Equity Rally Should Boost Discounted Rare Earth
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- Category: Rare Earth News
- Published on Friday, 01 February 2013 16:18
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Jeb Handwerger: I notice with interest that the popular media is ignoring the World Trade Organization case against China for restricting exports of critical materials. This reduction of supply of the critical metals has a significant impact on the global economy.
These critical metals are not only crucial for your iPads and smartphones, but for our top secret, most advanced weaponry. Looking for substitutes for rare earths has proven to be a poor return on investment. For 50 years, they have been trying to find alternatives, only to find out that the chemical characteristics of rare earths are inimitable.
I have been a major proponent of advancing domestic strategic mines in the U.S. and Canada. Recently, the U.S. Department of Defense partnered with one of our rare earth recommendations to advance studies.
This move may show investors that the our national security is dependent on domestic critical rare earth production. I would not be surprised to see Canada make a similar move to support rare earth mining and development.
Recently during the quiet holiday season, China announced that they were tightening exports again on critical materials. Rare earth export quotas for next year will drop again. China claims that they are cutting back because of the weak global economy.
Nevertheless, stealthily China continues to announce infrastructure plans within the country, and has been stockpiling these critical materials for their own domestic demand. For months, we have been predicting a rebound in China’s economy as iron ore prices began rising.
Now we read headlines that China’s exports are very strong, even with a rising yuan . Risk assets such as the rare earths miners and uranium miners should rally on this news. More smart money from the investment community is realizing that China is far from a hard landing. In fact, they may be in the midst of a powerful recovery.
Exports have jumped to a seven-month highs despite the debt issues in Europe and the United States. This rebound in China may be a spark for the undervalued junior miners, which have been in a downtrend for close to two years as economists predicted a Chinese hard landing.
Many investors have been concerned about the recent Fed minutes, which indicated some sort of exit plan from quantitative easing. These accommodative actions to expand the Fed’s balance sheet to record levels have boosted bonds, the housing and the financial markets with easy money.
We may be witnessing capital flowing to growing economies such as China. All these actions over the past few years by Central Banks could be starting an inflationary cycle, which could boost the undervalued commodities such as uranium and industrial/strategic metals.
China’s equity markets are up around 20% in the past six months, far outpacing equity markets in Europe and the United States. Many do not realize yet that not only is China the world’s biggest supplier, but their own economy has grown to a point where they may become the largest consumer of these materials as major industries continue to move their factories to China.
China continues to control the rare earth industry despite attempts from companies like Molycorp and Lynas to begin production. Both companies have been plagued by delays and obstacles. Mining and refining rare earths is not an easy ballgame, as it requires advanced metallurgy and favorable geopolitics.
For decades, the world has been relying on cheap rare earths from China. Nevertheless, this will change rapidly over the next few years. The Chinese are especially short on the critical rare earths needed for permanent magnets, wind turbines, guided missiles and lighting, as they are building their own facilities to manufacture these finished products.
Molycorp and Lynas should be able to supply a large amount of light rare earths after they work out their issues. However, Lynas is still dealing with protestors in Malaysia, and Molycorp is dealing with delays and rising costs to start production. The disappointing performance in these two equities has hurt the entire sector.
In 2011 and 2012, we experienced a decrease in the price of the entire industrial metal sector as QE2 expired and the U.S. and European debt crisis intensified. However, we may be at a turning point for the undervalued rare earth and uranium miners as China leads a rebound.
Large amounts of quantitative easing in the U.S. were announced in the second half of 2012. The new Japanese government is also devaluing the yen to boost the Nikkei, while restarting nuclear plants. China is rebounding quickly, announcing infrastructure projects and starting construction on nuclear reactors. China is leading the world with building new reactors.
China’s decreasing rare earth exports, combined with declining production and rapidly depleting heavy rare earth resources, could cause an even greater supply shortfall in 2013. China is consolidating the rare earth industry and cutting down on critical metal smuggling. This will help the Chinese have greater control of their own domestic production.
I will closely follow in my free newsletter both the critical heavy rare earth space and the uranium sector as Asia rebounds, as these metals are crucial for China’s domestic needs. These rare metals are vital for our latest high tech devices, and there are only a few viable companies that can get into production in a timely manner.
In the rare earth mining sector, geopolitical support and infrastructure is crucial. In the uranium space, rising geopolitical tensions in Africa and the Middle East with Al Qaeda could cause increased interest in junior uranium developers in the Western Hemisphere.
Two ways of investing in these sectors is through the Rare Earth ETF and the Uranium Miners ETF. Both of these metals are critical for China’s clean energy initiatives and Middle Eastern energy independence. The ETFs were poor performers in 2012 as fears of a slowdown in China increased. Now, they may represent bottoming situations, which I will be following closely for my readers.
From http://etfdailynews.com
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Poor Radioactive Waste Handling at Malaysian Rare Earth Refinery
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- Category: Rare Earth News
- Published on Thursday, 31 January 2013 17:13
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German environmental research group, the Oeko-Institute has published a report criticising Australian Rare Earth mining company, Lynas Corporation's refining facility in Malaysia which is critical of its environmental impact and its poor storage of radioactive wastes.
According to the researchers, the storage of radioactive and toxic wastes on site does not prevent leachate from leaving the facility and entering ground and groundwater.
The report, conducted on behalf of the Malaysian NGO SMSL, found that the site lacks a sustainable concept for the long-term disposal of radioactive wastes under acceptable conditions.
The facility in Kuantan, Malaysia refines ore concentrate for rare earth metals. These strategic metals are used to produce catalysts, nickel metal hydride batteries and permanent magnets. The Institute point out that a number of emerging key- and future-technologies depends from the supply of these rare earths.
However, the ore concentrate being refined at the site also contains toxic and radioactive constituents such as Thorium.
The Oeko-Institute said that it was commissioned to perform a study to check whether the processing of the ore leads to hazardous emissions from the plant or whether dangerous waste will remain in Malaysia.
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Arafura Produces a Separated Rare Earth Oxide Lanthanum Oxide Product
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- Category: Rare Earth News
- Published on Thursday, 31 January 2013 16:43
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Arafura Resources Limited recently announced its success in producing a separated rare earth oxide Lanthanum Oxide product.
The successful separation of Lanthanum completes Arafura's goal of developing five individual separated oxide products for initial commercialization of the Nolans Project.
The Nolans Project will see the annual production of rare earth oxides from the Whyalla Rare Earths Complex reach 20,000 tonnes, which is equivalent to about 10 per cent of the world's supply.
Arafura's separation of Lanthanum follows the production of samples of four other Rare Earth Oxide (REO) products from the Nolans Bore resource last year.
The four REOs included Cerium Oxide, Nd/Pr Oxide Didymium Oxide, SEG Oxide 'Mids' REO and HRE Oxide 'Heavy' REO.
The products were produced at pilot scale and show another stage of development within Nolans Project.
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Arafura chief executive officer Chris Tonkin said the downstream technology program continues to deliver excellent outcomes.
"The production of the fifth and final product at pilot scale, not only proves Arafura's processes and provides valuable engineering data, but will also provide further opportunity to engage potential customer for this high volume product," Mr Tonkin said.
"Our demonstrated ability to produce separated oxide products is a major point of difference between Arafura and other rare earth projects currently being considered for development in Australia and elsewhere around the world."
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Avalon Rare Metal's Rare Earth Elements Project Feasibility Study for Completion in Q2
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- Category: Rare Earth News
- Published on Thursday, 31 January 2013 17:04
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Avalon Rare Metals Inc. is pleased to provide a progress report on the Company's Feasibility Study and related work on the Nechalacho Rare Earth Elements Project at Thor Lake, NWT (the "Project").
Feasibility Study
The Feasibility Study ("FS") for the Project, including the operations at Thor Lake and Pine Point, NWT and Geismar Louisiana remains on schedule for completion in Q2 2013. The following key elements of the FS have been completed:
Environmental Baseline work at Nechalacho and Pine Point;
Underground Mine plan and development schedule;
Tailings Facility;
Paste Backfill Plant;
Nechalacho Flotation Plant designs; and
Geismar Separation Plant designs.
Capital and Operating cost estimates are largely complete for those components of the Project where engineering design work is finished. Design criteria for the Pine Point Hydrometallurgical plant have been prepared and design work is now advancing on schedule.
Product Marketing
Avalon continues its efforts to secure product off-take agreements and in this regard, the Company is pleased to announce the signing of a Memorandum of Understanding (MOU) with an Asian company for the sale of its Enriched Zircon Concentrate ("EZC") product. The EZC contains most of the zirconium, tantalum, niobium recovered and approximately 15-20% of the rare earths. Samples of the EZC were initially sent to this prospective customer in August 2012 and successful processing tests led to the signing of this MOU in January 2013. The revenue from the EZC is expected to represent a significant percentage of the total revenue from the project. Negotiations for off-take agreements for the sale of separated rare earth oxides and carbonates are progressing.
Metallurgical Testwork
The Hydrometallurgical plant testwork program is virtually complete except for some minor impurity removal and kiln optimisation investigations. Mintek SA in Johannesburg, RSA is in the process of optimising final impurity removal processes ahead of completing a mini pilot plant campaign for the rare earth separation and refining operations. Process optimisation testwork for the flotation plant continues as opportunities to improve flotation performance are investigated. Various alternative reagent combinations will continue to be evaluated in an effort to reduce reagent consumption and enhance recoveries.
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Rare Earths Processor Great Western Minerals's Steenkampskraal PEA Postponed
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- Category: Rare Earth News
- Published on Thursday, 31 January 2013 16:21
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Rare earths processor Great Western Minerals Group provided Wednesday a corporate update on its activities, and said that its preliminary economic assessment (PEA) for its Steenkampskraal project previously scheduled for the end of January has been postponed to sometime before the end of the first quarter.
The delay is due to the company gathering additional metallurgical and capex data in light of the recently expanded resource estimate announced last week.
Great Western last week released an updated NI 43-101 compliant resource estimate at Steenkampskraal, prepared by Snowden Mining Industry Consultants, which showed a mineral resource of 32,000 metric tonnes of total rare earth oxides plus yttrium oxide (TREO) under the indicated category, and another 42,100 metric tonnes under the inferred category. Both categories used a 1% TREO cut-off grade.
Indicated resources rose by more than double from the resource estimate last May, while inferred resources more than tripled.
On Monday, the company also announced a 9,400-metre, 65-hole diamond drilling program at its past-producing Steenkampskraal property in South Africa. With its new drilling program, Great Western said it will also do infill drilling on areas of lower data density in order to upgrade inferred mineral resources to the indicated category, and selected orientated core drilling in support of planned underground developments.
Great Western has announced a series of management additions and changes in recent weeks in preparation for a new stage in the life of the company, as it aims to become a fully integrated rare earth producer.
Currently, Great Western is a rare earth processor, whose specialty alloys are used in the magnet, battery, defence and aerospace industries. Produced at the company’s subsidiaries Less Common Metals (LCM) in Birkenhead, U.K. and Great Western Technologies (GWT) in Troy, Michigan, these alloys contain aluminum, nickel, cobalt and rare earth elements (REE).
Its development program at Steenkampskraal is central to ensure a strong flow of feedstock for its downstream processing - the company intends to be one of the first to produce significant quantities of the more valuable heavy rare earth oxides, which are important materials for alloys.
Also in the update today, the relocation of its UK-based LCM facility is now virtually complete, with the new location housing LCM's first strip casting furnace with provision for substantial expansion.
All equipment that had been in operation at the Valley Road site, including the analytical laboratory, has been relocated to Hooton Park and is now fully operational, Great Western said.
Sampling has been undertaken for all key customers, the company added, and LCM is progressing into advanced stages of "commercial supply contract / technical approval" stages.
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