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Gareth Hatch

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  • Molycorp: A High Potential Rare Earth Miner [View article]
    Some comments:

    1) Heavy rare earth elements such as Dy are added to Nd-Fe-B alloys to improve coercivity (resistance to demagnetization), not corrosion resistance.

    2) Dy is scarcer than Nd from a natural occurrence point of view, but there are no issues of availability. It experienced a significant price spike recently, but so did all of the rare earths, including Nd.

    3) Molycorp does not manufacture magnets. It acquired Neo Material Technologies which has a division, Magnequench, that produces Nd-Fe-B powders that are used in the production of polymer-bonded magnets by its customers.

    4) Magnequench powders indeed contain little to no heavy rare earths, while achieving similar coercivities to a subset of sintered Nd-Fe-B magnet grades. They don't replace all sintered Nd-F-B magnet grades, however, and applications that require particularly high magnetic field strengths, or particularly high coercivities, still require sintered, not polymer-bonded Nd-Fe-B magnets.
    Jan 29 03:41 PM | 13 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, Nov. 30, 2011 [View instapost]
    @chihawk: I came out of the permanent-magnet (PM) industry, and prior to that did alloy-chemistry research work on rare-earth PM alloys, so my primary focus is rare earths. However, I am starting to look into niobium, tantalum and zirconium in greater depth, again from the supply-chain point of view, but working upstream towards the mine face / moose pastures. Nothing to report on just yet.
    Dec 1 09:50 AM | 9 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, July 17, 2012 [View instapost]
    Hola tripleblack...

    The confusion concerning Santoku America is understandable, given the specific language used in the announcement. I do recall that at the time there was discussion concerning the possible construction of a greenfield magnet facility in the USA. The alloys produced at the former Santoku facility (assuming they are still being produced there) can indeed be used for the production of Nd-Fe-B magnets - but by the customers of that facility, not the facility itself.

    Even if it had the equipment and facilities to produce sintered magnets from those alloys, MCP would need to have a license from Hitachi Metals to make and to sell such magnets in the USA. Hitachi has not given out new licenses in years, and is unlikely to do so any time soon, given the approaching expiration of existing licenses, and their own plans to build a Nd-Fe-B manufacturing facility on the East Coast next year.

    Interestingly, and as you pointed out, MCP eventually partnered up with others in the magnet-making realm, focusing on potential processes that apparently do not require the use of the Hitachi Metals basic composition patents.

    My understanding was that NEO (as was) owned 95% of the Zibo facility, and 90% of the JAMR facility.

    Keep up the good work with these Concentrators - I know of no better source of useful market-related REE info online :-)
    Jul 25 06:13 PM | 8 Likes Like |Link to Comment
  • REE/Strategic Mineals Concentrator - March 28, 2012 [View instapost]
    @tripleblack: the allocation was production, not export quota. Inner Mongolia has allocated 100% of the quota that was assigned to it by the Chinese authorities, to Baotou.

    Interestingly this year it has pretty much impossible to track down the official list of production quota allocations to the various provinces and autonomous regions. Usually it has been published by now.

    What we do know is that the 25kt of quota that Inner Mongolia was assigned by the authorities, is 50% of the quantity assigned to that autonomous region last year...
    Apr 7 01:47 PM | 8 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, October 25, 2011 [View instapost]
    Chihawk: the REE-bearing minerals of interest at Tasman's Norra Karr project are zirconium silicates, including eudialyte, catapleiite and others, not xenotime. There is little zircon present, and the Th and U content is very low. Initial work indicates excellent recovery rates.
    Oct 30 09:06 AM | 8 Likes Like |Link to Comment
  • The Rarest Rare Earths on Earth [View article]
    The heavy rare earth dysprosium (Dy) is important in giving "ultra-strong industrial magnets" the ability to resist demagnetization and the other negative effects of temperature - but only as additives to the light rare earths present, such as neodymium (Nd) and praseodymium (Pr), which make up the bulk (typically 75-95%) of the rare earths present.

    So yes, Dy is important - but the strength of the magnets comes from the presence of Nd (and to a lesser extent Pr) - not the Dy (additions of which actually reduce the strength - a trade off for the increased robustness of the magnet material). You can easily produce strong magnets without Dy, albeit with reduced maximum working temperatures, but without Nd, there would be no magnet.

    I'm not sure that I share the pessimism concerning the length of time it would / will take to develop the projects owned by Quest and Avalon. In addition, while I don't disagree that the USA has a shortage of people with the relevant skills for mining, it should be noted that these are Canadian companies (not American), and their flagship projects are located in Canada (not the USA). The skills situation in the USA is therefore pretty irrelevant to the future development of these two projects.

    Besides, there numerous other companies with advanced rare-earth projects (US, Canadian and otherwise), a number of which are likely to come on-stream within the next 5-7 years. You can see a current list at www.rareearths.org.
    Jun 9 04:12 PM | 8 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, March 18, 2014 [View instapost]
    @optionsgirl: the VAT mentioned in my article refers only to products produced in China. It is charged to the purchaser of the raw materials, whether they are used internally or are directly exported. If the materials are used internally to make, for example, magnets or polishing powders, and those finished goods are then exported, the VAT paid by the end user on the raw materials is refunded back to them.

    My understanding is that because this rebate is available to all end users in China that export finished goods, whether or not they are domestic- or foreign-owned, then there is no issue because the approach is evenhanded. Such finished goods are not subject to export quotas.

    The issue of FOB vs. domestic pricing in the later paragraph that you quoted, concerns the price decks that are used by juniors, in determining the assumed future values of their products. The typical assumption has been that they will sell a mixed REO concentrate, without specifying to whom such material will be sold. Given the lack of excess capacity for separation outside of China, the implicit assumption is that maybe the Chinese will buy it.

    However, such purchases would have to compete with internally sourced materials, which are purchased internally at some discount to domestic, not FOB / export prices. So those juniors who are assuming that their material will be sold into China, should be using a domestic, not an FOB price deck, from which to then discount to establish the value of their concentrate.

    Of course that assumes that folks in China will want to buy such concentrate in the first place; some of the juniors are going to have a rude awakening in this regard, given the lack of interest in such materials.

    As for Lynas and Molycorp, their processing is done outside of China, so they have the advantage of needing to compete with the FOB prices, not the domestic prices, assuming their customers are based outside of China. In the case of Molycorp, which may be transferring a portion of its material to its magnetic-materials operations in China, different mechanisms may apply.
    Apr 5 09:27 AM | 7 Likes Like |Link to Comment
  • China's Rare Earth Metals, Destructive Mining Techniques and a New Trend [View article]
    I am not sure where the original author of the Times article got his data to say that "dysprosium can make magnets in electric motors lighter by 90 percent" but it is simply not true. It implies that magnets without dysprosium [Dy] would need to be 10 times heavier than those with Dy, for the same performance, which is complete nonsense.

    Neodymium-based [Nd-Fe-B] permanent magnets that contain additions of Dy, are of principal value for their resistance to demagnetization at higher temperatures, not for weight reduction compared to Nd-Fe-B magnets without Dy.
    Dec 30 02:43 PM | 7 Likes Like |Link to Comment
  • How The Micro-Hybrid Revolution Will Radically Change The Battery Market [View article]
    Excellent article, as usual, John :-)
    Dec 28 11:25 PM | 6 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, July 17, 2012 [View instapost]
    Some points of clarification:

    a) the entity that MCP acquired from a Japanese owner makes alloys, not magnets;

    b) Magnequench (formerly a division of Neo Material Technologies, now owned by MCP along with the rest of Neo) makes magnetic powders (not magnets) that are sold to polymer-bonded (not sintered) magnet makers all over the world. The newly named Molycorp Magnequench has powder production facilities in Tianjian, China and one in Korat, Thailand.

    c) MCP now owns the Chinese two rare-earth processing and separation facilities previously held by Neo - Zibo Jiahua Advanced Material Resources (which focuses on light rare earths) and Jiangyin Jiahua Advanced Material Resources (which focuses on heavy rare earths).
    Jul 25 08:57 AM | 6 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, Nov. 30, 2011 [View instapost]
    @HardToLove: you're welcome :-)

    @chihawk: thank you for your kind words. Development of capacity in Southeast Asia is well underway. We'll be releasing more detailed information on this in the not-too-distant future, including specifics of where in Southeast Asia that we're talking about.

    @toly: thanks for the note regarding Lynas.

    @chihawk & toly: yes, we will probably look to take Innovation Metals public at some point, but we won't be rushing into that process. Our business model incorporates a variety of means of generating near-term cash flow for the company, through trading and other activities, which will allow us to do what we need to do to move things forward.
    Dec 6 11:32 PM | 6 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, Nov. 30, 2011 [View instapost]
    @H. T. Love - some comments:

    1) The separation facilities planned by Innovation Metals Corp. (IMC) will NOT be located in China, nor will they be controlled or owned by China, or Chinese entities. The research study was conducted in China because IMC had access to rare-earth specialists there, with extensive expertise in the processing of rare-earth minerals.

    2) The mixed REO concentrates that will go into these facilities will not contain thorium, since thorium and similar materials will have been removed at the initial processing stages, by the producer making the concentrate.
    Dec 6 11:32 AM | 6 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, Nov. 30, 2011 [View instapost]
    I wouldn't waste your time with this, or putting hopes on projects that claim to magnets from (non-magnetic) cerium.
    Nov 30 11:51 AM | 6 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, September 12, 2013 [View instapost]
    @jimp: I generally don't comment on the performance of company stocks. The technical challenges that Molycorp and more recently Lynas experienced, in bringing their operations up to speed, have been widely reported. Obviously that has had an impact on effective and timely production (and obviously I'm not telling you anything that you don't already know).

    I've said before that the Molycorp and Lynas projects were well into development before the REE price spikes of 2010-2011, and thus presumably their respective business models were based on the prevailing REE prices at that time, perhaps accounting for some potential drift upwards with demand, especially for Nd & Pr.

    Given that, despite the drop from the peak in 2011, current prices are still multiples of where they were in 2009 and before, one issue for both companies is that the cost of production for both companies is apparently higher than originally anticipated. This has been clear for some time for Molycorp, since the current / anticipated cost of production has invariably been discussed during their quarterly conference calls. Only more recently has this become apparent for Lynas.

    The good news, if there is any, is that the end user buyers of these materials that I've spoken with in the past year or so, can actually tolerate prices at levels higher than present levels, and still make good margins on their products. So the announcement by Lynas, for example, that they will not sell La oxide below $15 / kg, which is significantly higher than current $6 / kg "spot" price as reported by Metal Pages etc. is tolerable by many end users, especially given the assumed "security of supply" that not buying from Chinese sources creates.
    Mar 16 10:07 AM | 5 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, September 12, 2013 [View instapost]
    The updated LYC presentation states that "RE prices have decreased to levels that are now unsustainable for RE producers again". The current prices are roughly 2X the historical prices. Was the original LYC business model not built on prices similar to the historical prices?

    I don't recall seeing a projected future price desk from Lynas in the past - but did they not assume that their production was going to be profitable at those levels / margins? If so - what changed - cost of production?
    Sep 13 09:01 AM | 5 Likes Like |Link to Comment
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