Counterpoint: Supply and Demand in the Rare-Earths Market 2015-2020

by Jack Lifton on August 1, 2013 · 28 comments

in China, News Analysis, Rare Earths

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At the Perth AusIMM Critical Minerals conference held in June this year, my esteemed colleague Dudley Kingsnorth presented updated forecasts for the near-term future of the global rare-earth market. Some of the details were recently reported by InvestorIntel. Prof. Kingsnorth’s forecasts always command attention; I would like to offer my own perspective on what we might expect in the latter half of the present decade.

No nation has ever industrialized faster than the Peoples’ Republic of China is now in the process of doing. But even so, and even though we admire China’s breathtaking industrial (re)evolution, common sense tells us that every so often, even the champion runner must take a breather to recover his equilibrium so he can continue, or realize that he cannot continue the pace (note: I’m an old-timer, and I can’t abide political correctness in the written word, so I won’t alternate ‘he’ and ‘she’ or substitute some form of ‘person’ in common phrases). This is finally what’s happening in China. Optimists will say that China is taking a breather, to see just where the new base line of its GDP growth should reside. Pessimists will tell you that the game is over, and that China cannot keep expanding forever. As usual the reality lies somewhere in between.

I emphasize the state of China’s economy, because in the case of the rare-earth total supply chain, China is most of the global ball game. Certainly for the rest of this decade, as China goes, so goes the rare-earth market. China, as of this writing still produces 95% of the world’s rare-earths supply and China, as of this writing, still consumes more than 75% of the world’s rare earth supply. Consumption here does NOT mean domestic internal use; it means that China adds the majority of the final value to its rare-earth supply and even that is usually in the form of components of more complex assemblies (vacuum cleaners, automobile components, or wind turbine generators, for example).

It is becoming clear that China likely does NOT possess the world’s largest resources and reserves of the rare earths. That title, so my colleague and TMR co-founder Gareth Hatch informs me, may well belong to Greenland or Canada. Let’s call them together the North Atlantic Mineral Resource Zone (NAMRZ). That said, China certainly possesses the world’s largest (by volume production capacity) rare-earths total supply chain, and its very large reserves of rare earths could supply the world’s demand for centuries. The rare earths in the NAMRZ are not only undeveloped, but they are in a zone that currently does not have enough access to capital or technology domestically, to create a total rare-earths supply chain of the magnitude of the one in China.

The ideal solution for the NAMRZ would be to put in place as much value addition as possible, so as to capture the most benefit from its vast resources of ALL of the rare earths. The business model of Innovation Metals Corp. (IMC), co-founded by Gareth and to which I am a technical advisor, accomplishes just that. IMC would reduce the tens of thousands of tonnes of mixed rare-earth concentrates that could be produced in the zone from hundreds of thousands of tonnes of mineral concentrates, to a few thousand tons of rare-earth chemicals, and ultimately metallic forms, which are much more valuable and profitable.

But let us turn back to where the rare-earths market may be in the latter half of the decade. First of all, China is not reducing the production of rare earths and condensing the size and numbers of players in the rare-earth total supply chain, to single out the rare-earth industry only for environmental issues. China is modernizing. Credit is too easy; savings are too large; consumption is too low; and production capacity across the board is too large in China, for an economy that is slowing down its rate of growth to a new normal. Large operating companies in the rare-earth sector and beyond, would do well to notice this ‘new normal’ in the American, Australian and other economies.

China, in other words, is trying to streamline its economy to become more responsive to the markets and to lower costs across the board, so as to remain competitive globally, even as its standard of living and labor costs increase rapidly. It is frequently pointed out that the world’s ‘second-largest economy’, on a per-capita basis, is still only one quarter of the size of the US economy, on a per-capita basis. What is not pointed out, however, is that China’s middle class is growing, while America’s is declining. This means that discretionary purchases of gadgets that depend on rare-earth enablers for some of their properties, such as all miniaturized personal entertainment, communication, data processing, appliances and the like will continue to increase in China, even as its economy slows to a new equilibrium of somewhere between two (the best case) and seven (the current case) times the rate of growth of the US economy. You don’t need to be a mathematician to understand that a Chinese economy that consistently grows at a rate of more than twice that of the US, will surpass the total GDP of the US within just a few years (unless there is an American economic miracle).

I foresee that the Chinese domestic total supply chain for rare earths will become more competitive as it reduces the number of marginal and loss-making individual players. It is difficult to see China’s production capacity for rare earths ever being less than the world demand. If, as Prof. Kingsnorth recently forecasted, we see 200-240,000 tonnes of rare-earth demand in 2020, that number is still less than China’s current capacity for their production at the mine site, reflected perhaps in Prof. Kingsnorth’s forecast of 240-280,000 tonnes of rare-earth SUPPLY in the same year.

The only impediments to continued Chinese dominance of the rare-earth total supply chain would be:

  1. Political insecurity of supply caused by Chinese actions;
  2. The creation and rise of efficient non-Chinese total supply chains, with cost structures less than those in China (note: if non-Chinese mines produce at lower cost than Chinese mines, then the buyers of this lower-cost feed stock will first of all be Chinese rare-earth processors and end users, unless the rest of the non-Chinese total supply chain is put in place and operates at an even lower cost!); and
  3. The rise of an outlier such as India or Brazil, as a lower cost actor in the total supply chain space. This would be, like Chinese dominance, an economic phenomenon that is very unlikely to occur in nations with less centrally managed economies than that of China.

China today produces all of the world’s heavy rare earths as well as the majority of the world’s neodymium/praseodymium. Thus China has a virtual monopoly on critical rare earths as they can be defined by today’s consumer demands. China does not seem to have, however, any hard-rock deposits with economically recoverable heavy rare earths. Therefore, the extremely inefficient and costly-to-process ion-adsorbed clays are the only resources available in the world today, for terbium, dysprosium, and yttrium, which together are three of the five or so “critical” rare earths as I define them (there is growing evidence that europium is not in short supply and will get less likely to be, even if its new production is limited to just China).

I agree that market forces drove the rare-earth exploration boomlet of the last few years, but that market was capitalized by the casino-like gamblers who create and bet upon commodities within the venture exchanges of Toronto, Vancouver, Perth, New York, and London. The total supply chain issue was completely ignored by the hucksters and promoters in those markets, but its centralization in China and the dearth of the skills to create or expand it outside of China, kept genuine productive capital investment out of the non-Chinese market.

For the last six years, at least, I have heard over and over again the lament, “why don’t the big end users give us off takes that are either paid for, or that we can use as collateral to borrow to develop our mines?” The reason is that they had nothing to gain and a great deal to lose, by investing in the lowest value-adding part of a natural-resource supply chain – the development of the mineral ore body into a producing mine. None of the Global 1000 manufacturing companies buys directly from a mine. They buy from their tier-one suppliers who in the rare-earth supply chain are probably the last of 7-10 steps in the end-user directed total supply chain.

While the promoters owned the market, productive capital was as scarce as junior miners who understood their place in the rare-earth total supply chain.

The realization that there is a complex total rare-earth supply chain is a recent development. Those who have recognized it are now scrambling to either place themselves as far downstream in that chain as they can, or to partner with those who are freestanding members of the chain, downstream from them. As I see it, the only hope for non-Chinese juniors who are in the medium/ heavy rare-earth space, is to combine their efforts to support a central toll-separation facility such as the one being developed by IMC, so as to bring their costs of moving downstream under control. Most of the investment in the rare-earth junior mining space was speculative and wasted. The survivors will downsize their participation in the total supply chain, so as to have the lowest break-even possible, and they will combine their efforts into the least number of separation/purification and metal/alloy making plants possible in order to assure profitability.

I sincerely believe that if a group of juniors were to approach large end users with such a plan, and with the skill sets in place from existing qualified technology vendors, then the end users would buy in.

In the mean time, if you want to know what will be the supply and demand of the rare earths for the rest of this decade, I would ask the Chinese for details of their industry consolidation plan, their timetable for switching from an investment / export to a domestic-consumption economy, and their political plans to co-operate within the WTO rules. After that, I would ask the Japanese what they are going to do about their lack of the initial step in the rare-earth total supply chain. I’ve heard enough anecdotes to give me serious doubt that Viet Nam is going to be an easy partner; I don’t doubt that once India gets into the production of rare earths, it will expand into the total supply chain and become a competitor, not a partner, of both Japan and then of China.

I predict that only one of the two large-scale existing light rare-earth producers will survive. I don’t know yet which one I would pick between Molycorp and Lynas. I predict also that there will be several non-Chinese medium / heavy rare-earth producers that will survive and thrive, but only by moving down the supply chain, as far as they can, to reach a reproducible profitability at the lowest cost.

Rare-earth production could well reach 240-280,000 tonnes by 2020 but almost half of that would be cerium, most of which will have little in the way of unique use. Therefore the real supply of useful and valuable rare earths will be slightly more than half of those figures.

When I project a future basket price for a project, these days I only price the critical rare earths from a deposit. Try that for a dose of optimistic reality.

Disclosure: Jack Lifton is a member of the Technical Advisory Board for Innovation Metals Corp. At the time of writing, he holds no shares or stock options in, nor does he consult to, any of the publicly traded rare-earth companies mentioned above.

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1 Peter Borten August 1, 2013 at 10:02 am

“I predict also that there will be several non-Chinese medium / heavy rare-earth producers that will survive and thrive…”

Jack, can you comment on Great Western Minerals at this point? Are you still as enthusiastic about them as you were 12 and 24 months ago?

Thanks!

Peter

2 kbusby August 1, 2013 at 12:08 pm

Jack, I second Mr. Borten’s question re. Great Western Minerals. They are the ree company that pioneered the vertical integration idea in the industry, a concept Molycorp is trying to duplicate. In fact, they once tried to buy Great Western but were rebuffed. Great Western would seem to fit the bill in terms of what you suggest is required for success. They already have well-established and rapidly expanding ree alloy manufacturing facilities with a long history and established customers as well as a CREO-rich mine that is close to refurbishment as a supplemental corporate component. In fact, the company shouldn’t even be classified as a “miner” it primarily is a manufacturer of ree alloys. The middle portion of the chain, at least initially, could be handled under a tolling arrangement, again as you suggest. I do agree that it will either be Molycorp OR Lynas that will survive. My bet there goes with Lynas given their own CREO-rich neighboring property.

3 Lou Pearson August 1, 2013 at 1:03 pm

Jack,

Does the technical expertise exist outside of China to inform the processes required to run the regionalized, tolling separation operations that you have recommended? Lou

4 Cedric Lark August 1, 2013 at 2:40 pm

Jack,
I also endorse the questions concerning Great Western Minerals because it now seems clear that this company is putting all its eggs into the South African basket at a time when the mining industry and politics generally in that country have become more volatile and unpredictable. Therefore this enterprise seems to have abandoned being a serious player in what you term the NAMRZ area. As such it seems to differ from other REE companies and I am wondering whether you still feel that it represents a viable model for others to follow.

5 Jack Lifton August 1, 2013 at 2:57 pm

Kbusby and Peter Borten,

One of you (kbusby) said about Great Western that ” They are the ree company that pioneered the vertical integration idea in the industry.” Certainly in the twenty-first century and with regard to beginning the process of vertical integration at the mine for the REE supply chain outside of China that is true. Gary Billingsley and Jim Engdahl the Chairman and CEO of GW when Less Common Metals was acquired certainly successfully pioneered the idea of vertical integration among the REE juniors in the current round of REE supply development. I applauded the idea at the time, and I recall specifically being told that GW outbid Avalon for LCM by a small amount. There may also have been other bidders. GW was not alone in being farsighted, but it was the one that stayed the course first.

Just to set the record atraight I was told that GW agreed to the original terms of the Molycorp offer, but when GW’s management arrived at Molycorp headquarters they found that Molycorp’s board had changed the terms and walked away from the changed deal whatever it had become.

I agree that GW shouldn’t be classified as a miner, but that is because it is not yet mining anything. It is therefore still a “junior” miner, which is an exploration and/or mine development company by definition. If GW wished to become principally a manufacturer of specialty alloys with a mining development division I believe it would have to change its registration with the Canadain and foreign exchanges upon which it is listed.

Note that Molycorp is a better fit to the REE vertically integrated model than any other non-Chinese company at the moment. But there is a problem when I try to compare the Molycorp model of vertical integration with that of GW. Molycorp is mining light REEs in California, and its wholly owned subsidiary, Molycorp, Canada, as well as its wholly owned subsidiary in Estonia both separate and purify rare earths into pure REE chemicals. Both subsidiaries also make rare earth metals and Molycorp Canada makes magnet alloys also. Molycorp Canada may also make bonded rare earth permanent magnets, but I think it is principally a supplier of the powdered alloy for that purpose to other non-Molycorp bonded magnet makers in China. The problem with trying to analyze the Molycorp business operations model is that it is not at all clear whether the California operations at Mountain Pass are allowed to send any raw materials or finished goods (FCC catalyst material, glass polishing powder, or didymium oxide or carbonate) to Molycorp China’s Chinese operations for sale or further processing. It is clear that Molycorp China cannot send materials out of China except as they meet the export allocations set for the company by the Chinese government. Thus Molcorp China is mostly or entirely, it would seem,a supplier to the Chinese rare earth industry. GW has today only LCN operating on Chinese REE metals to produce magnet alloys, but it does have the SteenkampKraal mine under refurbishment, as has been said, and it has a system in place to make its own neodymium metal from oxide, which I assume will come from China until Steenkampkraal and its planned associated separation and purification facility are up and running. If GW accomplishes all of this it will be the first non-Southeast Asian REE entity to be vertically integrated through the production of magnet alloys that begins at step one with an operating mine.

I have to say that a lot of money is out there looking for “undervalued” REE ore bodies as they refer to the dead-ended juniors. There is also some money looking to aggregate a developing REE mine with a separation/purification operation and a metals/alloys maker. All of the skills to do that exist outside of Asia as do a plethora of ore bodies. The problem now is to build a REE conglomerate outside of southeast Asia that is lean and mean and can compete head to head on price, delivery on time, and delivery to customer specification. It still can be done, but it must be done soon if it is to be done at all.

I have no connection to GW at all. I have never even spoken to its current management. All I know is what I know about the industry in general and what I glean from public information about the company.

6 hackenzac August 1, 2013 at 4:10 pm

As for Molycorp surviving or not, I give you two simple words, ‘cash’ and ‘flow’. They have cash flow so their lack of hrees problem is not really much of one considering the current values of some of the hree juniors. That old idea that they could buy a Ucore or a GWM is still completely valid and entirely possible. As to either Molycorp or Lynas being the sole surviving lree operation, I think that Molycorp has the superior chops. Considering that they’re about to drop their operating costs dramatically and ree prices seem to be heading up, there is blue sky ahead for them imo.

7 kbusby August 1, 2013 at 5:23 pm

Jack, Thank you for your reply. The subject of the global ree industry is a fascinating one. It is filled with dynamic change in a constantly changing global economy–many moving parts. Increasingly more assertive and nationalistic China remains central as does tight financing for risky mining ventures. Re. Great Western Minerals being the pioneer in ree industry vertical integration, I was referring to the ROW and should have so specified. Re. GWM primarily being a manufacturer of ree alloys, I was speaking in the context of actuality and reality and not some classification schemes. When I invest in a company, I don’t care as much how it is classified as I do in where it makes its profits now and into the future. Investors’ perception of Great Western as just one among the many junior miner hopefuls, most of which will fail, has been a disservice to the company. The recent change in the company’s description on Stockhouse, presumably coming from the company, is hopefully only the start of correcting this mis-classification of GWM; “Great Western Minerals Group Ltd. is an integrated rare earth processor which [sic] manufactures specialty alloys used in the magnet, battery, defense and aerospace industries.” Eventually, when fully operational, it would kind of like classifying Nucor along with the manufacturers of taconite. Now and at least well into the future, ree alloys will generate the vast majority of its cash flow and eventually profit. Their Steen Mine never was seen as anything more that a supplier to their manufacturing end further downstream. Re. Molycorp China, I always have seen that as the really weak link in their “global” chain. In terms of imports and exports, that operation will do no more than what the Chinese Communist Party decides is in the best interest of the PRC. It is well beyond the total control of corporate. And I see their Estonian facility as more of a museum quality relict of the Stalinist Soviet Union. Re. Lynas, I do think it will be the survivor, especially with a new CEO. Its superior ores now being mined, compared to Mountain Pass, and their neighboring CREO-rich deposit should assure that “victory”. The superiority of the Lynas ores is very clear in the TMR graph and tables. Thanks, again, for your thoughts and reply. I am wondering if your Detroit suburb is Southfield?

8 Paumanok IMR August 1, 2013 at 5:40 pm

I believe the master plan is to continue to convince China that the US dollar has value for as long as possible, and exchange paper currency for materials (what a bargain). In the future, mining assets in the West will become more valuable as a result of this master plan, and at some point 25 years from now, it will be economical to dig them up. You want to ultimately be the last kid on the block with ice cream in the freezer, so when it gets hot, every one comes knocking.

9 Aat Oskam August 1, 2013 at 5:55 pm

Hackenzac, name the Molycorp off-take agreements? Lynas (although they have a bad start, see the investor-call today) has many, almost the total initial production of 11.000 tons/year. Ree prices heading up is good for both, anyway. I do not think, as Jack does, that it will be Lynas or MolyCorp, both have a bright future, provided the markets improve a lot, and soon!

10 hackenzac August 1, 2013 at 6:10 pm

You’re just desperate for validation of your viewpoint Busby which is long on opinion and short on facts. There’s lots of ifs ands or buts with your cherished Great Western Minerals. You called this respected analyst crooked on Stockhouse because he will not put enough wind in to your desperate wings and here you are toadying up when you have nothing but insults elsewhere. So Jack finally gave in to the incessant cries of what about Great Western? mewling from the cult and you’re still arguing with a guy who has said what he thinks unvarnished and you just can’t respect that. Face it dude. They’re outta steam. Steen is not incidental to their alloying ambitions. Steen is the bedrock of the company. They’re out of time and they’re out of money and without a buyout, they’re out of business. That’s what the man said so deal with it child.

11 4now August 1, 2013 at 6:39 pm

hackenzac
GWG is out of money ? Sure ? 45mill is a lot more than most of the 300 projects will ever have.
True is they are delayed because they want to minimize costs of future production.

12 kbusby August 1, 2013 at 7:14 pm

hackenzac,

Wow! This is just about the most childish post I ever have seen! Either an immature and brainwashed MCPHead or a child playing with his/her parent’s computer must explain such a temper tantrum. Me, I was just having a polite conversation with Jack Lifton, that is how it is done. Problem with facts, do you, GWM “otta steam” , Steen the “bedrock of the company”, “out of money and without a buyout, there out of business”. LOL, in your childish dreams. And, no, I am not looking for “validation” from anyone. I assume your sad outburst of a post will be deleted. I certainly will ignore and of your subsequent posts.

13 kbusby August 1, 2013 at 7:19 pm

hackenzac,

Wow! This is just about the most childish post I ever have seen! Either an immature and brainwashed MCPHead or a child playing with his/her parent’s computer must explain such a temper tantrum. Me, I was just having a polite conversation with Jack Lifton, that is how it is done. Problem with facts, do you, GWM “otta steam” , Steen the “bedrock of the company”, “out of money and without a buyout, there out of business”. LOL, in your childish dreams. And, no, I am not looking for “validation” from anyone. I assume your sad outburst of a post will be deleted. I certainly will ignore any of your subsequent posts.

14 hackenzac August 1, 2013 at 7:22 pm

I’m not parsing their financial data to argue with you so I’m going to use ballpark numbers. They had 45 million in March, borrowed money, about half of a 90 million dollar bond that diluted the float to nearly half a million shares. Their burn rate is 2.2 million per month and this is August, 6 months later so subtract 11 mil from that 45 leaving them with 34 mil. The capex from their PEA is about 175 mil and that’s just to get Steen open and build a mixed chlorides plant. It does not include a separation regime. Supposedly they’re looking for some tolling arrangement, a nebulous plan to say the least. They have backpedaled from their GQD deal and there is some mystery malfeasance that also cost them time and money. There’s the problem. Their vertical integration doesn’t have a plausible middle and they don’t nearly have the money to get there regardless so they must do a JV, arrange an offtake agreement, reverse split with more dilution or sell something. They are not vertically integrated and they are beholden to Chinese whim, not a good spot for a so called ROW rare earths company. As of right now, their business model is theoretical and the shares are extremely risky imo.

15 hackenzac August 1, 2013 at 7:33 pm

Now you’re in character Busby. Here’s what you wrote today on Stockhouse
“Jack, the former ree guru and who now appears to me to be merely a paid promoter for select companies, has a response article in todays’s TMR.” And yet here you are toadying up but the reality is that you don’t respect the guy because he won’t validate your thesis and you call him crooked for all the world to see. You are exposed now get lost.

16 Allan Branch August 1, 2013 at 7:53 pm

A key point in Jack’s dissertation is that now realizing that prices cannot be manipulated (too much) and certainly not in the way that speculating investors did in 2011, China is now ensuring competitiveness at realistic prices. I repeat an earlier paper of mine that those companies able to be productive at current prices (which I have predicted in a recent report as now the bottom and therefore will continue on a normal growth curve), will survive. Being profitable may include covering loss leading mining operations with value added supply chain margins, so I agree that being vertical is a good bet.

There is a 4th reason that may impede China’s dominance and that is boycotting due to China’s lack of respect for WTO rules or its geopolitical activities (but only if there are alternatives). You can be assured there are negotiations in place planning for the alternatives.

Good points Jack.

17 nicolas pietrangelo August 3, 2013 at 3:07 am

To the dueling clowns in this communication, a few insights. First of all Jack L. has REALLY COOLED on Great Western big time. With their new leadership in place, were any doors shut? In this childish back and forth of stated opinions from ANY EXPERTS, there is little to no mention of FINAL MARKETS. Great Western has LCM (100% ownership) has accomplished many many goals-new furnances-isolation of pure neodynium-strong customer base, etc etc-and this is brushed off by you CLOWNS as not important!!! Nobody and I mean nobody mentions their DOD yittria forecasts and no mention of Great Western Technologies (100% owned)Troy, Mich in close proximity to R Bosch and BASF in eastern Mich Detroit area footprints. R Bosch now has full control of Cobasys(NIMH and Lithium batteries) and BASF will be making components of batteries like separators-electrolytes-electrodes etc NOT batteries themselves both cos for worldwide markets. For many years Ovonic battery now BASF and Ovonic materials now Great Western Technologies have supplied electrodes to the former Ovonic battery licsensees(?spelling) NIMH and had made strides with lithium components also. Also a mention of NIMH electric hybrids to be made in China for the Chinese markets for Toyota Prius family and the Honda Accord Hybrids with cars also being made in China-co is Hunan Corun New Energy in China. Present NIMH made for Toyota etc. by Prime Earth Energy(80% Toyota and 20% Panasonic). Logic would dictate Great Western Technologies knows a little bit about batteries NIMH batteries which appear, after being much maligned by the gooffy car industry like GM, to have massive numbers on it’s side vs the PATHETIC numbers put up by the lithium battery in not only the auto industry but catch what is going on in the airspace with cos like BOEING and HONEYWELL and experiences with lithium in the freight business like FEDEX and UPS. I guess you clowns arguing are more geologists than market driven business people. Time to get your heads out of the mineshafts and SEE what is going on in the world of business. PAX

18 hackenzac August 3, 2013 at 11:47 am

Hey Pax. That’s all groovy and everything. The future is indeed a bright, shining twinkle star but, there’s a whole lotta buts, the main ones being cash, execution and for most of us on the outside, the stock price. Here’s a little something on the dictates of logic: Without the mine, the mixed chlorides plant and some sort of separation regime, nothing else unfolds free of the Craw, not the claw, the CRAW! and they haven’t got the cash to do it without diluting the shit out of the stock or selling some assets, like GWTI. The risk of investing in gwg is the dilution, or worse but the reward is that they’ll get bought out or better. It’s heads or tails and I think I’d wait until the coin flips.
https://www.youtube.com/watch?v=ftgAG3Vnif8

19 nicolas pietrangelo August 3, 2013 at 12:30 pm

I love all you EXPERTS, following money trails and posing to know what the future will hold with your pseudo-science approaches. Add to that the ridiculous behaviour of children on this board it’s my toy, no it’s mine. What a bunch of CLOWNS. The circus is in town, I suggest you join them. If you ALL haven’t seen nor appreciated ALL the ENORMOUS ACCOMPLISHMENTS of GREAT WESTERN MINERALS/LESS COMMON METALS-100% owned by GWG/and what is to come from GREAT WESTERN TECHNOLOGIES-100% owned by GWG. And if you don’t APPRECIATE the MAGNITUDE of the NIMH battery in WORLD MARKETS(millions upon millions of vehicles and GROWING-Chinese made PRIUS family of vehicles and Chinese made HONDA ACCORDS ALL with NIMH batteries!!!!!!!!!!). NIMH -safe-cost effective-proven(see car and driver June 2013 Demystifying Myths about batteries) and TOTALLY recyclable RARE EARTHS and nickle-small amt of Cobalt. Did any of you clowns advise GM on their far less than ideal Li-ion powered Chevy Volt now available with incentives from both Uncle Sam and GM for mid-20,000$$$$$. And GM in their INFINITE WISDOM? loose about 50,000$$$ per vehicle. Why the incentives THEY AIN’T throwing up big numbers in sales. Unlike Toyota sales numbers with the NIMH battery powered Prius family of vehicles setting records-wait till the CHINESE sales of NIMH powered cars!!!!!!!! Not to worry Virginia Santa Claus(Uncle Sam will bail GM out again) Oh if you want to recycle Lithium batteries ask TOXCO what happened a few yrs back @ their Trails British Columbia battery recycling facility-great simulation of the Fourth of July-god forbid don’t add any water to the CONFLAGRATION. For those CLOWNS referred to considering joining the CIRCUS-try the Emmet Kelly or Marcell Marceu route. They kept their mouth SHUT and don’t act like a bunch of babies. Wishing you all the best in your new careers. Lamont Cranston. Yes this is the theater of the ABSURD!!!!!!!

20 aurelius August 4, 2013 at 8:21 am

Hackenzac, Derm for those of us who know you as the No. one GWG basher on Stockhouse. Why would a guy like you spend so much time bashing a Co. in which you have no interest and about which you have such a poor opinion. Who are you serving?

21 Admin August 4, 2013 at 12:53 pm

OK folks – enough with the insults and ad hominem attacks. Any further such comments will be deleted.

22 Ruirui Chen August 5, 2013 at 1:51 am

Everyone has his own opinion,so people above make comments are immature.In some means, I am more in favor of Jack.China’s rare earth industry integration is on the way,The future may have only a few relatively large representative of rare earth enterprises.Now the difficult is the issues of the group conflict of interest.And there must be one or two big company leading rare earth market overseas.I will prefer Molycorp than others.

23 Veritas Bob August 6, 2013 at 2:35 pm

Regarding the statement in the article “You don’t need to be a mathematician to understand that a Chinese economy that consistently grows at a rate of more than twice that of the US, will surpass the total GDP of the US within just a few years (unless there is an American economic miracle).”, I restate my July 16 comment from http://www.barnswood.com/tmr/wp/2013/07/the-future-markets-for-the-rare-technology-metals/#comment-5813 .

‘You wrote “we will surely see by 2020 at the latest, the return of China to its former place as the nation with the highest GDP”. Using 2012 nominal GDP figures of USD15.68 trillion for U.S. and USD8.23 trillion for China, in order for China to overtake the U.S. by 2020 would require 8.1% higher compounded average growth rate for China vs. U.S. (technically the ratio of GDP growth per year between China and U.S. needs to have a geometric average of at least 1.081). If the U.S. manages a 2% growth rate, then China would need 10.2%. Even if the U.S. had zero nominal growth rate, China would still need 8.1%, which exceeds its current growth rate. Therefore I find your proposition, while not impossible, rather dubious.’

24 Jack Lifton August 6, 2013 at 3:43 pm

Bob,

I appreciate your comment. There has been quite a bit of this type of “prediction” recently especially from the doom-sayers school of economics who seem to believe that there is an economic war going on between the US and the PRC. It’s funny I don’t remember anything at all about this with reference to the economy of the former USSR. Right up until the last days of the USSR one saw nary a drop of official wisdom about the collapse of the Soviet economy. Goldman-Sachs and Morgan-Stanley are predicting the toppling of the USA from the pedestal labeled “World’s Largest Economy” in a similar time frame to me. I’m sure that you’re right, by the way, in that 2020 may be too early, but the Chinese are determined to get us off that pedestal within the next generation. What they cannot do is to get us off of the wealthiest nation per capita pedestal in any near term. We seem ourselves however to be trying to make sure that ultimately happens also with Washington’s “let’s make beggars of them all, so they’ll be easier to control” drive underway.
China has a vast oversupply not only of rare earth mines, but, more importantly, of rare earth processing and fabricating. In our myopic part of the world we talk endless nonsense about what is essentially adding more capacity to an oversupplied world. The Chinese are confused. They have too much capacity and even so need heavy rare earth feed stocks. They might bend politically if someone proposed that they toll foreign sourced feeds tock and agree that it will be done either in a duty free zone or will be treated based on its ownership with the right to dispose of it by the original vendor. Its worth a try, but I haven’t yet seen this proposal made.

Thanks again

Jack

25 Saleem H. Ali August 6, 2013 at 4:02 pm

Dear Jack – Thanks for this insightful article and a forum for debate on supply issues. I am also curious to get further insights on the sands deposits which are being pursued by Japanese firms and also the Sumitomo operation in Kazakhstan. We are planning to expand the work of our rare earths research consortium in Central Asia as well.

26 nicolas pietrangelo August 16, 2013 at 8:09 pm

Jack, before you were so enthusiastic about GWG. That activity has wildly shut down. It seems they have accomplished much in the interrum dating back to your enthusiastic phase. This includes refining pure neodynium and increased activities both at SKK mine and at LCM. For us less than intellectuals, especially in the study of geopolitical struggles, it seems one would be more than enthusiastic about GWG new leadership(Marc Levere) and the substantial progress made by GWG towards their goal of being VERTICALLY INTEGRATED. Not sleepless in Seattle but confused in Michigan.

27 Don Kerr October 24, 2013 at 5:36 pm

Jack – Did yesterday’s Quest Rare Minerals report dramamtically change the supply side of the HREE equation? The presentation http://www.questrareminerals.com/pdfs/QRM%20October%202013%20Corporate%20Presentation.pdf
makes some stunning assertions around volume.

28 Alfonzo Zambelli March 30, 2014 at 3:11 am

Thank you, I have just been searching for information approximately this subject for a long time and yours is the best I’ve found out till now.
But, what concerning the bottom line? Are you sure concerning the source?

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