Rare earth prices slight fluctuations this week, mainly light, lanthanum, cerium, yttrium oxide market transaction price down. Praseodymium, neodymium, gadolinium alloys and oxides of market prices remained strong.

The gradual increase in the supply of foreign markets, has also been the resumption of production in the domestic Big Three, small and medium-sized enterprises have been looking for goods shipped in the traditional sales season in March, the market gradually active signs. Deserted February, March, manufacturers and trade slightly busy. No matter the market inquiry how lively, the industry is more than reflect, the market traded just slightly better than February, "high season" yet arrived. As far as we know, the rare earth hold stocks and more depending on the purchases and sales of inventory and the market price of some products, such as the current market oxide, praseodymium, neodymium, gadolinium oxide recent inquiries and procurement increased, the price steady bullish. Of neodymium oxide, erbium, yttrium Inquiries less cargo operators who offer slightly downstream. This week the lanthanum cerium class oxides turnover in general, the transaction price is lower than in February. Oxide, europium, terbium market turnover less stable, offer basic.

Alloy market such as praseodymium, neodymium, gadolinium-ferrous market tax price of basic remain unchanged, and individual cargo operators to raise its offer, and also not too out of the mainstream of the market price, the gadolinium iron prices slightly upstream excluding tax, dysprosium iron prices this week basically stable.
 

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Peak Resources Limited reported further improvements to beneficiation processes for the Ngualla Rare Earth Project in Tanzania. The ability to concentrate mineralisation at an early stage prior to acid leach recovery will have a significant and positive impact on costs and support Peak’s target to be a low cost producer.

The optimisation of the beneficiation process effectively reduces the mass of feed to be treated by the acid leach recovery process by 43% compared to the scoping study assumptions. This will lead to significantly lower capital and operating costs for the operation.

The latest test work shows that conventional magnetic separation and flotation techniques reduce the mass of the feed mineralisation by 78% through the rejection of relatively unmineralised barite and iron oxides.

Reducing the amount of material processed at the acid leach recovery stage has a significant impact on operating costs by reducing sulphuric acid consumption – the major constituent of reagent costs. The scoping study completed in early December 2012 estimated that the acid plant and acid leach recovery circuit make up 53% of total operating costs.

The reduction in volume treated will also reduce capital costs as a smaller plant will be required for the same amount of product. The acid leach recovery circuit and the acid plant together constitute 27% of total project capital costs as estimated in the scoping study.

The beneficiation process increases the grade of the feed over 3 fold from 5.3% REO* to 16.9% REO for this composite sample.

The cost reductions will be quantified in a revision of the scoping study and economic assessment to be completed in Q2 2013. The revised study will also use a new optimised mine schedule based on the new Mineral Resource estimate and model that is on schedule for completion by the end of March 2013.

Peak Resources Managing Director Richard Beazley said “Ngualla continues to improve with each milestone. We are already in the lower quartile in terms of operating costs, and also have one of the lowest capital costs of any rare earth project. This new test work will allow us to reduce costs even further and supports our assertion that Ngualla is the most commercially attractive rare earth project around.”

                   


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Cavan Ventures Inc. is pleased to announce that it has been granted an option to acquire four prospective new mining properties covering graphite occurrences and with a potential for rare earth elements.

The four properties are located in Quebec, Canada, and are all easily accessible by paved or gravel roads and close to infrastructures.

The Pierre Riche North and South claims are located at about 130 km southwest of Saguenay-Chicoutimi, and about 70 km north-northwest of La Tuque. The Trans Canadian railroad line used by the Canadian National Railroad passes just 45 km south of the claim groups.

Pierre Riche North comprises 31 map-staked claims covering 1,705 hectares (4,213 acres). The property covers granitic gneiss, anorthosite, calcsilicate rocks, paragneiss and metasediment. Mafic gneisses contain disseminated sulphides and pockets of pyrite and graphite. Historically, the graphite flakes were mistaken for molybdenite. Anomalous values of copper, nickel, zinc, vanadium and manganese were obtained from a 0.80 m long channel sample.

Pierre Riche South comprises 11 map staked claims covering 605 hectares (1,495 acres), with the same lithologies as on the North claims. Anomalous values in copper, nickel, manganese, strontium and barium were obtained from one-meter long channel samples. This property presents an excellent potential for graphite in flakes and rare earth elements in pegmatite and mafic gneiss.

Two additional mining properties are located in the Upper Gatineau River region in the western part of Quebec, and about 70 km south of the Company’s Pythonga Lake Rare Earth Element project.

The Cawood and Saint-Marie properties are located at about 65 km north of Ottawa, and accessible by paved roads. Infrastructure in this region is excellent for a mining operation. Cawood comprises 10 map staked claims covering an area of 550 hectares (136 acres). This property has potential for graphite, mica, apatite and rare earth elements. It is located in the Maniwaki Metasedimentary Basin, well known for its graphite deposits and base metal occurrences (Pb-Zn) associated to calcitic and dolomitic marbles. In the past, numerous small graphite occurrences were mined by open-pits which are still accessible.

The Sainte-Marie property comprises 11 map staked claims covering an area of 605 hectares (1,495 acres). Several graphite occurrences exist on the property and there is also potential for rare earth elements. Six graphite occurrences were studied during a mapping program. Most have returned values higher than 3% graphite in quartz-feldspar gneisses of the H Unit. One occurrence returned 25% graphite over one meter in a shear zone.

The four mining properties were acquired from three well-renowned prospectors. CAVAN can earn a 70% interest in the four mining properties by issuing the optionors a total of 1,500,000 shares over a period of two years and making two cash payments totalling $35,000 of which $15,000 is payable upon signing. The Company must spend a minimum of $60,000.00 during the first year of the agreement. Claims are subject to a 2% net smelter return of which the Company may buy back 1% for the sum of $1,500,000 and has the first right of refusal to purchase the balance of the royalty as well as the remaining 30% interest. The acquisition of the claims is subject to acceptance by the TSX Venture Exchange.


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Why do some people take a risk to extract rare earth illegally? And what impacts will illegal extraction bring to the environment and residents nearby?

This area began rare earth extraction since some time between May and June last year, according to people living in the neighbor. The illegal work site cover an area of 4 to 5 acres,there are physic permeating separation pool and reaction pool, where fills with acid liquids like oxalic acid, semi-finished product of extracted rare earth was put nearby. Exhausted gas and liquid generated by chemical reaction are actually been discharged directly, red liquid can be detected everywhere is some cannels in lower reaches. Residents complain that vegetables have been polluted.

It is said that, the extraction of rare earth is rather complex, besides, the content of rare earth is quite small in raw ores. Even though, rare earth is a kind of material that is of strategic importance to a country, in addition the price of rare earth is very high, that is why many people will take risk to extract rare earth secretly. But the extract consumes a large number of water. To make it easier to get water and exhaust waste water, work sites are usually located near water source or reservoir.

Dr. Wen of Applied Chemistry Department , Shenzhen University said that waste water exhausted after the extraction of rare earth contains acid and waste residue which are toxic and could be harmful to peripheral environment.   

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In the last 20 years, the importance of rare earth elements has skyrocketed due to three main factore:

High demand: An increasing global demand for new products and emerging technologies that use rare earth elements(REE).
Uncertain supply: China, the world's largest source of rare earth materials at the present time, has begun to reduce quotas on its REE exports, combat smuggling and also close some of its major mines. Currently, China provides over 90 percent of the world's total output of rare earths.
No substitutions: The unique electronic, optical and magnetic characteristics of these elements cannot be matched by any other metals or synthetic substitutes.

Combined, these three factors have raised a growing level of concern that other rare earth mining sites need to be found outside of China, explored and brought online in short order.

There are 17 classified rare earth elements and prices vary widely with heavy rare earths historically commanding significantly higher prices than light rare earths. Several of these elements can fetch extremely high prices depending on their scarcity and commercial applications. Europium, terbium and dysprosium have been recently priced in the range of $1,400 - $3,500/kg. HREE prices are likely to remain significantly higher than recent historical levels, given the fact that few new sources of supply for these materials will be available before 2015.

Less expensive rare earths like lanthanum and cerium (the prices of which currently hover around US $20-30/kg) are extensively used in modern technology, such as the manufacturing of catalytic converters that automobiles require.

Many of the high tech devices enjoyed by the western world need rare earths to work. Consumer smartphones, TVs, batteries, computers, medical equipment, even some of the critical components in nuclear reactors depend on rare earth elements for their operation.

This widespread need for REE in global manufacturing ensures a constant commercial hunger for these metals for the foreseeable future. While prices have been dropping since peaking in July 2011, they still remain well above historical levels.

                


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There are 17 elements found on the earth that are classified as rare earth elements (REE). While the word "rare” may make you think that these elements are scarce, they are in fact found all over our planet but typically in small amounts. The term "rare earth” comes from their initial discovery in which only tiny portions of these minerals could be isolated from larger quantities of still more common elements.

Today, "rare earth” is used to describe any of the 15 metallic chemical elements with atomic numbers from 57 to 71 (called "lanthanides”) and the chemically similar elements scandium and yttrium.

The global demand for rare earths has increased as more uses for these elements are found. Today there are hundreds of uses for REE, ranging from high tech (lasers, camera lenses, computer memory modules, x-ray machines), energy (batteries, lamps, superconductors) and industrial (aerospace, caustic cleaning agents, specialized glass) applications.

A List of All Rare Earth Elements

(Remark: Z = Atomic Number)
Elements 29, 61 = Rare Earths
Elements 57 – 60, 62 = Light Rare Earth Elements
Elements 39, 63 – 71 = Heavy Rare Earth Elements

Rare earths elements are also being used for a growing number of applications. At the forefront of this wave of discovery are new technologies being developed for computer science uses, industrial engineering, renewable energy sciences and military applications.

Here are a few examples of how rare earth elements are being utilized in the world today:

Electronics:
Television screens, computers, cell phones, silicon chips, monitor displays, long-life rechargeable batteries, camera lenses, light emitting diodes (LEDs), compact fluorescent lamps (CFLs), baggage scanners, marine propulsion systems.

Manufacturing:
High strength magnets, metal alloys, stress gauges, ceramic pigments, colorants in glassware, chemical oxidizing agent, polishing powders, plastics creation, as additives for strengthening other metals, automotive catalytic converters.

Medical Science:
Portable x-ray machines, x-ray tubes, magnetic resonance imagery (MRI) contrast agents, nuclear medicine imaging, cancer treatment applications, and for genetic screening tests, medical and dental lasers.

Technology:
Lasers, optical glass, fiber optics, masers, radar detection devices, nuclear fuel rods, mercury-vapor lamps, highly reflective glass, computer memory, nuclear batteries, high temperature superconductors.

Renewable Energy:
Hybrid automobiles, wind turbines, next generation rechargeable batteries, biofuel catalysts.

Other interesting facts about uses for rare earths:
The rare earth element europium is being used as a way to identify legitimate bills for the Euro bill supply and to dissuade counterfeiting.

An estimated 1 kg of rare earth elements can be found inside a typical hybrid automobile.

Holmium has the highest magnetic strength of any element and is used to create extremely powerful magnets. This application can reduce the weight of many motors.

                    


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Molycorp’s shares are trading at the lowest point yet; they have crossed the negative side of the ‘not so magical’ USD 6.00/share floor this week, finding bottom at USD$ 5.73/share on the last Thursday in February and started to recover a little on the first day of March. Many stocks experienced a topsy-turvy trading week and many could attribute the moody pattern to the fears about the results of the Italian elections and their impact on the Euro – and as a result on prospects for a European economic recovery. However, Molycorp has no such luxurious excuse; its stock has been feeling the impact of its decision to postpone the filing of its fourth-quarter report with the Securities and Exchange Commission.

Molycorp needs more time to calculate – or perhaps to prepare investors’ stomachs – the sum of a goodwill impairment charge that will be noted for the fourth quarter related to its USD$ 1.3 billion acquisition of Neo Materials (Molycorp Canada) last spring. This news stings all the more given how it contrasts with news that Lynas Corp (ASX: LYC) has officially launched production. Apart from Molycorp, then, Lynas is the only listed company outside of China able to supply rare earth metals, from mine to finished product, in 2013. Indeed, Lynas is producing rare earths in Malaysia, with ore from its own deposit material in Mount Weld. The level of production will soon rival Molycorp as the Company expects to produce 11,000 tons of REE in the second quarter of 2013.

Accordingly, Lynas shares rose by at least 4.3%; Molycorp dropped by twice that percentage. Nevertheless, is Molycorp actually the one that should be blamed? Perhaps not. Demand for rare earths exists. The U.S. Department of Energy estimated in late 2011 that there was a real risk for the production of wind turbines with synchronous motors using permanent magnets treated with dysprosium. These engines are very popular because they are much more efficient than induction motors using copper, improving performance and usability – given that they can function with less wind. Then there are the heavy rare earths (europium, terbium and yttrium) powder phosphors needed in video screens and light bulbs. In 2010 China produced 81% of magnetic alloys for permanent magnets; 13% were made in Japan and North-East Asia (i.e. South Korea), 2% in the United States on foreign license and 4% in the rest of the world including Europe.

A similar pattern explains the geographic distribution for producing powder phosphors. China is not the one to blame for its dominance – and why should it? After all China was handed the rare earths industry dominance on a silver (perhaps masquerading as dysprosium) platter. Europe and the United States, in contrast, have sinned by lacking vision and strategy; they have squandered their expertise and scientific knowledge and not just in rare earths. Indeed, the technology for processing rare earths has completely American and European (mostly French) roots.

The chemistry to separate rare earths speaks was developed in France thanks to the experiments by Paul Lecoq de Boisbaudran (1838-1912) who discovered samarium and dysprosium and Georges Urbain (1872-1938) who discovered lutetium and invented fractional crystallization. Then there is the Manhattan Project, which resulted in the atom bomb while also leading to devising a hydrometallurgical process (ion exchange and later solvent in 1953) to process rare earths. The Manhattan Project first explored the separation of lanthanides before separating radioactive actinides. In Europe, there was the good sense to maintain separation and purification technology at La Rochelle. Molycorp and Lynas were supposed to help reverse the trend, also because China itself may soon to go beyond its domestic rare earths supplies. Technology is increasingly controlled by China. This is odd because the patents for separating and processing rare earths are owned in the West (and Japan). General Motors and Sumitomo announced discovering the process to make neodymium-iron-boron magnets in 1982.

Magnequench, originally a subsidiary of General Motors, was established in 1986 to produce Nd-Fe-B magnets in Anderson (Indiana). Then there was the beginning of the end of the western dominance. In 1995, Magnequench was sold to Sextant Group, an American but Chinese controlled company, which then promptly moved the production line to China in 1998, shutting down US operations. Magnequench returned to the West through Neo Material Technologies, a Canadian corporation acquired in 2012 by Molycorp, whose concentrates required for the production of permanent magnets are still exported to China.

The Molycorp woes are, in a sense, keeping the United States dependent on China for neodymium-iron-boron. Hitachi of Japan now owns the original Sumitomo patents after the 2007 merger between Sumitomo Special Metals Co. and Hitachi Metals. There are also agreements between Hitachi and cross Magnequench. Overall, the framework is favorable to the rebirth of a North American or Western rare earth industry. For Molycorp, the question now is to what extent the write-down will affect its long term business. If we assume that the mine-to-magnet business is the right approach, then the write down will have very short term impact and one probably already absorbed by the market over the past two days. Molycorp’s strategy may yet pay off; however, it will only become a winner if the West changes its attitude to technological know-how – sending it off to cheaper labor markets simply to save a buck has been a short-sighted policy and not just in rare earths.


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Lynas Corp has no doubt been one of the headline leaders in February. After a protracted legal ordeal to confront environmental activists, at the end of February, Lynas started producing rare earth products at its LAMP processing plant in Malaysia. Lynas is expected to ramp up production by the second quarter of 2013 at a rate of 11,000 tons per year. The start of production and the preparations for the first official shipment have shifted have officially shifted Lynas’ mode from development to production. This shift is reflected in CEO Nick Curtis’ decision to step down from his chief executive role to remain as Chairman. He will be replaced by Eric Noyrez at the end of March and whereas the news may appear as a bombshell, the change at the executive floor reflects a planned transition and Lynas’ official switch from development to production. Indeed, Mr. Curtis, who will remain at Lynas as non-executive Chairman and who has led the company through a particularly challenging period, will leave on a high note in the wake of the start of production announcement. Eric Noyrez, , has extensive experience in chemical processing companies having held executive positions at Rhodia Group and Shell. Many will recall that Rhodia owns a rare earth processing facility in La Rochelle, France.

Lynas completed its initial commercial product samples, en route to nominal Phase 1 capacity (which is expected before Q3 2013).  Lynas also announced that it would receive an AUD$15.2 million rebate payment from the Australian Taxation Office (for R&D expenditures generated in 2012) in March. Nevertheless, rare earths prices continued to suffer in February, reflecting the trend from January. Nevertheless, the scenario is more complex.  Lower prices were seen in praseodymium oxide, yttrium, neodymium oxide, terbium oxide, rare earth carbonate, dysprosium oxide and europium oxide.  The remaining metals in the index actually managed to post gains for the month with neodymium, lanthanum oxide, and praseodymium neodymium leading the list of gainers.

                 

A combination of new supply and weaker domestic demand out of China is being viewed as the reason for the falling Rare Earths prices but it is important to look at individual examples in the metals index because these negative moves are not seen in all areas.  Export numbers for Chinese rare earth products have been the subject of debate (as different sources have reported different figures and Hong Po’s recent articles have highlighted some recent numbers), but all of the available data suggests that increased on-stream supply continues.

Chinese producer Rare Earths Global (LSE:REG) released a statement saying it is unlikely 2012 profit forecasts will be met, and that “normalized” losses will be seen on broader downside price changes in the rare earths market.  The company cited rapid industry changes and governmental uncertainties (the election of a new Chinese leadership body, changing statements from the Ministry of Commerce, and a recent white paper on rare earths).  Rare Earths Global said the added uncertainty is creating major delays for the reception of its production quota (an export quota was not received in 2012).

These factors are seen inhibiting operations in the company’s trading divisions and separation plant.  Rare Earths Global explained it is open to the possibility of joint ventures and believes demand for rare earths oxides will rise along with increased regulation and control of production. Meanwhile, Great Western Minerals (TSXV: GWG | OTCQX: GWMGF) entered its commercial production phase at its Less Common Metals subsidiary, with confirmation that specialty alloys have been sold to three existing clients.  The program is set to ramp up production with its second strip casting furnace before the end of the current quarter.   Tasman Metals (TSXV:TSM | NYSE MKT: TAS) released information relating to its Olserum heavy rare earth project in Sweden, saying the resource comes in at 4.5 million tonnes grading 0.6% TREO, with an inferred resource of 3.3 million tonnes grading 0.63% TREO (both with a 0.4% TREO cut-off).


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After falling 22.8 percent, lanthanum oxide was the biggest mover in this week. Cerium oxide weakened by 17.0 percent. Rare earth carbonate finished the week after falling 15.4 percent.

Neodymium oxide dropped 8 percent over the past week. Europium oxide prices fell $30 per kilogram, down from a week ago. Europium oxide saw a 3.4 percent drop-off this week. The past week saw praseodymium neodymium oxide close after a 3.2 percent decline.

Praseodymium oxide fell 0.7 percent over the past week.

Neodymium prices held steady from the previous week. The week also finished with no movement for samarium oxide, terbium metal, terbium oxide, yttria and yttrium.

          


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There is a growing realisation within the rare-earths extraction sector that those development projects that do not have well understood geologies would find it increasingly difficult to attract financing, which may result in those projects falling by the wayside in the medium-term.

The chairperson of South Africa-focused project developer Frontier Rare Earths, which is developing its flagship Zandkopsdrift project in the Northern Cape, Phillip Kenny, told Mining Weekly Online during the Prospectors and Developers Association of Canada’s recent show, which 30 147 investors, analysts, mining executives, geologists and government officials attended, that if a prospective rare earths company had not already identified one of the three well understood rare-earths ores, chances were slim to attract capital.

Kenny explained rare earths are most economically extracted with proven processes from the minerals bastnaesite, monazite and xenotime. Any other of the more than 200 minerals known to contain essential or significant rare earth elements (REE) would require extensive research and development to find an economically sensible process with which to extract REEs, which would take a lot of time and cost excessive amounts of money.

Financiers were increasingly asking for process flow sheets before they would consider borrowing developers a dime.

“The race is on to become the next rare-earths producer, and we are ahead, owing to being the only rare-earths junior which already has a significant strategic off-take partner. We are also well funded and the Zandkopsdrift project’s mainly monazite resource would enable us to produce rare earths at very economical cost,” Kenny aid.

         

Finance in place

He was referring to a deal closed in December with Korean Government-owned mining and natural resource investment company Korea Resources Corporation (Kores), which had acquired a 10% interest in Frontier's Zandkopsdrift rare-earths project, along with an offtake right and obligation for 10% of the production.

The company said it believed the C$23.8-million deal made it the only junior company in the rare-earths sector to have signed and completed a definitive agreement with a significant strategic partner.

Under the terms of the agreement, Kores has the option to increase its participation in Zandkopsdrift up to 50%, together with an offtake right and obligation for up to half of the production from the project.

Further, Kores had agreed to arrange project finance to develop the entire project on the best-available market terms and to provide pro rata funding for the portion of Zandkopsdrift development costs not covered by the project finance, while it would also be responsible for providing technical and operating experience for the design, construction and operation of the Zandkopsdrift facilities.

Frontier added that it was willing to cooperate with Kores with regard to downstream opportunities in the area of rare-earth metals, alloys and magnets.

Frontier said its cash balance was boosted by the transaction to C$52-million and was expected to be sufficient to fund the completion of a preliminary feasibility study (PFS) and a definitive feasibility study at Zandkopsdrift, work on the company's other proposed exploration and development programs and corporate overheads.

Kores was also required to pay Frontier 10% of all operating costs and expenses related to Zandkopsdrift from July onwards, amounting to about C$400 000 as at the end November.

Potent resource

In April 2012 Frontier started work on a Canadian National Instrument 43-101-compliant PFS on Zandkopsdrift. Kenny said most of the requisite ancillary studies were now either completed or were at an advanced stage.

“The group of REE-development companies have indeed already become smaller, as pressure on rare-earths prices have made many projects uneconomical,” he said.

However, he believed prices have bottomed out and with growing demand from producers of smartphons, electric vehicles and magnets, REE prices were expected to climb.

Kenny pointed out the Zandkopsdrift project would be an integrated operation, meaning it would export the separated REEs to Korea.

The highest-value heavy rare-earth oxides, namely europium, terbium and dysprosium, are contained at elevated levels at Zandkopsdrift, compared with several other deposits being evaluated in Australia and North America.

The levels of thorium – 178 parts per million (ppm) – and uranium (47 ppm) in the Zandkopsdrift deposit are low, and compare favourably with many of the more advanced rare earths projects worldwide. This also reduces the potential environmental implications that may arise, should mine development be undertaken at Zandkopsdrift.

There are about 22.92-million tons containing 532 000 t of total rare-earth oxide (TREO) at an average grade of 2.32% at Zandkopsdrift in the indicated resource category, with an additional 20.81-million tons containing 415 000 t of TREO in the inferred resource category, with a 1% TREO cutoff grade.

It is also important to note that there are a series of higher-grade zones within the overall resource estimate at Zandkopsdrift, which are considered to be sufficient in size for exploitation as discrete units within the deposit.

The 2.5% cutoff zone is a discrete area referred to as the Zandkopsdrift B zone, which contains about 450 000 t of rare-earth oxide and is expected to be the initial focus of the company’s activities.

Rival company Great Western Minerals Group is developing the Steenkampskraal REE project, also located within the Northern Cape province.


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