Jack Lifton

Rapid Transition to Grid Enabled Vehicles Not Possible or Desirable

John,

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 you and read and 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 GEV. 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 you have 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 this one. 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.

Rare Earths: A China Price

And wouldn't a two tier price system for iron-ore be such a violation? It all depends on what diplomatic language, smoke, and mirrors are provided as cover, so long as anyone who matters cares about the WTO. China has told us in no uncertain terms that it is under no obligation to sell us its domestic natural resources simply on "price." AVAILABILITY is the issue, and China can and simply will say that all such resources have been sold to its domestic companies as "off-takes."

Jack Lifton

The Rare Earth Metals, Uranium, and Thorium: All Commonly Found Together; And All Desired By China

Dear Dr. Hatch,

Thank you for identifying and bringing the data in Dr. Mariano's 1989 paper to my attention to resolve this issue. Dr. Mariano and I both presented papers at the rare earth seminar at the 2009 Society for Mining Exploration and Engineering (SME) annual meeting in Denver this year, and I remembered discussing the thorium content of the bastnaesite at Mountain Pass with him, but I could not find my copy of his paper to quote.

Your diligence and attention to detail is much appreciated.

Thorium is now on its way to becoming a valuable technology metal, and, like uranium, it can be safely recovered with modern mining technology.


On Nov 15 09:33 PM Gareth Hatch wrote:

> "There is no thorium at Mountain Pass in California, for example,
> where the REO is bastnaesite, another mineral."
>
> According to Anthony Mariano, in his January 1989 paper in 'Reviews
> in Mineralogy and Geochemistry', the bastnasite at Mountain Pass
> contains approximately 0.1% thorium.
>
> While this is a pretty low initial concentration, it still has to
> be dealt with. In 1998, the California EPA suspended chemical processing
> at Mountain Pass, after a radioactive waste water spillage incident.
> While I don't have specific data to hand, one might surmise that
> the radioactivity in that waste water, resulted from the presence
> of thorium.

The Rare Earth Metals, Uranium, and Thorium: All Commonly Found Together; And All Desired By China

Note also that U3O8 is triuranium octoxide

On Nov 15 06:13 PM loquacite wrote:

> U3O8 is not a mineral. Carnotite is a uranium-vanadium phosphate.
> That's a mineral. U3O8 is a discrete molecule, triuranium hexoxide,
> which can occur in many different minerals, including carnotite.
>
>
> U3O8 does not always occur in REOs, nor does thorium. There is no
> thorium at Mountain Pass in California, for example, where the REO
> is bastnaesite, another mineral.

The Rare Earth Metals, Uranium, and Thorium: All Commonly Found Together; And All Desired By China

You are right about carnotite, which contains vanadium as well as U3O8 , but where did you get your information about Mountain Pass. It is my understanding that the deposit has measureable thorium, which reports in the cerium separation. I understand that the deposit at Mountain Pass was originally noted because it was radioactive and the propspectors were looking for uranium.

To say that U3O8 does not always occur in REOs is meaningless and tautological. If you mean that REO containing minerals do not always contain thorium and/or uranium, so what?

The point here is that REOs were mined in the past from monazite sands in Australia and Florida, for that matter. It was typical for those "sands" to contain thorium.


On Nov 15 06:13 PM loquacite wrote:

> U3O8 is not a mineral. Carnotite is a uranium-vanadium phosphate.
> That's a mineral. U3O8 is a discrete molecule, triuranium hexoxide,
> which can occur in many different minerals, including carnotite.
>
>
> U3O8 does not always occur in REOs, nor does thorium. There is no
> thorium at Mountain Pass in California, for example, where the REO
> is bastnaesite, another mineral.

A123 vs. BYD and Other Irrational Battery Investments

John,

You should be teaching a course in the psychology of the market. The comments below are literally part of a universally applicable template that everyone should apply to the so-called technology stocks. When I read them a moment ago, out of context, I though to myself that "This guy is talking about the thin-film PV solar cell industry."

I'm organizing as co-chairman a conference called "Technology and Rare Earth Metals 2010," TREM 2010, the details of which will be posted shortly at iags.org. The conference will be held in Washington, DC, on March 24-25, 2010, and I'm inviting you to be a speaker and panelist (with travel and compensation to be negotiated, of course). Obviously, John, I don't know if you can accept this offer, but I know if you do that the 300 attendees expected will be added to significantly by your readers. The keynoter will be either a member of the US Cabinet or a distinguished (are there any other kinds) US Senator. The point is that official Washington, and not just policy wonks and commentators [i.e., people like you and me] is taking note of the importance of natural resources to the future of our civilization.

Back yo you, John


On Oct 28 06:01 AM John Petersen wrote:

> Freya, the biggest market losses I've ever taken came from my failures
> to separate emotion and optimism from financial facts. I understand
> all too well that we're going to need every storage technology that
> exists and many that haven't even been invented yet. So when I'm
> looking at a sector that has effectively unlimited growth potential
> across the board, it's fairly easy to predict that the biggest upside
> potential is found in the stocks that are beaten down in price. I'll
> take a $50 million market cap with a $1 billion revenue potential
> over a $200 billion market cap with a $1 billion revenue potential
> any day of the week. I'll also take a $500 million short term revenue
> potential over $1 billion revenue potential a decade out. The goal
> is simple, buy them when they're undervalued and sell them when they're
> overvalued and don't fall in love with an idea.
>
> While there isn't any one technology that will get a definitive nod
> from any administration, bureaucrats are as subject to PR hype as
> the rest of us. The fact that many of them are ideologues that have
> never worked for companies that had to produce something and make
> a profit in the process can complicate the issue. When you add a
> presumption that resources will be as available in the future as
> they have been in the past, you can get some pretty unreasonable
> policy initiatives (think fuel cells and ethanol). I also can't discount
> the importance of having an ear in high places, although I can think
> of any number of places where the ear listened politely and still
> said no.

A123 vs. BYD and Other Irrational Battery Investments

Once again John Petersen has shed light on the contradiction between the reality of scientific progress and politicized science.

The Wall Street casino plays musical chairs. Individuals bet against each other to see who has the greatest staying power in the flavor of the moment contest while companies formed from illusions are born and vanish spending their IPO money on raising more money through pronouncements clothed as announcements.

In the mean time institutional investors mostly ponder getting in and out as fast as possible and hoping to catch the bubble as early as possible.

We use safe reliable and cheap incandescent lamps to read about how "environmentally" correct expensive short-lived fluorescent lamps will soon make our lives "better." We start our safe reliable long lived internal combustion engine (fueled with fossil fuel) powered cars with safe reliable cheap lead-acid batteries and listen on the car radios to stories of how expensive lithium-ion batteries of unknown reliability, durability, or cycle life are going to make our lives "better." We listen to foolish celebrity scientists as well as ignorant celebrity singers and actors telling us how mining is evil while they live private lives of profligate excessive use of energy produced by burning huge quantities, as much as any ten or a hundred of us mere ordinary folk use, of the fossil fuels they condemn while they waste huge quantities of the mined metals the production of which they condemn.

The rare earth mining space has become now just like the lithium-ion battery space, so before any of you rush out to buy shares of rare earth mining stocks please read my "The Rare Earth Crisis of 2009," which you can access through jackliftonreport.com. It's free, and I hope it will put the rare earth industry in perspective for you as John Petersen has put the lithium-ion battery space in perspective.

The Need for a New Security in Rare Metals New Production

Mayascribe,

Please look at my article, "The Rare Earth Crisis of 2009," accessible from jackliftonreport.com

There are so many factual errors in the articles above and such poor analysis, based upon those errors, that I do not wish to comment on them.

I will comment on the rare earths' space in my report on the conference on "Risk Management of Strategic and Critical Metals," which I co-chaired and which just concluded last Thursday evening.

There is a great deal of upside in the rare earths' market. There will be a shaking out in the next year.

Thanks

Jack


On Oct 22 03:40 PM Mayascribe wrote:

> Jack: You've been one mighty busy man lately. Below is a link to
> Jim Kingsdale's website and within comes an article written by Jim
> Jubak. I used to be a huge fan of him, but lately he seems to have
> lost some of his luster.
>
> Jubak writes about REE's and how all the REE stocks are overbought.
> I disagree.
>
> www.energyinvestmentst...
>
>
> When you find some time, would you please comment on this article?
>
>
> Sorry to see that Jim Kingsdale has cancer and has begun to shut
> down his website. I liked his writings.

3 Mining Stocks to Hedge China's Rare Earth Policies

I have written an analysis of "The Rare Earth Crisis of 2009" that is too long for Seeking Alpha. It can be found at jackliftonreport.com. I have been writing about and consulting to the real rare earth junior miners for so long that two of them are now well under way to becoming producers in the next 24-36 months. I will post an article on SA next week naming these two producers-in-readiness and contrasting them with the wannabes that are today trying to grab some publicity and sell stock not rare earths, not ever.

Battery Investing for Beginners, Part 4

John,

The "mature segment" of the OEM automotive industry has no faith in the technology or the demand for PHEVs or EVs. The design and very limited production of such vehicles is entirely driven in the west by politics. If American, Japanese, and European car makers do not worship at the shrine of electrifciation they will be and have been punsished by governments allowing free market forces to overwhelm them. So long as they waste government resources on sillyness like the Chevrolet Volt they will be rewarded with high salaries (at the top level), but they know that as a reward they will also take the blame when either the technology or the market fails to live up to political expectations.

The Wall Street Journal today refers to the room temperature IQs of America's Congresspeople. The problem really can't be better analyzed.


On Oct 15 10:46 AM John Petersen wrote:

> Experienced, thanks for the link, it's always interesting to follow
> what people are working on. I'm inclined to agree with renim that
> this one is a long way from commercialization, but everything that
> takes us a step closer to the goal has value. Thanks for taking the
> time to read and comment.
>
> Renim, I wish I had more high level contact in the auto industry
> because I'm not certain how serious the automakers are about PHEVs
> and EVs and I have grave questions about whether the small percentage
> of the population that can afford them will actually buy them. I'm
> skeptical enough that I wouldn't pay a premium to be part of the
> play but uncertain enough that I wouldn't take a short position either.
> In the end it's all good because everything that takes us a step
> closer to the goal has value.

Battery Investing for Beginners, Part 2

John,

For production at Ovonic Materials there were two 1000 lb capacity continuous operation vacuum induction furnaces, a powder metal production facility (very fine powder in the micron and submicron range), and a Raney nickel reactor for charging nickel-metal hydride alloy powders with hydrogen. The entire operation is in a building designed to safely process with hydrogen, and the powder metal production equipment is in a separated room capable of automated operation under inert atmosphere.

I have known Stan Ovshinsky for 61 years, and I never once knew him to stint on costs by buying second rate equipment.

I am going to guess that duplicating the facility would cost between 10 and 20 million dollars and the skill of the remaining workforce is priceless.

I believe that GWMG picked up the facility (in a leased building) for at most $2 million-it was a steal if it goes back into operation.

Jack

On Oct 01 10:28 AM John Petersen wrote:

> Jack, in Don's defense the fact that Great Western had bought the
> Ovonics facility in Troy slipped by me too. I bought a few Great
> Western shares a while back because you spoke so highly of the company.
> I thought I was simply buying into a mining and reserve play and
> did not understand that the processing capacity was part of the package.
> Now you have me dying of curiosity. I don't know whether you have
> the numbers at hand or not, but I'd love to know what Energy Conversion
> Devices invested in Troy originally and what Great Western bought
> the facility for.

Battery Investing for Beginners, Part 2

Don,

May I respectfully remind you that the Ovonic Materials manufacturing plant in Troy, Michigan, is intact, and is now onwed and operated as a specialty alloy production operation by Great Western Technology, Inc., the parent of which, Great Western Minerals Group, is trying to get funding for the development of its rare earth mines in Canada, the Republic of South Africa, and the United States. The business plan of GWMG is to vertically integrate first its rare earth magnet materials prodcution in the UK at its Less Common Metals, Ltd. subsidiary and then its NiMH battery electrode operations at GWTI.

The reason that Ovonic Materials was sold is that COBASYS, Chevron Ovonic Battery Systems, would NOT source NiMH battery electrodes or electrolytes from nearby Ovonic Materials. Instead it got these items from Japan. The reason for that is the fact that rare earth raw materials became unavailable from the US in 2002 when Chevron Mining shut down MolyCorp's Mountain Pass (California) operations after Chinese predatory pricing put MolyCorp out of the rare earth production business.

Energy Conversion Devices, Inc. moved its NiMH battery eelctrode production to China in the late 1980s in order to secure rare earth raw materials for battery component operations. Ovonic Materials, although fully facilitized to "mass produce" NiMH battery components became just an R&D center, and, after ECD decided to concentrate on thin film amorphous solar photovoltaic cellls, became superfluous. With great foresight Great Western bought the Ovonic Materials facility two years ago as part of a long term strategy to become a vertically integrated producer of fabricated rare earth alloys for REE based technologies.

Now if only the people and/or government of the USA had the same amount of foresight we would already be making NiMH batteries domestically from domestic raw materials.

Now, Don, please tell me why I should believe that the US government's policies for "manufacturing" lithium-ion batteries are going to work out differently? Are the policy making geniuses of Washington now funding the development of American lithium or cobalt or nickel mining? Gee, it seems they are fighting those "evils" tooth and nail. Shall I hold my breath while they pat themselves on their asses for devloping a domestic battery industry without bothering to give equal weight to developing the natural resources for manufacture batteries of any kind?

Good luck.


On Sep 30 05:47 PM Don Harmon wrote:

> There is no other choice right now than to buy batteries from Asia
> for U.S. Car companies, and until the proposed plants actually fo
> get built from the ARRA grant money, it will be years before they
> are shipping product here in the U.S.. In the meantime we will be
> paying the going rate for any Lithium-ion vehicle batteries including
> shipping which just makes the costs that much higher.
>
> Had we adopted this recent DOE philosophy a decade ago, when Ovonics
> was in it's infancy and when LiFePO4 was first invented by Dr. John
> in Texas, maybe we wouldn't be at this point now? But for Chevron
> sitting on the NiMh patents for 12 years, and nobody wanting to back
> the early developers in the U.S. of Lithium Iron Phosphate, we now
> find ourselves in almost the same position with batteries as we have
> with oil. Once again, dependent on a foreign source for the technology
> development and the product itself.
>
> When will America wake up and decide to reclaim it's previous glory
> as a world class manufacturer? I fear it is already far too late
> for that to happen. What I see is manufacturing continuing to go
> off-shore to lower wage markets and the only domestic activity being
> done here is assembly, quality control, and warranty service. <br/>
>
> This will be our lot in life from now on because we just can't support
> the investment for new factories anymore in America.

The Need for a New Security in Rare Metals New Production

ddot,

I have received no remuneration wahtsoever from any Canadain mining company, nor do I, nor have I ever owned a share in any mining company upon which I comment..

Thor Lake, now to be officially known as the Nechalacho REE Deposit was first mapped 30 years ago, but the development of Chinese rare earth mining made it uneconomical to develop until now. Additionally the importance of heavy rare earths, only now recognized as critical metals for high technology, has made deposits such as Nechalacho and Great Westerns' Benjamin and Douglas Rivers deposits in Saskatchewan very important.

Also I think that both Thor Lake and certainly Mountain Pass are larger net deposits than Lynas Mt Weld district deposits. The problem with the high grades of Lynas is that they are predominantly of the light rare earths.

If you want to see a truly high grade rare earth ore look at Steenkampskraal, a former AngloAmerican operation in the Republic of South Africa, now to be re-opened by Great Western. It has a significant amount of 17% grade ore , which is exceptionally rich in the heavy rare earths, and although this ore body is relatively small its grade and previous development will allow GWMG to bring it into production within 2 years. This will allow GWMG to vertically integrate so that it mines, refines, and produces metals and magnet and battery alloys within its own operations with its own materials.

Lynas has already spent several hundred million dollars on development; it now needs north of 500 million more to bring it into (full?) production. This will take 3-5 years. This means that a debt of between 2/3 of and 1 billion dollars would have to be serviced from no revenues until 2012-2014. What private investor will accept a ROI that does not begin for 5 years and even then might be less than bank rates? If Lynas share price were to be used as an index of its "value" or "price" then this means that CNMC would have had to offer as much as i billion dollars for the company. if the American system of valuation is used this would mean that Lynas would be worth the total value of the metals in the ground, which would be several billion dollars. Such sums can never be repaid unless rare earth prices soar. Institutional investors no longer are making such bets. I believe that CNMC withdrew because the bank of China refused to finance the deal at the new price not becasue of Australian government opposition.

By contrast even at today's prices GWMG could deliver $500,000,000 of rare earth "oxides" from Steenkampskraal in the next 7 years. The investment for re-opening the mine and building a concentration and separation plant and a metals production by molten salt electrolysis plant could be less than 150,000,000. Payback could begin in 3 years, because the production of magnet and battery alloy could bring the value of the Steenkampskraal output to more than 750,000,000 giving GWMG suffcient margin to repay the debt with a high rate of return.

Avalon is in a very much better positon than Lynas also. In the short term it may not beat GWMG to market, but Avalon has a huge ore body and will be a producer of rare earths for generations.


On Sep 26 12:50 AM ddot wrote:

> Jack
> Lynas is an advanced project and even after this last setback it
> will be one of the first producers of REE outside of China. It is
> one of the richest REE mines in the world and has a team of people
> that have been working behind the scenes for a few years now and
> obviously now what they are doing!!!!!!!!!
> Your comment about selling Lynas to buy North American stocks (who
> have been on the scene for five minutes) is biased and shows that
> you are obviously receiving remuneration of sorts from these companies
> and for me you have lost your credability

The Need for a New Security in Rare Metals New Production

Mayascribe,

As you know I am not a licensed investment advisor. For myself I would invest in both Canadian companies (I do not do that, and I never have, because I try to keep neutral). I would weight my investments to reflect where they are. For Avalon to go from $3.50 to $5 is a rise of 47%; for GWMG to go from $0.30 to $1 is a rise of 267%. I believe that both will happen.

If I held Lynas I would sell it now and invest in the Canadian companies.

That's what I would do hypothetically, of course.


On Sep 24 03:35 PM Mayascribe wrote:

> Jack: A few questions--
>
> i) What do you think the chances of Canada nationalizing Great Western
> and Avalon, for national security reasons?
>
> ii) If you were to put 20K into Great Western and Avalon, what percentage
> would you put into each stock.
>
> iii) Would put any of the hypothetical money into Lynas?
>
> iiii) Is there any other REE company that you would consider investing
> in?
>
> Thanks, Jack. You know what I'm up to..."vulturing" around.
>
> Great, great article.

The Need for a New Security in Rare Metals New Production

No useful REE is rarer than platinum; the world production of platinum in 2008 was around 200 metric tons. You are however correct in questioning why REEs are so cheap. I have come to believe that unless the prices of REEs rise sharply there will be no incentive at all for institutional investors, because at current costs only one or two (Canadian) REE mining ventures could ever produce a return on the very large investment necessary today to bring a mine into production.

I believe that this is the simple reason-although, perhaps, not the only one- that CNMC walked away from Lynas today. I also believe it is the main reason that Goldman-Sachs seems to have left the rare earth space after making some serious investments.

Vertical integration by REE producers is now a minimum necessary, but maybe not sufficient, condition for success by a rare earth producer.Mine to market or mine to magnet adds critical value, and if the REE prices increase it will make the vertically integrated producers sure winners.


On Sep 24 11:07 AM Skaiste wrote:

> Tell me if I'm wrong, but where is the logic behind recent REE mining
> stocks run up? Rhenium cost around $193 per troy ounce. Many REE
> are rarer than platinum, but are much cheaper in price. If platinum
> or other PGM mining is barely profitable at these price levels, how
> REE company is expecting to make profits? No wonder many where on
> the brink of collapse, until Chinese stepped up.