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Jack Lifton

 
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  • Understanding Tesla's Giga-Scale Battery Challenges [View article]
    John,

    You couldn't be more right. I well remember when the OEM automotive industry "Giant," General Motors, told Formosa Plastics that it demanded steep volume discounts on its PVC purchases for adhesives and sealants based on its large use. The Formosa Plastics purchasing agent told the GM person that the volume use of PVC was for home decorating and that Formosa didn't care about the "few million" pounds that GM or its suppliers bought.

    It's really the same thing here, isn't it?.
    Nov 30 06:00 PM | 3 Likes Like |Link to Comment
  • Understanding Tesla's Giga-Scale Battery Challenges [View article]
    That's certainly accurate
    Nov 30 10:55 AM | 1 Like Like |Link to Comment
  • Molycorp: Misconceptions And Reflexivity Present Opportunity [View article]
    Sanjay,

    Your analysis is very interesting, and I think mostly correct. Neo was and is, as Molycorp China, just one of many players in the separation and purification of the rare earths for making magnet alloys. It specializes in the neodymium (not praseodymium-neodymium = didymium) iron boron alloy used to make bonded magnets, which constitute just 10% of the overall rare earth permanent magnet market globally. Neo is not the smallest nor the largest player in rare earth refining in China.
    in 2009 I asked Constantine Karryanoupoulos why Neo didn't buy one of the even then numerous rare earth deposits under "development." He said that Neo was the only rare earth based business in North America making profits and that it was doing so without the anvil of a money-draining mining project hanging around its neck, he said, why should Neo go into mining?
    It seems to me that Neo was sold to Molycorp at the top of the market, so that Neo shareholders were rewarded as they could not have been before and never again could be.
    It also seems to me that Neo will ultimately become a freestanding company again perhaps getting some light rare earths from Molycorp, if that entity still then exists, and buying heavy rare earths in China as always.
    The great unknown now is whether anyone outside of China will develop a heavy rare earth production industry, and, if so, whether China will allow such raw materials to be imported so as to disrupt and negate its internal allocations. This has got to be the hope and the fear of Constantine Karryanoupoulos.
    Nov 30 09:56 AM | Likes Like |Link to Comment
  • Understanding Tesla's Life Threatening Battery Decisions [View article]
    In the late 1990s Energy Conversion Devices equipped an EV1 with NiMH batteries in place of the original Pb-acid types. As I recall the car's range went from 90 to 160 miles, but the cost was prohibitive.

    Note that the NiMH batteries used today in HEVs do not have the storage capacity or the need to power the car by themselves except in emergencies and even then just for a few miles. The NiMH batteries are there to hybridize the power train in the most efficient way.

    You are absolutely right that there just could not be enough lanthanum ever produced for even a conversion of the world's motor fleet to HEV powertrains. There might be if the habit of a multi-passenger vehicle carrying one passenger weren't so ingrained in our wasteful western culture. I well remember watching Romanian Dacia pickup trucks leaving the factory in Pitesti for export to China in the 1980s. A Romanian auto engineer said to me that these were Chinese "estate" wagons (in American English this is a "station wagon"). The pickup carried four Chinese in the cab and six more in the box, he said. Alas, my recent trips to China show me that the Chinese, at least in the cities, no longer do this. I see many large sedans moving in a river of cars along the Beijing streets around the clock with one person in them.

    Throughout history only the wealthy could afford to be fat. Now that everyone in the developed world can be fat, even on a budget wasting resources is the new insignia of wealth.
    Nov 22 09:53 AM | 1 Like Like |Link to Comment
  • Dissecting Tesla's ZEV Mythology [View article]
    So, a century into the transformation of motive power from a mix of steam and muscle to petroleum based internal combustion we, the human race, have now managed to recover 80% of the useful energy in oil? what is the equivalent calculation for batteries? What percentage of the energy used to charge a battery is useful?
    Nov 18 09:18 AM | 2 Likes Like |Link to Comment
  • Tesla - Reality Is Beginning To Set In [View article]
    ICEs are not becoming or going extinct. In fact their use is growing substantially. Of this calendar year's production of "motor" vehicles I would estimate that more than 98% use ICE power. This percentage won't change, and it may decline. As the global economy grows so does the manufacturing of small cheap (ICE powered) motor vehicles.
    Look carefully at the percentage of the weight of a BEV that is the mass of the batteries. There you have the real problem. Our science and engineering are still in the Stone Age in this department, and the idea of a quick fix is a fantasy of those who do not know much about science, engineering, or manufacturing engineering.
    Nov 17 08:17 AM | 1 Like Like |Link to Comment
  • Molycorp Multi-Bagger Potential In 18 Months [View article]
    I note that Keith Delaney passed away earlier this year, and that REITA has been superseded by RETA, a unit of the American Chemistry Council, based in Washington, DC. Also I do not think that dr Stanley Trout is with Molycorp any longer.
    I'm afraid my confidence in this article is severely impacted by mistakes like these.
    The only real metric is based on meeting performance to objective criteria. In this case that objective is to make a profit mining, processing, and fabricating rare earth products. The question is now: is this project past it's sell-by date?
    You can divide the mass of Mountain Pass by the average belch volume in the Molycorp cafeteria and multiply that by the number of letters in MCP's presidents name and get just as good a figure for future profits here as any of the "predictions" I have seen. If this company is not profitable soon it will not survive.
    Nov 15 05:38 PM | 3 Likes Like |Link to Comment
  • Why Long-Range BEVs Are An Economic, Energy And Emissions Abomination [View article]
    John,

    I take it that your point, as always, is that economic determinism, rules a truly free market. It doesn't take a Nobel prize to see that you are right. The market distortions caused by the attempt of politicians to influence the market through capitalization of moral imperatives of the moment always fade away as the effects on the pocketbook begin to be felt by Joe consumer.

    The mantra is that Mr Musk must be smart because he is rich. I think Mr Musk's thinking is tied to the Upper East Side of Manhattan, Central London, and Dubai as markets. I think Tesla is already past its "sell by" date. The world actually needs a low cost reliable people's car, as it always has. The car that will be driven in the Philippines and in rural Nigeria is the business to go after. Eco-Bling is just boring. The future, as the past, belongs to efficient cheap transportation.

    Great, insightful, article as always, and as always "thus endeth the lesson."
    Nov 14 08:40 AM | 4 Likes Like |Link to Comment
  • Tesla - Reality Is Beginning To Set In [View article]
    I think that George Clooney is simply a poor man's Clark Gable. However if I were Mr Musk I would be very worried when a rich-boy-man with a lot of followers in the High School scene tires of the toy I provided for him.

    The author is right. The actual buying public for any mass produced version of the Tesla is GONE. If nothing else the young set is just now becoming aware that their financial futures are wrecked by student loans, Obamacare, and the dead-slow growth of an erratic economy. Real car makers are panicked also by the lack of real economic futures for their most important demographic. Cars are already capable of very long service lives WITHOUT MAJOR PROBLEMS. It is the manufacturers who are not ready for the END of THE MODEL YEAR MARKETING CHARADE. Government safety regulations have really ramped up the quality of STANDARD safety features. I remember when Daimler did not offer cars by the year but by the model name and number. I'm sure we're going back to this future. Tesla was an experiment, but like most experiments it didn't work, or to be generous, it proved that the opposite of what it set out to prove was the better fit with the facts: ordinary people cannot and will not pay for luxury to achieve pedestrian (no pun intended) results.
    Nov 12 12:11 PM | 6 Likes Like |Link to Comment
  • Molycorp: Misconceptions And Reflexivity Present Opportunity [View article]
    Contrary Jay,

    As I see it the problem for Molycorp is a universal problem among REE miners and juniors: No such venture can be profitable if its product price point is a process leach derived "mixed concentrate." Giving Smith and Company the benefit of the doubt I think they may have seen this problem close to when they began their trek into the stock market to raise capital. Their mistake was to assume that their separation plant added enough value to make them profitable with a product price point set based on separated salts of lanthanum, cerium, and didymium.
    This pattern of moving downstream and then finding out they had not moved far enough was repeated many times after they had received the proceeds of their IPO-THEY SHOULD NOT HAVE GONE PUBLIC UNTIL THEY HAD DETERMINED HOW FAR DOWN THE SUPPLY CHAIN THEY NEEDED TO GO TO BECOME PROFITABLE! THE ORIGINAL PLAN, I WAS TOLD, WAS TO GO PUBLIC IN 2012. I ADMIT THAT IN LATE 2009 I COUNSELED ONE OF THEIR BACKERS TO GO PUBLIC RIGHT THEN, BECAUSE THE MARKET WAS READY. I WAS RIGHT AND WRONG. THE MARKET WAS READY, BUT THEY WEREN'T.
    The simultaneous error was a constant, perhaps dishonest, hyping of the total REE market as unthethered from the law of supply and demand. This came out as both demand and price would increase in lockstep.
    Mr Smith reacted to detailed criticism by, in my opinion, wildly overspending to acquire assets to mute the criticism with no thought as to how to integrate such assets into the Molycorp circus to make it into a smoothly operating system systematically reducing costs.
    The problem now being faced by Messers Bedford and Karyannoupoulis is how to restructure this mess while using Neo's business to carry the load. I don't think they can succeed, but I wish them the best. Mr Karyannoupoulis told some people I know earlier this year that he wishes that I would not try to be an expert at everything when I assess Molycorp. Nonetheless I will continue to analyze Molycorp's business model as I understand it from public records and my activity in the global rare earths community. I really do wish him the best, and I hope he rescues his former Neo business from the morass.
    Now you know what i think.

    Jack
    Nov 12 10:52 AM | Likes Like |Link to Comment
  • The Current U.S. Economic Scenario: Where We're Headed [View article]
    In this morning's Wall Street Journal an author points to the tendency of government political appointees to fail ever upward in their career paths. I use to think that most government failures were due to ignorance by "leaders" and lack of specific expertise in their subordinates. I have come to believe now that this ignorance is mostly do to an overall lack of intelligence by a power-greed driven group that has taken over the national government. Hollywood on the Potomac is all smoke and mirrors and its moral decay is palpable.
    Nov 12 09:29 AM | 10 Likes Like |Link to Comment
  • Advantages of Proprietary Processing Technology Validated in Pilot Plant Tests [View article]
    This announcement is a very positive indication that Rare Element Resources is actually making progress on its excellent business model. The company is thus separating itself from the majority of juniors who have either lost their way, or are far too early in the process to be worthy of much, if any, further consideration.

    I wish to re-state my position that RER is a survivor of the rare earth bubble, and is a key future component of a SECURE domestic North American total rare earth supply chain. Attention end-users: Paint a circle around this bright spot on your procurement radar screens.
    Nov 11 10:06 AM | Likes Like |Link to Comment
  • Molycorp: Misconceptions And Reflexivity Present Opportunity [View article]
    Dear Contrary Jay,

    Thank your gentle criticism of me and your thoughtful review of the history of investing in Molycorp. You are right, mostly, on both accounts.

    I last visited Mountain Pass in the summer, I believe, of 2009. At that time Brock O'Kelly, who I had met in Hong Kong at a Metal-Pages event at which I spoke, gave me the grand tour of the (original) SX plant, which he said had then been brought back to operation up to the production of mixtures of praseodymium-neodymium (didymium). He told me then that their next goal was the separation of samarium and europium which was hoped to be accomplished by summer, 2010.
    The plant was mild steel, the equipment was leaking-there were spots of kerosene on the floor, but it looked good to my managerial eyes (I retired in 1999 as the CEO of an automotive production chemical manufacturer).
    Mark Smith gave me a presentation of where the company was and what it hoped to achieve. I was the oldest man in the room, and I could have been the grandfather of the lab manager. This to me was very positive, and I said so to Brock who responded that he was then the only employee left from the previous regime.
    I was impressed by the mine's size and ease of access.
    But I remember that I said to Mark Smith, after he told me of their future plans, that I thought that they should bring the original plant into operation and hope that REE prices in the meantime firmed. This would enable them, I thought, to produce enough revenue to make a nice profit. Mark told me that Molycorp was going to be a billion dollar global corporation not just a nice little profit-maker. The gap between the thinking of a small businessman and a Wall Street driven big company (Chevron in Mark's case) guy could never have been clearer. I still think the way I thought then, and Mark still thinks the way he thought then.
    Mark was and is a big company guy; they don't solve problems they delegate their solutions to those lower on the food chain. They populate the food chain with those who think they belong there-usually former acquaintances from Big company days. This is the way, typically that Wall Street and Harvard Business School think that the development of a company should be done.
    I had then just met Gary Billingsley who first made me aware of the mine to market strategy. He, Gary, had probably not yet met Mark nor had Mark then ever heard of or thought of mine to market. That happened later.
    I have no ax to grind with Molycorp. I think it took the wrong direction. Those who made money on Molycorp share trading look upon me as a sour graper. The truth is that i don't care about Molycorp. It's time as "the" potential savior of the REE supply market is long past. The Molycorp bubble is over, but the problem of a secure supply of the critical rare earths looms larger every day.
    I know I didn't answer your questions, but I wanted to say the above first. I will answer your questions in another forum. I do not wish to submit articles to SA, because I have found its editors and I do not agree on the importance of key topics and themes.
    Thanks for reading,
    Jack
    Nov 11 09:37 AM | 2 Likes Like |Link to Comment
  • Molycorp: Misconceptions And Reflexivity Present Opportunity [View article]
    Ladies and gentlemen,

    My SOLE interest is in assessing the probability of the commercial success of a natural resource production venture. That assessment is a factor in the determination of LONG TERM investors' interests. The greed circus of the hype market is not a factor in my calculations. I cannot predict stock prices, but I understand that my conclusions as to a venture's probability of commercial (profit making) success may be taken into account by those who make early and short term investments.
    The volume of trades in a company's shares and the mechanics and outcomes of short term market manipulation mechanisms can help a developing company only if it allows it to sell its equity. Once the company is in production it can self finance through debt and by issuing bonds (if it is profitable and has good management).
    The volume of discourse(MOSTLY BULLS**T) here about puts, calls, shorts, insider trading, etc is about the making of money by those buying and selling STOCK not by those who make and sell PRODUCTS.
    Nov 10 11:05 AM | 4 Likes Like |Link to Comment
  • Molycorp: Misconceptions And Reflexivity Present Opportunity [View article]
    Ausheds,

    I had a similar conversation with CK in 2009 at a Research Capital event at which we both spoke in Toronto. I asked him why Neo did not get into mining. He said that there were two reasons: 1. The Chinese would look unfavorably on Neo seeking alternate sources and could put pressure on his then current sources, and 2. The were no resources of feed stock in the USA or Canada, so why would he risk his company's existence.
    Like you I believe that he would like to return to his pre-Molycorp existence, but he cannot do it without a storm of shareholder lawsuits describing the Neo purchase by Molycorp as a "looting" or at best a parasitical attempt to fund Neo by draining Molycorp. Obviously the MCP board would also have to approve the "deconstruction." of course if CK were the chairman and his former CFO the CEO of MCP it might be easier just to move MCP incrementally back to an extended version of Neo. But of course that's just speculation.
    If MCP goes bankrupt I want to try to buy the subsidiary of Neo that was formerly "Recapture Metals." I admired CK's vision when he bought that company, as Neo, from its brilliant founder. Look at the facts: Neo was and is the only REE company that has made profits all along. The 2011 bubble maximized its shareholder value and the sale of the company to MCP at that value made CK a true champion of his shareholders and a rich(er) man. CK is a very smart businessman. MCP is not at all a good story. CK must have a plan, but it can't possibly be to bring into production a producer of materials already in oversupply from lower-cost producers. What is his plan?
    Jack
    Nov 10 10:48 AM | 3 Likes Like |Link to Comment
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