Reinhard Bütikofer - "China Will Become a Net Importer of Rare Earths"

China and the EU are locked in a trade row over rare earths, chemical elements essential for manufacturing cell phones. DW discussed the dispute with Reinhard Bütikofer, member of the EU Parliament's Energy Committee.

DW: Mr. Bütikofer, a row over natural resources with China has escalated in the past couple months. The EU, together with the US and Japan, has filed a complaint with the World Trade Organization (WTO). What will come of that complaint?

Bütikofer: The case remains under adjudication. I would assume that a decision will be made over the course of this year. It would be foolhardy to speculate about a result right now. Even if the US, Europe and Japan are successful, I would assume that the case will be appealed, so we probably won't know before 2014 what the legal situation is.

What are the concrete allegations against China?

I'm not among those who think that the EU's approach is particularly clever. The accusations are related in particular to the export restriction that China has implemented for rare earths. More precisely put: When China joined the World Trade Organization, it promised not to implement exactly this kind of export restriction, and now Beijing is no longer honoring that promise. I am not competent to judge the merits of the case. My perspective is a political one. I fear that if the EU wins at the WTO, that it will be a hollow victory. I believe that we have to change our strategy to one of cooperation.

At the moment, it looks as if the EU and China are on two different sides of the issue. But the forecasts suggest that China will become a net importer of rare earths. In this respect, one can certainly imagine that - with the appropriate efforts - both sides could reach common ground.
China tries to halt rare earth price dive

China has a monopoly on rare earth production. Talk is of 97 percent. So who should China import from?

At the moment, China is absolutely in the leading position. But new rare earth deposits are being found in many different countries around the world: Vietnam, Mongolia, Kazakhstan, Namibia, Canada, Australia and the US. There are also deposits in Europe - in Greenland, for example. These rare earths are not rare at all. Only about 30 to 35 percent of the world's deposits are found in China. Other countries just haven't moved forward with extraction up until now, for a host of different reasons. But now they are moving forward.

That means that the situation is not as dire as it has been made out to be? Rare earths are neither rare nor scare?

Rare earths are currently scarce. Above all, the so-called "heavy" rare earths are not discovered so often. But geologically speaking, they are not scarce. And we are not at all in a situation where we can be blackmailed - where we either have to confront the Chinese or simply do what Beijing wants us to do. There are opportunities for diversification. There are technological possibilities that would allow us to use rare earths more efficiently. There are recycling strategies that were never considered in the past.

The Chinese, for their part, have a big problem with the extraction of rare earths, because there are a lot of negative environmental effects. To put it dramatically, it's really an environmental mess. The Europeans and Japanese have a lot of technology that could help the Chinese overcome these difficulties. In this respect, both sides could be quite useful to each other.

The governance of raw materials on the international level also has to be reformed. It's no longer just a few industrialized countries that have a demand for these materials. The regulatory framework needs to reflect the reality that more and more countries are developing their own industries. And Europe could seize the initiative there with China and with a few African countries.

Do you think Europe and Japan should help China develop its extraction technology, instead of suing Beijing?

The Japanese have already offered that. I believe that it's the right path. Naturally, such business has to be based on reciprocity. China could provide Europe with a secure supply of rare earths for the next 15 years and receive technological know-how in exchange.

Are there already discussions about such an arrangement?

There's even a working group that has been set up between Europe and China to discuss such questions. But unfortunately, the working group has - to my knowledge - never met, because the daily agenda could not be agreed upon due to some sort of diplomatic dispute.

Reinhard Bütikofer was the federal chairman of Germany's Alliance 90/The Greens. Since 2009, he has been a representative in the European Parliament and a member of the Energy Committee. He's been chairman of the European Green Party since 2012.

 

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Rare Earth Minerals Seeks Greenland Rare Earth Exploration Licence

Rare Earth Minerals said it has applied to Greenland authorities for a strategic 38 sq km mineral exploration licence.

It said the licence's northeast boundary was about 500m from a Greenland Minerals and Energy licence that hosted the Kvanefjeld rare earth element, uranium and zinc deposit.

Chief executive David Lenigas said: "This is a very strategic block in Greenland as it immediately abuts the world class Kvanefjeld rare earth/uranium/zinc deposit.

"We have been active in Greenland for some time securing acreage around the Greenland Minerals rare earth oxides deposits," he said.

"We see this whole regional play as becoming more valuable as GGG gets closer to completing their feasibility study."
 

 

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Legislation Introduced to Urge Increasing Production of Rare Earth Elements in Alaska

JUNEAU-Senator Lesil McGuire, R-Anchorage, today introduced a resolution aimed at boosting the exploration and production of Rare Earth Elements (REE) in Alaska. Senate Joint Resolution 8 calls on Congress to support the efforts of Alaska to develop REEs for the benefit of the economic and national security of the United States.

“The United States used to be almost self-sufficient in rare earth elements, but now we almost completely rely upon foreign sources for those important minerals,” said Senator McGuire.  “We need to move now to become a dominant world player in the development of rare earth elements which are critical for military and economic security, as well as renewable energy systems.”

China currently produces 95-percent of the world’s rare earth elements, but reduced the exports of those elements by 54-percent between 2005 to 2010, and then another by nearly 50-percent in from 2010 to 2011.

“It poses a huge risk to our national and energy security to be forced to rely on other foreign nations to manufacture our high-tech military equipment as well as our wind turbines, solar panels, advanced batteries, and geothermal steam turbines,” said Senator McGuire.  “That’s why as a nation, we need to start developing and producing the rare earth minerals that we have in our own backyard.”The minerals are also needed for manufacturing almost all high-tech consumer goods including flat screen TVs, computers, tablets and cell phones.

“As China continues to withdraw its supply of rare earth elements from the world market, we need to be ready to fill those supplies or we will see devastating economic consequences,” said Senator McGuire.  “On the flip side, building rare earth element research and production facilities here in the 49thstate will create new job and career opportunities for Alaskans.”

The resolution also calls for the state to work with several federal agencies including the United States Geological Survey, to identify REE deposits in the state, develop an REE information database, and promote the development of Alaska’s REE industry.  Additionally, the resolution calls on state agencies that deal with permitting to expedite consideration and issuance of REE permits.

“So far, we have identified at least 70 sites in Alaska that contain rare earth elements.  Several experts have said it is likely that Alaska has one of the most significant rare-earth prospects in North America,” said Senator McGuire.  “If we play our cards right, this could secure our future as the lead supplier of America’s rare earth mineral needs.”

 

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ALJ Bullock terminates investigation in Certain Sintered Rare Earth Magnets

ALJ Charles E. Bullock issued the public version of Order No. 44 (dated January 8, 2013) in Certain Sintered Rare Earth Magnets, Methods of Making Same and Products Containing Same (Inv. No. 337-TA-855).

Sintered Rare Earth MagnetsAccording to the Order, ALJ Bullock granted a motion filed by Complainants Hitachi Metals, Ltd. and Hitachi Metals North Carolina, Ltd. (collectively, “Hitachi Metals”) to terminate the investigation based on withdrawal of the complaint as to Respondents TELEX Communications, Inc. (“TELEX”) and Electro-Voice, Inc. (“Electro-Voice”).  

The motion was based on Bosch Security Systems, Inc’s (“Bosch”) assertion that TELEX and Electro-Voice are not separate corporate entities independent of Bosch.  The Commission Investigative Staff supported the motion.  Accordingly, ALJ Bullock granted the motion and terminated the investigation as to TELEX and Electro-Voice.

 

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Ucore Sets Sights on 2016 Production Start for Alaskan Rare Earth Project

Ucore Rare Metals, a junior explorer looking for rare earth deposits in North America, is aiming to commence production at its Bokan project in Alaska by 2016.

Alaskan Rare Earth ProjectCiting a Ketchikan Daily News article, Metal-Pages reported that Ucore, which is focused primarily on its Bokan-Dotson Ridge rare earth element (REE) property, plans to commence construction of the mine by 2014, contingent upon obtaining the necessary permits, before beginning operation two years later.

In November 2012, Ucore released a preliminary economic assessment (PEA) for the project. It shows a before-tax net present value of $577 million and an internal rate of return of 43 percent — impressive economics in a struggling market environment.

In July of last year, the company’s CEO, Jim McKenzie, told Rare Earth Investing News that Bokan Mountain is the largest NI 43-101 compliant heavy REE resource on United States soil; as a result, it has enormous strategic implications for the US, especially given that heavy REEs are the backbone of some of the technologies that are most important to the country’s economic future (for instance, transportation, clean energy, defense systems and medical science).

He added that the project could help challenge China’s domination of the market.

“We view the rare-earth space as a sort of race … Obviously China is withdrawing product from international markets fairly aggressively, and the US needs this product,” Metal-Pages quoted McKenzie as saying.

The Bokan property is enriched with heavy REEs, including dysprosium, terbium and yttrium, according to the company’s PEA.

Outlook for rare earth juniors

At the 2013 Vancouver Resource Investment Conference, John Kaiser of Kaiser Research gave Rare Earth Investing News his take on which — and how many — rare earth juniors are likely to succeed. He noted that companies focused on heavy REEs have a better chance of survival, commenting that Quest Rare Minerals and Tasman Metals both have a good chance at success.

Market round-up

China’s praseodymium-neodymium oxide market is in deadlock and business is thin, according to a report by Metal-Pages.

Market sources confirmed that prices for 99-percent praseodymium-neodymium metal remain at around $64,370 to $65,980 per tonne — unchanged compared with last week’s prices.

A producer based in Northern China confirmed that it has halted production and will begin again following the Chinese New Year holiday.

“We have no new orders. The market will be stable before the Chinese New Year and we except prices to rise after the festival,” he said.

Lanthanum oxide business is said to be thin on the Chinese spot market, as optical glass producers, the main downstream consumers, have postponed buying.

Prices for 99-percent grade lanthanum oxide are in the range of $6,900 to $7,200 per tonne.

A trader based in Southern China confirmed that he will not be restocking because consumers are reluctant to buy at higher prices.

“We are staying on the sidelines for the time being because we will not restart production before March,” a producer in Southern China said.

China’s europium oxide market is stagnant, with prices unchanged as the Chinese New Year holiday approaches. Industry sources have noted that participants will focus more on the market after the holiday.

Company news

Great Western Minerals Group reported on the status of its diamond drilling program at Steenkampskraal.

Objectives of the program include step-out drilling to investigate extension of the main monazite zone; infill drilling on areas of lower data density to upgrade inferred mineral resources to the indicated category; and selected orientated core drilling for geotechnical analyses in support of planned underground developments, according to a press release.

In addition to the drilling, Great Western has initiated exploration activities on the surrounding prospecting right, a 550-square-kilometer area that encompasses Steenkampskraal and hosts historic occurrences of monazite at surface.

Search Minerals announced results from the NQ drilling program on its Pesky Hill prospect in Labrador.

A company press release notes that heavy REE-zirconium-yttrium-niobium vein-hosted mineralization was intersected and that 38 shallow vertical holes ranging from 26 to 50 meters in depth were drilled as part of the phase-one exploration NQ drilling program.

The release also confirms that the zirconium showing contains some of the highest grade heavy REE vein mineralization and is open at depth.

Texas Rare Earth Resources engaged a representative to help determine possible strategic alternatives for its Round Top project.

The representative was hired in response to a preliminary indication of potential interest from a multi-billion-dollar resource firm located in Asia, according to the company’s press release.

Texas Rare Earth’s CEO, Dan Gorski, said, “[g]iven the interest level in our unique Round Top project, the Board felt it necessary to engage a representative to further explore potential interest from Asia. Demand for heavy rare earth elements is expected to continue to outstrip supply in the years to come. Given that the vast majority of such elements are used in the Asian regions, it is logical that interest from the region could be quite robust.”

 

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Equity Rally Should Boost Discounted Rare Earth

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.
Rare Earth minerals

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

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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Avalon Rare Metal's Rare Earth Elements Project Feasibility Study for Completion in Q2

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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Arafura Produces a Separated Rare Earth Oxide Lanthanum Oxide Product

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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Rare Earths Processor Great Western Minerals's Steenkampskraal PEA Postponed

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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