The television commentator and former Jesuit, John McLaughlin, used to make me laugh when he would tell a panelist of an opposing political view: “Once again you’ve stumbled upon the truth, even though you don’t know how you got there.”

The New York Times recently reported the facts of a story entitled, “China to Invest Billions in Electric and Hybrid Cars,” but failed to stumble upon the truth. So let me do that for the Times and for your benefit, dear readers:

China, as part of its national plan, a goal centrally set by those in overall charge of its economy, announced yesterday that its motor vehicle industry will be required to build one million electric and hybrid motor vehicles in the next few years. I believe that this means that the industry will be required to reach a production rate of one million electrifed motor vehicles, the size of passenger cars, per year.

This is part of an overall plan to marshal and deploy China’s natural resources and its resources of intellectual property for the benefit of its own people, first. How much more logical can it get than that as a reason to conserve precious natural resources such as the rare earths?

The New York Times points out in the above story:

“The announcement, analysts say, is another example of how China seeks to marshal resources and tackle industries and new markets. The plan also underlines what China describes as its growing commitment to combating pollution and reducing carbon emissions.”

When I was in Beijing in the first week of August, three weeks ago, one of the other (I was a speaker at the plenary session) speakers at the Chinese Society for Rare Earths 6th Annual Rare Earths’ Summit, stated that a goal of the next two five-year plans, to be completed in 2020, was to have 330 GW of wind-turbine-generated electricity installed by that time. The speaker pointed out that this would take 59,000 metric tonnes of neodymium, calculated as 28% of the rare earth permanent magnet alloy, neodymium-iron-boron, since each 1.5 MW wind turbine generator will require one tonne of rare earth permanent magnet alloy.

The same speaker who was from the Chinese rare earth permanent magnet manufacturing industry didn’t mention how much of the heavy rare earths would be required for the project. I will estimate that at most it would be one thousand tons of terbium and three thousand tons of dysprosium.

In any case the total requirements for these new (not replacement) uses for neodymium, would be the total production for three years at the most recently achieved high production rate of neodymium, and as much as five years of terbium and two to three years of dysprosium.

If the neodymium demand is to be met, and this means that China, AS THE SPEAKER SAID, decides to use only rare earth permanent magnets for its wind turbine electric generator program, then it would require that three years’ production of the contained neodymium, at the rate it was mined in China in 2008, among all the rare earths mines there, be reserved for Chinese domestic magnet and wind equipment manufacturers and be targeted for the Chinese domestic market!

I think that it is crystal clear, that China is not reducing the production of rare earths on a long term basis and is not reducing their export on a short term basis. It is in fact pausing to:

• physically clean up the rare earth mining sector;
• eliminate illegal mining and smuggling of this precious green resource;
• consolidate the rare earth mining industry under the largest state-owned base metal producers of iron, copper, and aluminum, to prepare to ramp up the Chinese domestic production of rare earths both to meet and to guarantee the success of its long-term green strategy.

This is called long term strategic planning for those in Washington and on Wall Street who don’t understand why the Chinese are ‘depriving us’ of this vital resource. This process is also called ‘conservation of domestic resources’, by the way.

As to electric and hybrid cars, they require neodymium, dysprosium, and terbium for the magnets in the rare earth permanent magnet electric motors – both that drive them and that power their accessories. Some or all may also use lanthanum in nickel metal hydride batteries, as all hybrids made today currently do. A. In any case, whether or not the Chinese electrified cars use NiMH batteries, they are being designed to use rare earth permanent magnet electric motors. A million such vehicles will probably require just one million kg (1,000 metric tonnes) a year. Oh, did I mention that they will need also 10-20 tonnes of terbium and up to 50 tonnes of dysprosium. All of this new demand will be added demand not replacement demand, by the way.

I have no doubt that China will remain the world’s largest producer of the rare earths indefinitely. In the near term, perhaps over the next 5-10 years, China will need to import the ‘light’ rare earths lanthanum and neodymium, to make up any shortfalls created by its proposed quantum leap in demand in the face of the temporary reduction of production, for environmental and reorganization reasons. If the non-Chinese light rare earth miners get their acts together in time so that they can produce light rare earths at a lower cost than their Chinese competitors are able to do, then both Molycorp and Lynas have a good chance of success even in the long term.

The real issue for the future of rare earth utilization and therefore of mining, is the continued growth of the use and need for the heavy rare earths, terbium and dysprosium.

These ‘heavy rare earths’ are believed by the Chinese to be in short supply domestically. China today is the world’s only producer of heavy rare earths, mostly from southern Chinese deposits known as ‘ionic clays’, although significant quantities are also produced from the Bayanobo region (even though they report in Bayanobo only in small quantities) due to the overall massive amounts of rare earths mined there. Nonetheless, China believes that its own domestic supply of the heavy rare earths has between 5 and 30 years remaining at present levels of use.

This means that the real supply opportunity in the non-Chinese rare earth mining sector, is for those deposits that have above average proportions of heavy rare earths, to be brought into production as quickly as possible.

It is a horse race among those non-Chinese juniors with commercially (i.e. economically) recoverable heavy rare earths.

They are:

Canada

1. Great Western Minerals Group
2. Avalon Rare Metals
3. Quest Rare Minerals

(Note: some of my colleagues have urged me to add other Canadian juniors to this list, such as Matamec Exploration, but I know little about that company and will reserve my judgement on them for a future time, when I have had time to study Matamec Exploration and to visit its site.)

USA

1. Ucore Rare Metals
2. Rare Element Resources (a light rare earth deposit but with significant europium only)

Republic of South Africa

1. Rareco (in conjunction with Great Western Minerals Group)
2. Frontier Rare Earths (private at this time)

The success or failure of any of the above, will depend on the quality of their deposits, the efficiency of their extractive metallurgy, the ability of the global rare earth refining industry to service them, and the growth of the Chinese, Japanese, Korean, and Indian domestic markets.

Disclosure: I own shares in Great Western Minerals Group, and I am a paid consultant in business development to Ucore Rare Metals and to Frontier Rare Earths.

by Tom Heap – BBC – Published: May 19, 2010

From electric cars to wind turbines, environmentally-friendly technology around the world needs rare earth metals. But China – where over 90% of these minerals are mined – is saying it now wants to keep more for its own industry.

The leafy banks of the Birmingham and Worcester canal may be an unlikely place to discuss a looming industrial crisis but it was here that Professor Rex Harris of Birmingham University took me on his hydrogen-powered electric barge.

The super efficient motor, like most electric vehicle motors, uses rare earth magnets.

Rex gave me two matchbox sized neodymium-boron magnets, offering me £50 to push them together.

His money was safe, the magnetic field was too strong. Such power is vital to green technology, so much of which is based on the efficient generation, use and storage of electricity.

So we need to be sure of good supply of rare earth magnets.

“We worry about peak oil,” he says, “we should worry about peak magnets as well.”

Dangers of dependence

Most came form the United States in the 1960s but tightening environmental regulations and a price war closed the last Californian mine, handing China a virtual monopoly.

American strategic metal consultant, Jack Lifton has been warning the US government of the dangers of dependence.

“Last year the Chinese announced their regular five year plan, looking ahead to 2010 to 2015.

“They said they would continue to reduce the export of these materials to the West and that they were considering stopping the export of certain of them.”

The Chinese motives are pretty clear. They want Western users to do their manufacturing in China and they need supplies for their own ambitious wind energy programme.

They plan to build 120 GW of wind generated electricity by 2020, more than Britain’s entire electricity production.

That alone demands a full year’s supply of rare earth metals.

The former Chinese leader Deng Xiaoping once remarked “There is oil in the Middle East, there is rare earth in China.”

Environmental concerns

Japan has already woken up to the implications of this by building up stockpiles.

Toyota, who make the rare earth guzzling Prius hybrid car, is considering opening its own mine in Vietnam.

The United States is worried about supplies for the military while the UK government has examined the risks for our own plans for more electric cars.

The search is now on for alternative sources of rare earths, with mines planned for California, Australia, Arctic Canada and even Greenland.

But they are delayed by environmental concerns stoked by the Chinese experience.

Their principal source is Baotou in Chinese Inner Mongolia where enormous open-cast mines scar the landscape whilst refineries leak vast quantities of polluted water into the landscape.

Independent expert, Jack Lifton says we can’t demand zero impact. If we want green technology then we need to mine, he says. “The green road always starts with black earth.”

Cleaner alternative

However, Professor Animesh Jha at Leeds University thinks he may have a cleaner alternative.

He has discovered that titanium dioxide ore could be an important source.

The purification of this chemical, commonly used in paints, leaves a residue of rare earths. He believes this could by-pass the Chinese and the environmental problems of mining.

“There are very nice deposits of titanium oxide all over the world… Norway, India, Brazil, US. They all have rare earths in them.”

Combine Professor Jha’s technique with the fruits of new mines and the careful recycling of rare earth metals currently in use in our laptops and mobile phones and we may be able to provide sufficient supplies in the future.

But new processes take time to perfect and new mines take years to come on-stream.

That still leaves a long gap when the green revolution will rely on the economic and political judgement of China’s exporters.

[ The BBC Radio 4 audio program on which the above article is based, part of the Costing the Earth series, can be heard here].

The Wall Street Journal yesterday, January 19, 2010, reported that:

“A key supplier of Toyota Motor Corp. (TM) moved to secure a long-term source of lithium in Argentina, in one of the first global natural-resource plays of the electric-car age.”

Today, January 20, 2010, it has been disclosed that the same Toyota “supplier” has also extended its discussions with Canada’s Great Western Minerals Group for the exploration and development of that company’s two heavy rare earth rich properties in northern Saskatchewan. The press release from the company begins:

“Great Western Minerals Group Ltd. announced today that, at the request of Toyota Tsusho Corporation (Tokyo Stock Exchange – “8015T”; Nagoya Stock Exchange – “8015NG”), it has extended the expiry date of the non-binding letter of intent (the “Letter of Intent”) between Great Western Minerals Group Ltd (“GWMG” or the “Company”) and Toyota Tsusho Corporation (“TTC”), originally announced in the Company’s news release of July 21, 2009.

If you now recall that last year this same Toyota “supplier” entered into an agreement with the government of Vietnam to explore and develop the rare earth elements deposits at Dong Pao in Vietnam you see a pattern. Toyota is moving aggressively to secure its long term supplies of the critical metals for the electrification of the private motor vehicle.

Toyota is both hedging its bets and securing its future ability to manufacture any of the currently used or proposed technologies for the power trains of electrified motor vehicles.

It is the only OEM automotive company in the world with such an actual degree of vertical integration. Toyota today designs and builds both its own nickel metal hydride batteries for its full hybrid Prius type power train, and the lithium-ion batteries it is testing as well. Its actions in securing supplies of the critical metals both for batteries and electric motors (rare earths and lithium) show that the company is clearly committed to continue manufacturing any and every viable technology for the electrification of motor vehicles. Toyota’s actions are also a vote for the steady development of electrified vehicles by an experienced and profitable mass manufacturer.

Clearly any resource company in which Toyota invests must go to the top of the list of such companies in the probability of commercial success category.

Clearly Toyota is the leading OEM automotive manufacturer in terms of long term strategic planning.

Disclosure: I do not own shares in any company mentioned in this article, nor am I employed by them in any capacity.

Yesterday at the Seeking Alpha Web site, John Petersen published an excellent article on the new Electrification Coalition, titled “Rapid Transition to Grid Enabled Vehicles Not Possible or Desirable.” I suggest you read this article right now, if you haven’t done so already.

To paraphrase John Milton, “logical analysis is a dangerous thing, drink deep or drink naught of the logical spring.”

I want everyone to print the following paragraph by John in his article, and to read and to understand it:

“Batteries are commodities, as are all of the raw materials that are used to make the batteries, motors and other components required for a [Grid Enabled Vehicle]. The roadmap assumes away critical issues of raw materials availability by proving that the elements exist in nature and then ignoring fundamental natural resource development issues like location, economics, environmental impacts and the difference between known mineral resources and developed mineral reserves. It also assumes that recycling issues will resolve themselves despite the fact that the only class of ARRA battery manufacturing grants that went begging was battery recycling.”

As usual, John has zeroed in on the two key points of logical absurdity in this latest set of directions on how governments should spend taxpayer money for private interest:

1. This group does not understand the difference between “present in the earth’s crust” and “available for use by mankind,” and
2. There is no safe, economical, recycling method for recovering the lithium from lithium-ion batteries.

Unelected, poorly educated bureaucrats, throw money at nice presentations such as the outlined in John’s article. The money has been allocated to their use by elected, poorly educated, politicians whose advisors are agenda ridden interest groups. In government speak this process is called “investing in science and technology.”

We’re watching just another lobby being born. This will be the infrastructure spending for electrification lobby. It’s an interest group not an agenda.

by PAUL MASON – BBC WORLD NEWS / NEWSNIGHT – Published: Nov 17, 2009

LONDON – Above ground, factories in China are churning out goods to be shipped around the world, below it, lies rare earth metals which are crucial to nearly every 21st century technology.

Paul Mason reports on a rare commodity in hot demand [features an interview with Jack Lifton].

by ALISHA HIYATE – THE NORTHERN MINER – Published: Nov 6, 2009

WASHINGTON, D.C. – Jack Lifton has an urgent warning for the United States when it comes to the supply of rare earth elements (REEs) — metals that are essential to everything from cell phones and LCD screens to military applications and hybrid cars.

Addressing attendees here at the first annual Infocast Risk Management for Critical and Strategic Metals conference, Lifton cautioned that the States’ nearly total reliance on China for rare earths may jeopardize the nation’s access to the high-tech metals in the future.

“When everything is made in China, it will be a Chinese decision whether you can have these things,” the author, consultant and rare earth expert told the audience. “I think we’re reaching a serious choking point here. We must develop production of rare earths in this country right now because it takes a while (to get production online).”
Once a producer of rare earths — the 15 lanthanide metals plus yttrium — the U.S. now relies on China for 95% of its supplies.

Over the three-day conference, attendees largely representing industry, government, and explorers of rare earths and other minor metals, heard that the U.S. — which is also now dependent on foreign supply for other strategic and essential metals, including germanium, tantalum and lithium — is right to be concerned about the situation.

Although the overall market for rare earths is small by volume, demand is on the rise, from 124,000 tonnes rare earth oxides (REO) in 2008 to a projected 200,000 tonnes REO in 2016, according to Dudley Kingsnorth, executive director of Industrial Minerals Co. of Australia.

Recent developments have shown just how precarious the U.S.’s position may be.

Exports from China have been falling steadily by about 6% a year, Kingsnorth said, and while he doesn’t see exports falling more dramatically than that in future, he does predict that China’s rapid consumption of the metals could cause it to run out of heavy rare earths in 20-30 years. While China provides 95% of the world’s rare earths supply (India and Russia are minor producers), it consumes about 60%.

And that may explain why, in August, a report by China’s Ministry of Industry and Information Technology called for a complete ban on exports of some heavy rare earths — the most valuable and in demand of the REEs — terbium, dysprosium, yttrium, thulium and lutetium. A severe restriction on exports of the REEs neodymium, europium, cerium and lanthanum to a combined 35,000 tonnes a year, was also proposed.

Mark Smith, CEO of privately owned Molycorp Minerals, said that the spectre of a ban and additional restrictions have underlined the sense of urgency surrounding rare earths.

“We need to do something about it — not just look at China and hope they supply the rest of us forever,” Smith said. “China doesn’t have unlimited mining capacity.”

Molycorp’s Mountain Pass operation, which first began production in 1952 and came back online at the end of 2007 after being shut down for five years, is the sole U.S. producer of REEs.

Seeking to bolster its own manufacturing sector and create jobs, China is making the shift to new technologies, including flat-screen TVs, wind turbines and electric vehicles. To that end, it will not only consume more of its own resources in future, but also continue to reach into Africa, Australia, Canada, and other parts of the world for more.

“We’re all focusing on the fact that China is the leading producer (of rare earths),” Lifton said. “We need to focus more on the fact that China is a leading consumer.”

China’s centralized economy means that it can make the switch to new technologies quickly and efficiently. Much of its 4-trillion-yuan (US$586 billion) stimulus package is going into making that switch.

“They don’t have to spend a year in Congress to decide how that money is going to go out,” said Noah Lehrman, senior vice-president of Hudson Metals, a New York City-based company that supplies minor metals to industry.

Environmental concerns are also putting a crimp in Chinese production to the tune of about 10%, Kingsnorth said. The country is in some cases enforcing its own pollution laws. In other cases, word of chemical spills and other environmental damage spreads quickly through the Internet and other new technologies, pressuring the government to crack down on operations that are not up to code.

While many presenters and panelists sounded the alarm on rare earths, Chris Hartshorn, research director of Lux Research, a firm that provides strategic advice on emerging technologies, advocates a more measured response to a potential rare earths crunch. There may well be some REEs that will be in short supply and for which there are few or no alternatives, he says, but that’s not the bulk of them.

“It depends on where you are in the value chain,” he said in a post-conference interview. Hartshorn explains that while China may well impose further restrictions on exports of certain raw metals, “I would be surprised if the export of components (further down the value chain) would be restricted (to the same degree).”

The U.S., European Union and Mexico have taken their complaints about China’s export restrictions to the World Trade Organization. But in the meantime, the squeeze on Chinese exports has Lifton urging the U.S. to look north, rather than east. Canada, he said, is a friendly neighbour with a “treasure trove” of natural resources, small population and expertise in exploration and mining that already has China and Japan making investments.

“Why aren’t we?” Lifton asked.

And as rare earth projects take a long time to get online, it might be wise for investors to get in now — but not before they educate themselves on the many ways they differ from typical mining projects.

First, REEs occur together and must be mined and processed together, then separated. That affects the economics, because some elements, namely HREEs, are more valuable than light rare earth elements (LREEs), which are typically more abundant.

Second, the market for rare earths is small and opaque, which means pricing and production information is not readily available. The uncertainty that creates for investors means the only way a new project can make it to production is if the company has an offtake agreement with an end user.

And because each rare earths deposit is unique in terms of its mineral makeup, the metallurgical process must be tailor-made for each project. That involves a pilot plant — an expensive and lengthy step that’s also necessary to prove the end product will meet the requirements of the end user.

Finally, new applications for REEs are continually being developed, says Don Bubar, president and CEO of Avalon Rare Metals (AVL-T), which means that a deposit whose makeup is skewed toward REEs that are less valuable today, may be prized tomorrow.

“There’s no perfect deposit and if you do find one, it won’t be perfect in a few years,” Bubar said. Avalon is developing the Nechalacho REE deposit, in Canada’s Northwest Territories.

One other notable characteristic of the rare earths business is illustrated by veteran miner Molycorp.

The company is developing proprietary new technologies that use cerium, an LREE it produces that’s already in oversupply. Because you can’t leave the less valuable minerals behind, “that is a really good strategy,” says Lux Research’s Hartshorn.

While no one at the conference predicted a shortage of lithium any time soon, many commented that the domination of the market by a very few large suppliers — in Chile, Argentina, Australia and China (with minor production coming from the U.S.) — is a problem for automakers looking to bring electric vehicles to market.

While hybrid cars largely use nickel metal hydride batteries, electric cars that are due in show rooms as early as late next year, starting with the Nissan Leaf, will use still-to-be-perfected lithium ion batteries, which require high-grade lithium carbonate.

Future demand for lithium, which makes for lightweight, powerful batteries, really depends on how well-received electric vehicles are.

Jay Chmelauskas, president of Western Lithium Canada (WLC-V), said “true believers” think there will be a 10% adoption rate of electric cars, and in that scenario, the world will definitely need more lithium production.

“We will not run out of lithium, but we need to bring on more supply,” he said.

But the current hoopla around lithium could lead to oversupply, Hartshorn said.

Based on a recent electric vehicle report produced by Lux Research, he said there would be no pressure on lithium from this pivotal end user over the next 10 years.

The projections indicate a looming lithium battery oversupply will be upon us in 2015 “and easily beyond that,” Hartshorn says. Indeed, the best-case scenario for lithium producers, which assumes an oil price of US$200 per barrel, predicts an adoption rate (worldwide) of 0.3% for electric vehicles by 2020, with plug-in hybrids at 3.7%.

The study took into account different existing vehicle fleets, fuel prices and incentives in different parts of world.

Irving Mintzer, a principal of energy consulting firm MEG LLC disagreed on electric vehicle takeup, saying that changes in values, rather than economic drivers like oil, would prompt a shift to electric cars. He predicted that by 2030, as many as one-third of vehicles purchased in the U.S., or about 5 million cars, could have electric drive trains.

The amount of takeup depends not only on incentives offered by governments, but also on infrastructure, which Hartshorn noted depends on action by typically slow-moving utilities. Only a few have started to consider electric vehicles as a critical part of their future planning.

What’s certain is that all the recent hoopla around lithium and the electric car has spurred a flood of juniors to explore for the metal. Dominated as the industry is by a few giants, like Chile’s Sociedad Quimica y Minera (SQM-N) (SQM), that may be a risky place to be.

Novis Smith, vice-president technology of LithChem Energy International, had a warning for new entrants into the lithium space, reminding the audience that SQM has blown away the competition in the past by dropping prices. SQM, which produces lithium from brines in Chile as a byproduct of potash, is the world’s largest producer of the metal.

“They’re the 800-pound gorilla in the room and they’ll do what they want to do,” Smith cautioned.

Copyright © 2009 The Northern Miner.

Johan de Nysschen, President of Audi USA, recently vocalized what is on everyone’s mind in the OEM automotive world when it comes to the Chevrolet Volt. His basic sentiment that the Volt is an idiotic concept, is widely shared wherever in the world cars are designed , built, and marketed by existing mass producers.

In general, among the marketing executives of the world’s existing OEM automotive industry, the opinion of the Chevrolet Volt “extended range” plug-in hybrid passenger car intended for private use, is that it is a product with only a tiny niche market of wealthy individuals who wish to show that they are green spirited. For them, the Volt would be a “positional good” as defined by the late Fred Hirsch who wrote for London’s Economist, on topics such as the social status imputed to the owners of “positional goods” such as one-of-a-kind paintings or jewels.

The “bet” in Detroit, Stuttgart, Paris, Turin, Tokyo, and Shanghai is that the Volt will never be mass produced.

The real tragedy of such concepts as the cobbled together, increasingly Rube Goldberg-ish, Volt is the waste of precious resources of time and money being drained from the recently impoverished American taxpayers, for what is essentially a badge of honor toy to be owned by those elites for whom money is not a problem, and to be owned for no other purpose than to show adherence to a poorly understood (by them) economic vision of a green world, to be attained without any consequences for their privileged way of life.

There may be one day a transition to electrified transportation as a replacement for transportation, powered by internal combustion engines utilizing fossil fuels directly. Such a transition will not start with the Chevrolet Volt. It is an evolutionary dead end, and notwithstanding the further waste of the scarce resources of money, time, and intellect which the US government will continue to throw at General Motors, its days are probably numbered also.

By STEVE GORMAN – REUTERS – Published: Aug 31, 2009

LOS ANGELES (Reuters) – The Prius hybrid automobile is popular for its fuel efficiency, but its electric motor and battery guzzle rare earth metals, a little-known class of elements found in a wide range of gadgets and consumer goods.

That makes Toyota’s market-leading gasoline-electric hybrid car and other similar vehicles vulnerable to a supply crunch predicted by experts as China, the world’s dominant rare earths producer, limits exports while global demand swells.

Worldwide demand for rare earths, covering 15 entries on the periodic table of elements, is expected to exceed supply by some 40,000 tonnes annually in several years unless major new production sources are developed. One promising U.S. source is a rare earths mine slated to reopen in California by 2012.

Among the rare earths that would be most affected in a shortage is neodymium, the key component of an alloy used to make the high-power, lightweight magnets for electric motors of hybrid cars, such as the Prius, Honda Insight and Ford Focus, as well as in generators for wind turbines.

Close cousins terbium and dysprosium are added in smaller amounts to the alloy to preserve neodymium’s magnetic properties at high temperatures. Yet another rare earth metal, lanthanum, is a major ingredient for hybrid car batteries.

Production of both hybrids cars and wind turbines is expected to climb sharply amid the clamor for cleaner transportation and energy alternatives that reduce dependence on fossil fuels blamed for global climate change.

Toyota has 70 percent of the U.S. market for vehicles powered by a combination of an internal-combustion engine and electric motor. The Prius is its No. 1 hybrid seller.

Jack Lifton, an independent commodities consultant and strategic metals expert, calls the Prius “the biggest user of rare earths of any object in the world.”

Each electric Prius motor requires 1 kilogram (2.2 lb) of neodymium, and each battery uses 10 to 15 kg (22-33 lb) of lanthanum. That number will nearly double under Toyota’s plans to boost the car’s fuel economy, he said.

Toyota plans to sell 100,000 Prius cars in the United States alone for 2009, and 180,000 next year. The company forecasts sales of 1 million units per year starting in 2010.

As China’s industries begin to consume most of its own rare earth production, Toyota and other companies are seeking to secure reliable reserves for themselves.

Reuters reported last year that Japanese firms are showing strong interest in a Canadian rare earth site under development at Thor Lake in the Northwest Territories.

A Toyota spokeswoman in Los Angeles said the automaker would not comment on its resource development plans. But media accounts and industry blogs have reported recently that Toyota has looked at rare earth possibilities in Canada and Vietnam.

(Editing by Alan Elsner and Mary Milliken)

Copyright © Thomson Reuters 2009. All rights reserved.

I recently read an Autoblog.com article entitled “Chevy Volt’s 230 mpg rating, ad campaign comes under fire from Bill Ford, AdAge“. It was poorly edited, poorly fact-checked and poorly written. William Clay Ford, could not have said what the article attributed to him in the context described.

The Ford Motor Company has a first-class battery development group directed by Ted Miller. That group developed its own version of the rare earth metal-based  nickel metal hydride (NiMH)  battery in-house, and then bid out the mass production of that battery to experienced manufacturers. The winners for the mass production contract were Sanyo and Panasonic, which are today the primary and alternate suppliers of this type of battery, for the four full-hybrid models offered by Ford. Ford has so-far sold 100,000 full hybrids utilizing NiMH batteries and the future looks very promising for its best-in-class Ford Fusion Hybrid.  This is a fantastic machine that gets 700 miles on a tank of gas, and can go nearly 50 miles an hour in electric mode only-albeit for just a few miles at that speed.

So, if “Bill” Ford was saying, as the article implies, that his company doesn’t “have any particular expertise in batteries,” [and that therefore] they’ll probably buy the batteries from established manufacturers for their own electrified cars, he must have been talking about lithium-ion batteries. However, this is a suspect interpretation also, because Miller’s team has a great deal of experience in lithium-ion batteries also. Miller himself came to Ford from France’s SAFT, a pioneering company in lithium-ion battery technology.

I don’t know what Bill Ford said in the interview quoted by Autoblog.com, but then again they don’t either.

Ford has vastly more experience of vehicle electrification than GM. The nonsense about the MPG rating of the Chevrolet Volt only reinforces the consequences of Ford’s superior expertise.

All the recent nonsense about the Chevrolet Volt’s fuel use and performance is just hot air, until the car is on the road and its actual performance under real driving conditions and with ordinary drivers is measured. I propose a side-by-side test of the Prius and the Chevrolet Volt to settle which is the more practical and versatile car.

A friend of mine who lives in Saskatoon, Saskatchewan has driven a 2007 Toyota Prius, which he bought new, for the last two years.

He does not garage his Prius in the winter and told me last summer, when I was visiting, that during the winter of 2007-8 the air temperature in Saskatoon reached -30 °F on more than one occasion.

Nonetheless, he said, his Prius never once failed to start on any winter morning.

Yes, the Prius nickel-metal-hydride battery has a heating and cooling system, which drains some power from the battery to maintain it above a set temperature in the winter and below a set temperature in the summer, but his Prius has made it through two Saskatoon winters without a failure to start or operate.

I was in Yellowknife, Northwest Territories, Canada two weeks ago, and I noted that the Yellowknife Fire Department Chief’s car is a Prius. I asked a lady fire captain who was driving the car if the department had had any weather problems with the car. She said “no” even on the day that yellowknife experienced an air temperature of -50 °F in the winter of 2007-8. Admittedly the car is garaged, but it was in use at -50 °F.

Yes, I know that the Prius is a full hybrid with a gasoline fueled ICE and the Volt is an “extended range” plug-in hybrid (whatever that actually means), but I would never even consider buying a Chevrolet Volt until I know in what air temperature range it can be operated. I live in Detroit where below 0 °F winters are common, and I think the Volt is a fair weather car.

I want General Motors to succeed, so I ask, politely, that a Chevrolet Volt and a Toyota Prius and, to be fair, A Ford Fusion be run through their paces by ordinary drivers in a variety of climate extremes, road conditions, and road grades.

No matter how the EPA calculates MPG it won’t matter at all if the car’s range is small, or if it won’t function in extremes likely to be met daily by most drivers outside of Southern California.

I really don’t think GM’s engineers have solved all of the basic problems faced by the Volt, and I think that all of the talk about fuel economy and acceleration is just to mask how impractical such a car is and what a tiny market segment it really has.

If I’m wrong just match it up now with existing EVs and let’s see the results that prove me wrong.