ‘How the Great Rare-Earth Metals Crisis Vanished’ – by Jack Lifton (Investor Intel – January 12, 2014)

http://investorintel.com/

The WSJ article published on January 8, 2014 How the Great Rare-Earth Metals Crisis Vanished declares that the “rare earth crisis” is over, and as support refers to the conclusions of a “leaked” Pentagon report. It glibly declares, analyses, and dismisses, as a failure, a Chinese plot to maintain control of the production and pricing of the rare earths as having been defeated by the forces of the market and capitalism.

But the real crisis is that western end-users of rare earth enabled components have proved that if you don’t capitalize the security of supply then when the market turns in your favor you are unprepared to take advantage of it. It is in the naked greed of the stock market where the real rare earth crisis was invented, fomented, sucked dry — and forgotten. The stock market flies no national flag and its players care little for apple pie or mom.

Notwithstanding what this author states there is today no nation other than China that has in place a total domestic rare earth supply chain. Thus even if you do produce rare earths outside of China you must send them to China if you want to first refine mining concentrates and then to fabricate rare earth metals and alloys for use, for example, as magnets. In particular none whatsoever today of the “critical” heavy rare earths are produced outside of China.

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