Where Are The Non-Chinese Heavy Rare Earths Going To Come From And Who’s Going To Buy Them?

by Jack Lifton on September 16, 2012 · 42 comments

in News Analysis, Rare Earths

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The iconic mid-twentieth century American bank-robber, Willy Sutton, is famously reputed to have answered the question “Why do you rob banks?" with “because, that’s where the money is.”

So, by analogy, I am going to answer the question “Why are Chinese rare-earth producers looking for rare-earth deposits outside of China?" by using Willy Sutton’s logic - “it’s because that’s where the heavy rare earths are.” China has been and remains at this moment the only commercial source, and the only commercial source that there has ever been, of the critical heavy-rare-earth elements (HREEs) dysprosium (Dy), terbium (Tb) and yttrium (Y).

Chinese geologists and resource economists have been openly saying for several years that China has at the most, if demand remains at present levels of growth, between 5 and 30 years of production of the HREEs remaining at present levels. This would mean, for example, that China could continue to produce 1400 t of Dy per year for perhaps another generation. But this fails to take into account the steady growth in demand for Dy, Tb and Y. Even if less of them can be used in each unit of production, the number of units of production is growing much faster than any thrifting can possibly contain. A Chinese and/or Indian consumer driven economy would (will) turn the rare-earth market inside out.

Chinese HREEs are almost entirely produced from very low-grade, highly weathered (broken down from hard rock into finer grain material) deposits that today present themselves as surface clay that has absorbed and adsorbed rare-earth elements (REEs) washed through them from rocks disintegrating over many millions of years in the rain and snow. In China these clays have advantageously not retained the radioactive components of the hard-rock REE minerals from which their REE content originated; the typical concentration of the total REEs in a clay deposit, however, is just 0.03%. However of this the element Dy, for example, constitutes 2% or more.

The processing of these clays consists of washing them with chemical reagents into which the REEs dissolve and from which the REEs do not redeposit into and onto the clay minerals. This process is mechanically simple. The selected reagents are pumped to the highest point in the “deposit” and then allowed to drain through it. The drainage is directed by piping or plastic lined channels to catch ponds, and is recirculated until the solution is measured as near saturation (it will hold no more REEs without their precipitating out). Then the material flow is stopped and the REEs are chemically precipitated in the catch ponds as compounds that are no longer soluble in the extracting reagents. The mixed REE solids (usually carbonate or oxalate compounds) are removed and new reagents are added to the reactants to make up the losses and the cycle is repeated until no more REEs can be extracted (economically) in a reasonable time.

This same method when used in gold mining is called heap-leaching, and it typically uses a cyanide solution as the extracting reagent. The solubilized gold is recovered by adding zinc, carbon, or a similar reducing agent to the near saturated extractant. This “heap leaching” is done in many locations in the USA, but, obviously not near populated areas or arable land. Cyanide is easy to destroy chemically but it is one of the deadliest poisons to life so that it must be handled very carefully.

REE extractants used in heap leaching are nowhere near as toxic as cyanides and in fact some of them can be beneficial to the soil (ammonium compounds are used that give a net increase the nitrogen content of the leached through material). Notwithstanding this purported fertilizing benefit, heap leaching of the REEs from adsorption clays is a messy business on a large scale.

It has been stated to me in China that as much as 40% of all REE production may be illegal. This means that health and safety are not considered in those (illegal) operations, and where heap leaching is used without proper safeguards the societal damage may exceed the value of the recovered material.

In the next five years the illegal mining of REEs both light and heavy will cease as China’s total restructuring of the industry takes effect. Production levels and sales levels will be licensed and monitored. A company or a trader who has unlicensed material will have that material seized and confiscated and be subject to severe punishment. Cynics claim that illegal production and trading cannot be totally stopped in China. I will bet that the 40% figure today becomes less than 10% in the future and that no illegal production of HREEs will occur in China sooner than that. Environmentalism is a source of social instability and therefore a threat to the power of central authority in China.

Although the production of HREEs by heap leaching will continue in China it will get much more expensive to do as illegal operations and inefficient or dangerous operations are shut down and costs which have been socialized and distributed by criminal elements are returned to where they belong - a charge against the cost of production.

The continuing problem and the reason that such costly production methods continue to be in use is that the HREEs are critically important to the greening of China. Unlike the USA where environmental improvement is today incremental or marginal, there is a lot left to do in China, where major environmental issues are just now impacting future planning and must be addressed if China is to on the green path that the government has promised.

The Chinese are openly worried about the availability of enough Dy and Tb for their planned development of a consumer=driven economy, based on domestic manufacturing of consumer goods. Perhaps 99% of the global demand for HREEs is for non-military civilian industrial use. The tiny amount required by the militaries of the current “great” powers is blown all out of proportion by the promoters of rare-earth mining and refining for the purpose of raising capital.

In August, 2012 the English language version of the China Daily, carried an article headlined “Firm seeks foreign partners”. The article said, in part:

“Zhang Zhong, general manager of Inner Mongolia Baotou Steel Rare Earth (Group) Hi-Tech Co Ltd [IMBSREHTCOLTD], said that with more discoveries of heavy rare earths overseas [outside of China], the company is in discussion with some foreign companies. The company’s pursuit of heavy rare earths comes as a result of its goal to develop products that use both light and heavy rare earths. The company is expected to form the North Rare Earth Group to consolidate small and medium-sized rare earth enterprises in the north and some in the south, where heavy rare earths are available [at this time in China]…”

I do not personally have any knowledge of which “foreign companies” that IMBSREHTCoLtd is speaking with, but I can tell you which ones they should be speaking with.

I have been working directly as an advisor on marketing and processing to the HREE sector of the junior-mining industry for the last 5 years; I have visited a number of the sites of these companies, and I have been monitoring the developments in REE extraction from ores and concentrates as well as separation , metal production, and alloy making, in great detail, outside of China.

Today I will give you a list of ventures that are the ones I know of that I believe are in the running to produce HREEs in this decade. Most of these companies have published target dates for meeting the various stages of the deposit credibility requirements published by Canada’s securities regulators and known as the NI 43-101 requirements. Other have met the requirements of Australia’s JORC Code. Those that have already met these requirements are on the TMR Advanced Rare-Earth Projects Index. Extensive data for thee projects of the same companies that I am going to list are available via the previous TMR Index hyperlink.

In the categories that follow I will identify the companies by geological type and geography and list them in their category in the time order in which I think they COULD come into commercial production.

All mining companies must be legally permitted to operate a mine and/or a processing company, before they can mine. These requirements make all lists such as mine speculative, because no one can predict with certainty the outcome of local and national politics in any country.

In addition just a very few of the companies on the list are vertically integrated beyond the primary production and extraction of desired metal values from ore concentrates. But this does not mean that there is no place in the market for the products of any of them that have no further downstream processing. In fact those companies that can “job” out the processing to an existing separation facility in the USA, Canada, China, Viet Nam, Thailand, India, Estonia, or France or can work with one of the contract processing facilities outside of China now in advanced planning may be in better shape than those facing the daunting challenge of engineering and building a costly and complex separation plant and refinery.

The next step after separating and refining is a bigger challenge. I personally know of just a handful rare-earth metal producing operation outside of China and one more coming into production in the next year. All of these operations are company specific, so they may be willing to buy separated and purified REE chemicals for reduction to metals, but the amounts of those they can process will be limited.

Therefore even the HREE producers coming on stream in the next two years will have little choice but to sell their products to Chinese or Japanese rare-earth metal and alloy producers. There is no other location for them to go.

Potential non-Chinese, near-term mining producers of HREEs (as chemically purified salts)
in commercial quantities
Project type Project location Owner
Ion-adsorbed clay Madagascar Tantalus Rare Earths
Hard-rock primary rare-earth deposits Sweden Tasman Metals
Canada Quest Rare Minerals
Matamec Explorations
Avalon Rare Metals
USA Ucore Rare Metals
Rare Element Resources
Australia Lynas Corp (Duncan)
Northern Minerals
Hastings Rare Metals
South Africa Great Western Minerals Group
Frontier Rare Earths
Rare earths as secondary byproducts Australia Alkane Resources (zirconium primary)
Canada Orbite Aluminae (alumina primary)
Greenland Greenland Minerals and Energy (uranium primary)
Turkey AMR Mineral Metal (magnetite primary)
HREE in residues from tin or uranium mining Brazil Molycorp Canada (tin tailings)
Kazakhstan Toyota Tsusho & Sumitomo (uranium tailings)

The companies above are listed geographically by their stage of production of separated purified HREEs. That does not mean that I necessarily believe that they all will ever achieve that goal on their own. However I do know from direct observation that Orbite Aluminae, for example, has already produced the first pilot-plant samples (200 grams each) of the spectrum of individual high-purity (99.99%) REEs as oxides (including scandium) as well as gallium. This was done in Germany from Canadian-produced ore concentrate, itself produced as a byproduct of their high purity (99.99%) alumina production process. I predict that Ucore Rare Metals will be the first to produce commercially separated, purified Dy from an American ore deposit, in pilot plant quantities, in 2013, and I project that Great Western Minerals Group will be in commercial production of Dy from its South African mine before the end of 2013.

I cannot overemphasize that no matter where the HREEs come from, the markets for them as raw materials for producing metals are overwhelmingly in China with the balance in Japan. The real challenge for the non-Chinese world is the choice of whether just to be a supplier to southeast Asia of REEs as raw materials, the position China was in with regard to the rest of the world in the last quarter of the 20th century, or whether to revive the total supply chain outside of China and to compete with China in downstream products including end-use products.

It is my belief based on my own observations that REE total supply chains, mine to market, are under construction in the USA, Europe, and India at this time.

Disclaimer: at the time of writing, Jack Lifton is long on Great Western Minerals Group (TSX.V:GWG); he holds no shares or stock options in any other publicly traded rare-earth company. He is a member of the supervisory board of Tantalus Rare Earths AG (F:TAE) and a non-executive director of AMR Mineral Metal Inc. He also does ongoing paid consulting for Ucore Rare Metals Inc. (TSX.V:UCU), Rare Element Resources Ltd. (TSX:RES), Tasman Metals Ltd. (TSX.V:TSM) and for Orbite Aluminae Inc. (TSX.V:ORT). He does no paid consulting for any other publicly traded rare-earth company.

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{ 42 comments… read them below or add one }

1 George Farmer September 16, 2012 at 4:35 pm

I did not see mention of Stans Energy, hreef. Do you think that that their operation will be shut down, or confiscated?

2 Owen Barlow September 16, 2012 at 5:59 pm

Was Stans left out because of the political problems are did they just not qualify otherwise

How can you own GW due to the very large warrant and option stock outstanding.The majority of selling has to be employee or broker sales and I seee no end of that. What would the NAV be on a diluated basis?

3 Paul Gubbens September 16, 2012 at 6:22 pm

Dear Jack
You do not talk aboot Eu.
Do you have a reason?
Paul

4 Rene Trevino September 16, 2012 at 6:50 pm

Jack, I enjoy your newsletter. I recently read in the New York Times about the building of supposedly the largest refinery to process rare earth metals in Malaysia.
This should put some pressure on China to control the rare earth market and compliments your comments about the China situation.
We submitted some unique flotation agents for the evaluation at Round Top which came out one and two on their first and second evaluation. I understand they are on the refining stage but still some time to come before it’s in production.
Thanks for the interesting newsletter.

Rene

5 Sunrize September 16, 2012 at 7:21 pm

Jack,
You said “I do not personally have any knowledge of which “foreign companies” that IMBSREHTCoLtd is speaking with, but I can tell you which ones they should be speaking with.”

Which companies would those be?
Would Great Western’s Douglas River and Benjamin River projects be in focus for IMBSREHTCoLtd?

6 Steve Mackowski September 16, 2012 at 9:45 pm

Jack – we do not seem to disagree on much. This is where i have been for many years. I haven’t changed. The Chinese see the value, they see the opportunities. I feel they will approach more than your list however. The continuance of their historic dominance of the REO space is a target. A similar position in other resources (and the value adding to those resources) is also a target. ROW has to decide its position on that.

7 Richard J. Lee September 16, 2012 at 10:14 pm

Dear Jack,
The Chinese government may want to restrict the illegal mining and extracting of REE, but the level of corruption prevents their effort from being effective.
I would say 20-25% illegal production and separation stay for many years to come.
I also guess from economic and political reason, Chinese producers may prefer to invest in or source from separation plants in South East Asian countries, Africa and South America to supply China and the world with high concentrates of REE.
In the end the price of HREE will slowly increase due to the growing demand and cost of production.

8 Jean-claude Bünzli September 17, 2012 at 5:01 am

Dear Jack,
Very informative article indeed. I wish you would have added either the planned date of operation start for the facilities mentioned or if they are operating and also what is the foreseen tonnage/year. For instance the easy-to-mine and easily-accessed Nova Kärr mining facility which features 0.6% TREO of which 50% HREO plans to be operative in 2014 (although Uwe Kaist thinks it is a bit optimistic) and produce 6800 t RE carbonates/year.

9 Kettl Alfred September 17, 2012 at 6:25 am

Jack,
You left out Stans Energy which was and still is the only HREO Producer Outside China. They Even proved recently with Trials that their process is working. Interestingly they could be able to produce by mid 2013 with outsourced ore (as their tailing process is not ready by then) and start producing by mid end 2014 with their new established process. So, IMO we talking here not about a junior mining company, but a almost producer. How comes there is so much aversion about Kyrghiztan as seemingly now they really starting to apprechiate foreign investors and of course also Stan’s as they even mentioned that REE will be some of their future core mining businesses?

10 barry zern September 17, 2012 at 8:36 am

I would think Avalon would be on the list given its BFS position and size of its deposit?

11 Jack Lifton September 17, 2012 at 9:07 am

Barry,

While I think that Avalon has a very long road to travel, it is on the list above. The Nechalachco property has to have power, water treatment, chemical handling,and access developed even if it, the mine, just functions to bring the ore to the surface and mechanically concentrate it to prepare it for shipment to Louisiana. I also think that the beneficiated ore must be cracked at the site and, in addition, that a process leach solution be treated on site to remove the radioactive components.

If the construction of a SX plant in Louisiana is to be in lock-step with the above site preparation and management then a huge amount of money must be raised and schedules for construction, transportation, and operation be met.

Molycorp has everything it needs, in the way of power and access, for operations such as the above in one place that has uniform, though warm to hot, dry weather, and yet it has repeatedly stumbled and diverted its resources and attention causing cost over-runs and delays. Even with an existing mine Molycorp has spent now more than 1.5 billion dollars to just get where it is now. Why on earth should we think that Avalon faces a less daunting or less time consuming challenge.

I think that if Avalon can raise the money and recruit and manage the talent at two widely separated sites from an office near neither of the sites it will take the 5 years (or more) to bring it into operation that they say it will.

Thanks for reading,

Jack

12 Kettl Alfred September 17, 2012 at 9:22 am

1.5 billion debt, lowest basket price….moly go? Kidding us?

13 Jake September 17, 2012 at 10:33 am

Jack,
While Great Western will not be a HREE ROW supplier in its current form, do you think it is possible that they make a dent with the expanded drilling and the new exploration rights that expands SKK and the mine life?
thanks-Jake

14 Jack Lifton September 17, 2012 at 10:51 am

Jake,

Actually I do think just that, which is one of the reasons that I am a long term holder of GWMG. I also think that GW probably will develop the high grade high HREE properties in Canada and the USA that it holds once it has a processing methodology in operation. The continuity of their first class management also gives me a level of comfort. It’s unfortunate but true that the junior mining space is top heavy with promoters who just want to raise money in the stock market without any appreciation of, or apparently care about, the path to actual production. Great Western is not one of those companies.

15 Nick Outram September 17, 2012 at 1:05 pm

Jack, while I agree with most of what you say here the statement: “…Unlike the USA where environmental improvement is today incremental or marginal, there is a lot left to do in China…” is breathtaking. Something like 98% of US transportation currently uses Fossil Fuels, ICE vehicles penetration is close to 100%… This is a Massive area for environmental improvement! In addition usage of lighting needs to shift heavily to LEDs.
Nick -also (very) long GWMG…

16 Tek September 18, 2012 at 6:03 pm

Thanks for the nod to Ucore and Great Western. Both seem to be well managed and on track.

17 Tim Ainsworth September 21, 2012 at 10:02 am

Jack,
I’ve noticed in several articles that you state Lynas will only be producing LREE from the CLD concentrate at the LAMP.
Please reference Page 21, http://www.lynascorp.com/content/upload/files/BBY_Rare_Earths_Conference_13_Mar_2012.pdf
which shows Stage 1 producing 480tpa of SEG + HRE and Stage 2 producing a further 480tpa of separated SEG + HRE.
Elsewhere Lynas notes that this material will be toll processed without providing detail. Assumption on my part but given their relationship with Rhodia I suspect they may be processed at La Rochelle.
The DoE CM report gives a little more insight to the breakdown in Table 4-2, with input from Dudley Kingsnorth: 480tpa Sm, 84tpa Eu, 170tpa Gd, 21tpa Tb, 21tpa Dy & 63tpa Y. Certainly the Eu & Tb are not insignificant volumes when viewed against current & projected 2015 volumes.
Rgds,
Tim

18 Jack Lifton September 21, 2012 at 10:16 am

Tim,

Thank you for bringing this up. I am saying specifically and only that Lynas said to me at the LAMP that it would NOT be separating the mid or heavy rare earths from each other in Malaysia.

Your guess about Rhodia and LaRochelle, or perhaps, Rhodia-China is as good as any guess I might have. The trouble with processing in China is that the material processed then becomes subject to allocation. There is NO evidence that China has ever allowed work-in-progress type of import-export of RAW MATERIALS. My conversations in China lead me to believe that the Chinee domestic HREE industry is extremely against this type of practice. However I wouldn’t be surprised if Lynas has sold the material outright in China, perhaps even to Rhodia-China. China has recently promulgated regulations controlling and in some cases against in-situ leaching, so that HREE feedstock from hard rock mining must now be very much sought after in China.

Thanks again,

Jack

19 Tim Ainsworth September 21, 2012 at 7:53 pm

Thnx Jack,

Understand the LAMP will not be doing final separation (although the Lynas chart suggests Stage 2 will make the “baby step” of separating MREE from HREE) but at steady state for both stages, maybe late next year, the LAMP will be producing 960tpa M/HREE, of which 189tpa will be CREO.

Your comments re China reflect the very reason Lynas abandoned plans to locate the LAMP there so I find it unlikely they would send the M/HREE there to be trapped by quotas/taxes. That got me thinking La Rochelle and when you noted the recent restart/expansion there in one of your articles I became a little more confident. Lynas play it VERY low key but I suspect a lot more depth to the Lynas/Rhodia relationship than is apparent, tech assistance at the LAMP from the outset, concessional primary offtake agreement & Eric Noyrez joining Lynas as President/COO. If Eric’s remuneration package is any guide he is destined to be a key player at Lynas. Perhaps I’m looking at this with a SH’s rose tinted glasses but it will be fascinating to see how it develops, particularly in light of the potential HREE volumes from Duncan.

Great article above, way out in front of general commentary. Very much appreciate the insights that both you and Gareth freely share.

R’gds,
Tim

20 jesse September 30, 2012 at 7:53 am

Jack, if you’re such a heavy rare earth expert, how come you have no mention of France’s La Rochelle rare earth processing plant? It’s multiple football fields in length and fully operational. They have a capacity of hundreds of tons.

Have you been there? Have you spoke to the officers of that company to get their opinions on what is happening in this market? Wouldn’t it make sense to interview them?

21 Jack Lifton September 30, 2012 at 10:42 am

Jesse,

Rhodia has been asked twice this year to allow me to visit La Rochelle. Once on a team with a HREE junior (a consulting client) seeking a separation processing supplier and once as part of a group discussing a j/v with Rhodia for REE processing. Both times, although the visits were approved, I was specifically refused an invitation. I don’t know why. One of these occurrences was after 3 Rhodia technical people had attended an invited lecture I gave at the Catholic University of Louvain in Belgium on the state-of-the-art in REE separation technology. The “secrets” to the efficient operation of an SX plant, such as the old one at LaRochelle, are the feedstock PLS concentrations, the specific extractants, extractant concentrations, carrier solvents, the contact time, vortex speed, temperature. etc. None of those can be determined by me simply by looking at tanks or mixers. I thought it was petty of Rhodia to exclude me.

I visited and toured and spoke for hours with the staff and management of the LAMP facility in Malaysia shortly after I spoke in Belgium. It was my understanding that the LAMP was using the latest Rhodia (China) developed separation technology. It is an impressive facility that is at least 100 acres in size, and my specialist colleagues on the visit including Prof Chun Hua Yan of Peking University declared it to be state-of-the-art. It was stated to us by the LAMP management and by Lynas VP Technology that the LAMP is NOT intended to or designed to process and separate HREEs.

I have been told that Rhodia has reactivated LaRochelle in order to process scrap material recovered from CFLs and LEDs by Umicore to recover the rare earth, or rare earth related, phosphor materials in them such as terbium, gadolinium, and yttrium. I don’t know if the plant is operational yet (again) but I urge you to read your own words. If the output is to be just “hundreds of tons” but the plant is “multiple football fields in length doesn’t that tell you what the problems are in separating heavy rare earths from each other? Note by the way that the LAMP facility with a planned output capcacity of 22,000 metric tons per year of LREEs and mixes of them is more than 100 acres in area.

Announcements by rare earth juniors and processors tend to be vast oversimplifications not only of the technological problems but also of the TIME it takes to solve them, if they can be solved. The drivers in any business are cost and time.

22 Tim Ainsworth October 1, 2012 at 11:52 am

Jack,

La Rochelle officially opened the two rare earth recycling units last week.
http://proedgewire.com/rare-earth-press/solvay-launches-its-rare-earth-recycling-activity-in-france/

Read elsewhere they have also refurbished and restarted the two original process lines and as they have stated that the recycling will not be profitable (looking for EU subsidies) this suggests they will be processing new material also. Get the impression this might be a little sensitive locally and perhaps they didn’t want the publicity from someone who could tell the difference.

Apart from the possibility of Lynas’s Th free SEG & HREE Rhodia have the LOI with Tantalus and their ionic clay-like deposit, also relatively free of Th & U. They wouldn’t be processing Tantalus’s 15ktpa at La Rochelle but again perhaps the SEG & HREE.

Cheers

23 Jon October 5, 2012 at 6:48 am

Jack is it fair to say you knew nothing about Stans Energy hence you are not responding to any post about the company? They are the first western company to prove their metallugy and as an advisor on marketing and processing to the HREE sector of the junior-mining industry for the last 5 years, I feel you owe the readers a response. Is this something you have missed?

24 Kettl Alfred October 6, 2012 at 1:50 pm

Jack:
this I copy pasted from one of your articles.
……”However I do know from direct observation that Orbite Aluminae, for example, has already produced the first pilot-plant samples (200 grams each)”.
“Potential non-Chinese, near-term mining producers of HREEs (as chemically purified salts) in commercial quantities”.

So Jack, by producing salts you obviously mean highly purified Oxides?? And this in your opinion setting them on top of a company which produced HRE metals in the past and started up testing a commercial production successfully and this during past 3-4 months?
You might not be interested in Stans, or ignoring it. However, in a professional research you should at least be so fair and write a complete report, not half true stories which fit your purpose.
I followed your reports an highly respected your opinion and expertise, but now I do have some doubts.I do also research, auditing in different fields, but professional it’s is only respected as long it is based on truth and fairness..

Stans produced metals from last July to now in production trial a 100 times more than as those in your praised as future or already top player article mentioned 200gl and you as an respected expert are still ignoring the facts.
Kettl_a@me.com
PS: I don’t need to hide behind a anonymous post.

25 Kettl Alfred October 7, 2012 at 7:06 am

There are several factors, besides REE grades wich making a Rare Earth E producer interesting:
…..location (Stans is not in a favour able location from political pov
…..location can also mean cheaper labour, easier to get permits
…..what is the end product. Stans is Producer of metals, not just concentrates
…..process. Stans has 0ver 10 years proven production..with now new state of the art advanced process
…..production. Stans did produce even metals during past 3-4 month (in small scale but notable purity)
…..commercial production…maybe just month away from 500 t/y production as first phase
…..investment. Less than 250 million for the new plant, besides the existing one which was refurbished with absolutely lowest budget.
So, is Stans still a Junior Miner? Jack…….to be ignorant here is not the smartest thing. Of course I am pro- Stans as a investor, but truth is truth and will ever be.
Yes, 8 month ago, the picture was different, at that time I would not have even dared to write such post, because I couldn’t, simply because I didn’t have enough facts, just faith in this investment. Now, the cards have changed and Stans WITH STILL A PINKSHEET SP BECAME “IN MY EYES” A MATURE PLAYER AND EVEN A FUTURE NOTABLE PRODUCER OF HEAVY RARE EARTH METALS. I don’t want bash a bout producing salts, concentrates, good drill results of mining opportunities, no. However, it is fair enough to ask you to mention Stans in your reports, otherwise they a just fragments, incomplete ” research” and of minor quality. If you writing about one company or two, that’s ok. Making a chart like in above article, then I rather not even want to read it.
In this spirit….I don’t expect your reply, but I guess many others will get some reasonable doubt here.

26 Jack Lifton October 7, 2012 at 9:58 am

Mr Kettl,

I am not a supporter of globalization, so that I advise my end-user clients to base their sourcing decisions on the adherence to Western norms and regional ethics of proposed sources. Western democracies practicing free market capitalism have historically restricted trade only as a last resort short of war. The old Soviet Union never missed a shipment to my customers of rare earths for phosphors in the late 1970’s because it, The Soviet Union, needed hard currency. China came into the US market at that time and undercut Soviet pricing thus driving the Soviets out of the free market. China’s goal was, of course, also hard currency. Western businessmen gambled and have now lost the bet that the Chinese would always need them for currency and markets.

Today’s post Soviet(?) Russian Federation is hardly a free market democracy, and it has become a large exporter of natural resources and energy. The Russian people’s suffer but the ruling oligarchs do not. They live sybaritic lives and invest nothing in infrastructure or nation building. The rule of law hardly competes there with the law of the jungle.

I cannot in good conscience recommend as a rare earth supplier any company that is not in a free trade based economy. This is why we must break our dependence on China. Substituting Kyrgyz political overlordship of a supplier for Chinese does not seem sensible to me.

We must either build a reliable, credible, total supply chain under the control only of the free market or we will remain dependent on China’s whims and China’s political and economic goals. The Russian dominated part of the world is not to me an acceptable answer.

I know you won’t like this answer, but it is my answer.I also know that Kyrgyzstan is not part of the Russian Federation.

Jack Lifton

Jack Lifton

27 Kettl Alfred October 7, 2012 at 11:30 am

Dear Jack,
Thank you for clarification. I fully understand. I didn’t mean to offend you. In fact I appreciate your professional articles, just didn’t understand the reasons why you left out Stan’s in most of your articles. It is only fair to admit from my side, that you never wrote or mentioned Stans in a negative way. We all see this business from different angles and there is no absolute right or wrong, unless we see the final results.
Thanks again,
A. Kettl

28 Kettl Alfred October 8, 2012 at 7:32 am

Jack,
One thing makes me curious. I understand aversion, uncertainty to promote mines in..lets name it “China” for instance or “Russia”. While Russia usually keeps contracts and stick to arrangements, made with them. china does as well.
However, you exclude Khyrgiztan and then you !!!promoting!!! Great Western Minerals Steenkampskraal mine. It certainly came to your knowledge that SA is quite a country with many political problems and gunning down 35 “revolting miners” .
http://www.theglobeandmail.com/news/world/south-africas-ruling-party-paralyzed-as-strikes-choke-off-economy/article4595773/?cmpid=rss1

So, well measuring with different scales I still can’t fully follow your statement, after re-viewing it again.
You writing recommendations, well that’s a personal thing. Writing technicals, leaving out a “serous” soon future player, such as Stans IMO is not a standard.
BR,
Alfred

29 LLeone October 8, 2012 at 7:49 am

Jack,

Great article…It’s good to hear that Ucore has such bright prospects next year. But aren’t you going out on a limb, a bit, seeing how their PEA hasn’t even been released yet?

It amazes me they don’t even have a date certain to have the PEA out to the public. Should we take that as good news or bad news?

And do you know if Ucore has bought the patent to Dr Hammen’s Spider Web nanotech seperation technology or does he retain it for himself and license it out? From what I’ve read this breakthrough technology could be almost as lucrative as the HREEs at Bokan…What say you?

30 andech October 8, 2012 at 8:44 am

dear mr. lifton
you say
“I am are not a supporter of “globalization”

do you really think that south africa , indonesia etc. are more democratic, free market oriented than russia or kyrgyzstan?
do you really desire and believe that in the 21st century the old style democracy principles would be able to govern countries like china, russia, etc.
do you really believe that an investment in south africa oder southern america ist safer as an investment in Russia or Central asia?

you cannot be both, an expert on raw materials /rare earth and an expert on geopolitical issues. you mix in all your contributions all these aspects up.
you cannot simply press the ignore button on a company , simpy because it is located in central asia and tell us s.th about geopolitical issues, without knowing anything what happens in Russia and central asia.

My advise: please focus on your expertise and tell your readers precisely, what your expertise is.

And remember that in the courty of one of your favourties, 35 mine workers have been killed by policemen.

regards, andech from germany (Ph.D. , political scientist, )

31 Kettl Alfred October 9, 2012 at 12:37 am

Dear Mr. Lifton,
As a investor in Stans, I feel that it is my duty make people aware of the huge potential of this Heavy Rare Earth mining and metal producer. You made this below pasted interview in June, so at that time you could not be aware of, that exactly at that time STANS ENERGY ( HREE ) produced the first batches of Dysprosium…the first producer, worldwide outside China, if considering your statements.

Latest News from Stans Energy:
Boris Aryev, Chief Operating Officer of Stans Energy Corp. (TSX-V: HRE, OTCQX: HREEF), (“Stans” or the “Company”), is pleased to report that, as part of its ongoing operational testing at the Kashka Rare Earth Processing Plant (KRP), the company has produced dysprosium, terbium and gadolinium metals from its metals fabrication facilities. Listed below are the quantities and purities of metal fabrication results:

Rare Earth Metal Weight (Kg) Purity FOB Metal Price (USD) FOB Oxide Price (USD)
Dysprosium 3.3 99.9% $1200-1250 $900-950
Terbium 0.8 99.9% $2550-2650 $1580-1680
Gadolinium 18.7 99% N/A $66-68
* Rare Earth prices taken from http://www.asianmetal.com on October 4th, 2012

Now, I would like to paste parts of your interview (http://www.theaureport.com/pub/na/13618), just to make sure that I haven’t got it wrong here:

http://www.theaureport.com/pub/na/13618

TCMR: What other critical rare earths are you watching?

JL: The big issue in magnets is the HREE dysprosium. There is not now, nor has there ever been, any production of dysprosium from outside of China. There are several possible significant dysprosium sources coming on-line in the next two to four years from hard-rock sources outside of China.
Dysprosium is the problem metal for everyone, because no hard-rock source has ever been put into production

MY COMMENT: ..except Stans Energy and that during past 3-4 month!!!

So anyone interested in one of the worlds biggest mining and heavy REE metal Producer with already proven Process: see http://www.stansenergy.com/
This is just my personal opinion as a private Analyst, so I don’t suggest to invest in that company, but I like more people getting aware of a great opportunity. You can get all information on their website.
There are always risks in mining business, just some examples:
geopolitical location: South Africa, for instance…who would risk a dime in a mine there in this time of turmoil? Malaysia: chances for LAMP unknown
Financing,debt: some mines and just oxide producers investing nearly a billion and no sight when they ever will be in the green and some still years away from establishing production
Process: some are in huge debts already and not even proved that their process will work….could take years to optimize, achieving a acceptable purity.

Stans is located in Kyrghiztan, which turned into a Democratic state. Sure they still struggling, BUT during past year they fully understood that for them mining is the most important tax revenue. Past 3 months they established and implemented new policies to ensure the security of foreign investors investments.

32 Curtis October 14, 2012 at 12:06 pm

Dear Jack, thank you so much for your articles and comments that helped me a lot evaluating risks and chances of the different RE players.

During my research I stumbled over the number one marketing tool of most companies: basket prices. In the case of Lynas they seem to be very misleading. Not only because they haven’t been updated for weeks (reflecting the ongoing LREE price decline) but also because they are advertising products they could not seperate even if they were given a permission to produce in Malaysia.

As I understood your comments it is not easy to find a place to seperate these elements outside of China. But even if it would, can you give us an insight or estimate of the costs involved seperating these HREE?

Thanks in advance with kind regards from Germany
Curtis

33 Geoff Alford October 16, 2012 at 6:24 pm

Gareth,

What of NTU.asx in Australia, which has an overwhelming HREE profile?

Chinese interests (Conglee) hold 20% interest

34 Geoff Alford October 16, 2012 at 7:07 pm

Dear Jack,

I got the names wrong – mea culpa

What of Northern Minerals (NTU.asx) in Australia, which has an overwhelming HREE profile? Dudley Kingsnorth is on the Board. Chinese interests (Conglee) hold a 16% interest. and Lynas (LYC.asx) 7%

At this stage, Northern Minerals primary focus is exploration and development of rare earth elements (REE) at its Browns Range and John Galt project in northern Western Australia.

The Company has confirmed high value, heavy rare earth elements (HREE) at Browns Range. The discovery is particularly significant due to the nature of the xenotime mineralisation, which supports easy processing and a relatively quick and low cost path to production. A feature of the projects is the dominance of HREE in the results to date. This includes high levels of dysprosium and yttrium, which are in particularly short supply. The presence of the HREE differentiates the Browns Range project from the majority of other potential new REE projects around the world, which are generally dominated by light REE.

In 2012 on the pathway to production, a key milestone is the maiden JORC Code Compliant Resource.

35 Geoff Alford October 16, 2012 at 7:24 pm

Re NTU,

I forgot to add that the company informs me that they expect to be in production of HREEs in 2015.

36 Gareth Hatch October 16, 2012 at 7:32 pm

@Geoff Alford: Northern Minerals is on Jack’s list, in the original article above.

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