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Jack Lifton

 
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  • Molycorp: The Pain... The Pain [View article]
    Perspective is the key to objectivity. The market for large quantities of customer specified light rare earth industrial raw materials, as products, delivered on time, meeting the specification, and at the agreed price is at least 80%, perhaps more, in the PRC. To be competitive in that market you MUST meet the above criteria and have been APPROVED as a supplier and be supplying for a while JUST AS IN ANY OTHER MARKET FOR ANY PRODUCT OR SERVICE ANYWHERE IN THE WORLD!
    So, the question always has been and always will be: Can an American rare earth miner be competitive in the PRC's domestic market against the domestic competition and SECONDARILY can an American rare earth miner be competitive against the PRC's RE miners/refiners in the small non-Chinese markets.
    History so far has shown that domestic American RE producers cannot be competitive in the Chinese domestic market. I think that a small streamlined American domestic RE producer of either LREEs or HREEs, preferably of both, can be competitive in the non-Chinese markets, because Chinese costs and reliability are on the one hand increasing and on the other, decreasing. But a Domestic American producer will have to be capable of sustaining a breakeven point that reflects ONLY the non-Chinese demand for TREEs.
    I think Molycorp is too large a venture to succeed in the relatively small market in which it is trying to function. I have always thought that, and I remember saying that to Mark Smith in 2009.
    May 30, 2014. 09:43 AM | 3 Likes Like |Link to Comment
  • Molycorp cash could get tight in H2, Morgan Stanley says in downgrade [View news story]
    I am intrigued by the "in the know" attitude of MS's analysts with such statements as "...because commissioning and ramping up of tanks could take one to two months; also, there is risk that new bottlenecks might emerge in the process after leach tank capacity is raised." It's clear that these analysts have never built anything not put any chemical engineering facilities into operation, since those of us who have done so know well that nothing ever goes according to plan and the risk is always that the system won't work until tweaked, if at all.
    It was obvious from the beginning that MS viewed Molycorp's plan, as they perceived it, as an outcome to be expected once enough money had been thrown at it. Now that reality has set in things don't seem so rosy. "Reality" by the way is the fact that the lowest cost producer will have as much market share as it can produce. Does MS believe that just by stating that its production costs will be lower than that of its Chinese competitors Molycorp can actually do that? Apparently so.
    May 21, 2014. 12:12 PM | 3 Likes Like |Link to Comment
  • Molycorp: Catching A Falling Knife? [View article]
    I am not saying that rare earths are not used in modern weaponry; I am saying that nothing produced at Mountain Pass is in a form useful, as produced, in modern weaponry. It is Molycorp China that produces some rare earth forms that can be used to make rare earth enabled components that are used in weaponry. The sole maker of samarium cobalt magnets in the USA for military consumption requires samarium in metallic form in its process. This I believe is bought from Chinese suppliers. Rare earth enabled components are made from rare earth metals and alloys and for military use are either samarium cobalt or dysprosium/terbium modified neodymium iron boron sintered forms. The irony of Molycorp China's magnets is that those that need dysprosium and/or terbium must buy those materials for such a use from Chinese suppliers. One of the fundamental errors of Molycorp's business model was its failure to acquire a source of heavy rare earths. This was not for lack of trying. I knew of at least four companies with which Mark Smith negotiated for the purpose of acquiring them. I was told in each case that the board turned the deal down. There is now no point in Molycorp adding the capability to separate heavy rare earths at Mountain Pass. This is the real bottleneck in its mine to magnet model, and it's probably too late to fix it. The US DoD wants a domestic rare earth total supply chain as its source.
    May 12, 2014. 11:17 PM | 2 Likes Like |Link to Comment
  • Molycorp: Catching A Falling Knife? [View article]
    I understand that. I was commenting on Spaceshuttle's comment.
    May 12, 2014. 06:43 PM | Likes Like |Link to Comment
  • Molycorp: Catching A Falling Knife? [View article]
    I am not aware of anything produced at Mountain Pass that could be used in any way by 'the US Government for defense technologies.." In fact the only Molycorp product that the US defense manufacturing industry might buy could be bonded magnets made in China by the former Neo. However it's my understanding that no such devices are bought directly by any USG agency. It is possible that some defense contractors buy components with "former NEO" bonded magnets made in China, but this would not seem like a good reason to invest in Molycorp. Most military rare earth permanent magnets are sintered types.
    I am laboring this point, because this type of broad and incorrect statement is all too common. If the writer's company buys "products" from Molycorp Mountain Pass then it is a buyer of didymium, lanthanum-cerium, or cerium oxides. If the product being bought is didymium oxide then it must be being sent to Japan or China to be transformed either into didymium metal for sintered magnets or further separated into neodymium to be made into metal for bonded magnets. If it's lanthanum-cerium then its for fluid cracking catalysts, and such la-ce mixes are ruthlessly competitive and cheap. If its cerium oxide for glass polishing it also isn't very profitable if at all against Chinese material.
    The coliseum in Rome is "pretty awesome" even though it hasn't been used for centuries.
    May 12, 2014. 06:01 PM | 4 Likes Like |Link to Comment
  • Is Molycorp A Good Pick? [View article]
    Please note well that IMCOA supply statistics are projections based on the predictions of the two non Chinese large producers, MCP and LYNAS, of what their 2016 production "will be." Added to that is the predicted production of the critical rare earths by other juniors who, unlike the producers, MCP and Lynas, have HREE themed deposits.
    The real unknown is GEOGRAPHICAL demand. We cannot predict when Chinese domestic demand for HREEs might equal 100% of Chinese produced supply. If there is no non-Chinese HREE production at that point then the global production of HREE enabled components, such as phosphors and magnets, will of necessity be in China TOTALLY, and such components will be available to the rest of the world only in and as Chinese exports. If this situation were to occur then each passing year after China reached 100% of component production would increase the PROBABILITY that such production would remain under Chinese control for a longer period.
    By the way everyone here is missing Professor Kingsnorth's (and my) view that there is no point to non Chinese HREE production, other than to increase Chinese supply to satisfy Chinese demand, unless the west revives its total rare earth supply chain!! Only ONE processing plant outside of China, Solvay Rare Earth Systems' La Rochellle facility, can separate and refine the whole suite of rare earths, and it only has a limited tolling capacity.
    The market is being very efficient in its pricing of MCP and Lynas; that is the problem for them.
    Apr 18, 2014. 09:26 AM | Likes Like |Link to Comment
  • What Now For Molycorp? [View article]
    Bad news guys:

    TESLA DOES NOT USE A RARE EARTH PERMANENT MAGNET TRACTION MOTOR IN ITS POWER TRAIN, NOR DOES IT USE A NICKEL-METAL HYDRIDE BATTERY.

    ABSOLUTELY NO SYNERGY WITH MCP
    Mar 5, 2014. 08:11 PM | 1 Like Like |Link to Comment
  • What Now For Molycorp? [View article]
    I have just attended a successful (as many as 400 attendees!!) rare earth permanent magnet (REPM) conference in Ningbo, China, in which city in China, alone, tens of thousands of tons of REPMs are produced each year. For comparison note that the non-Chinese-Japanese production of REPMs in the world is IN TOTAL a very few thousand tons at best, and, at that, almost ZERO REPM alloy is produced outside of China (80%) and Japan (20%).

    REE Capacity and price were a big topic at the conference.

    Repeated at the conference was the theme I heard last summer in Ganzhou, China, a fiercely competitive city of Ningbo for REPM production, China has huge overcapacity for SEPARATION/REFINING of the REEs, all of them.

    Yes, the Chinese REE MINING and PROCESSING INDUSTRIES (NOTE THE PLURAL) are being consolidated under national government fiat to streamline and become profitable and control costs and speculation and address environmental issues in mining.

    Thirty-Eight SX separation plants for REEs are in the Ganzhou region with a total refining capcity of 60,000 tons per year. Ganzhou is the center of heavy rare earth mining/refining. The GLOBAL market for HREEs is 15,000 tons per year.

    Inner Mongolia is the global center of LIGHT RARE EARTH mining AND refining, NOT MOUNTAIN PASS and NOT Mt. WELD AND KUANTAN, Malaysia! The manager of the LARGEST LREE miner/refiner IN THE WORLD in Inner Mongolia spoke in Ganzhou when I was there. He said TO HIS CHINESE COLLEAGUES (200 of them) that his company was totally integrated and had the lowest production costs in the world for REE production, so that if any of the EXCESS CAPACITY of Ganzhou were to be set to compete with Baotou then it would be come bankrupt.

    BUT, most of Ganzhou's 38 SX separation plants are facing imminent bankruptcy anyway, so they are offering "deals" to refine at any price.

    By the way the manging director from Baotou told us that he expects there to be 30,000 tons of "surplus" cerium produced IN CHINA in 2014!

    I note that the former NEO Materials is a minor player in all of this in China.

    When you sit in your leather chairs contemplating Molycorp's stock price and future rest assured that NO ONE in China is thinking about MCP as a competitor.

    PERSPECTIVE IS THE KEY TO OBJECTIVITY!

    Please widen yours.

    There is no rare earth market; there is a rare earthS' market. Rare earths are not sold nor can they be in "lockstep." Cerium is selling today in China for $4/kg. For a company such as Molycorp to compete in the world's largest REEs markets it will have to be able even to market its cerium output at a profit at a selling price of $4/kg for the foreseeable future.

    I am writing today on Investor Intel Report on "The Hitachi Charade in North Carolina." This will introduce you to the real world of REPM manufacturing and marketing.
    Mar 5, 2014. 08:08 PM | 3 Likes Like |Link to Comment
  • Fuel Cell Vehicles And Critical Metals: Supply And Demand [View article]
    Thank you for giving me an insight.
    Hydrogen, THE most abundant of the chemical elements in the universe is actually rather scarce in the global human technology economy, because it is pointless to produce it for mass consumption due to the energy costs of obtaining it from the decomposition of hydrocarbons, ammonia, or water, and due to the cost of erecting a distribution system. We don't need fuel cells to burn hydrogen to release electricity to power electric motor driven vehicles we could just use hydrogen directly in internal combustion engines that would also have only water as an exhaust. I recall that fairly recently BMW reconfigured a V10 engine to burn hydrogen and put a few of them on the road in New York State centered geographically on a company owned hydrogen fueling station.
    Mar 5, 2014. 04:09 PM | 2 Likes Like |Link to Comment
  • Fuel Cell Vehicles And Critical Metals: Supply And Demand [View article]
    Lets just concentrate on the platinum group metals scarcity issue. Global platinum production is almost the same as global palladium production. Both are in the 200-300 metric tons per year range. Both metals are produced overwhelmingly in politically unreliable countries and, in any case, are becoming more expensive to mine and refine daily.

    Palladium can be used and has been used in fuel cells, and it is currently 1/2 the price of platinum.

    I repeat that SO LONG AS FUEL CELLS MUST USE EITHER PLATINUM GROUP METALS OR SCANDIUM THEY CANNOT BE PRACTICAL DUE TO THE SCARCITY OF THESE MATERIALS IN THE GLOBAL METAL ECONOMY!
    Mar 5, 2014. 12:12 PM | 5 Likes Like |Link to Comment
  • Is The Pentagon Handing China The Keys To U.S. Defense? [View article]
    Dr Leeb,

    Your conclusions are correct, but many of your facts are not. This really doesn't matter except where you say that China has the most accessible and abundant deposits of the "heavy rare earths." Note well that China has no hard rock deposits with recoverable heavy rare earths. It's advantage in this sector of the rare earths' markets is that its "deposits" are easily recovered by heap leaching with simple chemicals such as soluble ammonium salts. Its "deposits' however are in the 500 parts per million range, at best, so that the sheer volume of surface material that must be treated is enormous. This leads to wasteful practices best described as laying waste the land with little regard for health or the environment.
    The USA, in fact, has 3 significant hard-rock deposits of heavy rare earths:
    1. The Bear Lodge, Wyoming, centered and huge rare earth district in Wyoming being developed by Rare Element Resources, REE,
    2. The Bokan Mountain Complex in Alaska being developed by Ucore Rare Metals, UURAF, and
    3. A unique and huge net deposit of the unique mineral, yttrofluorite, near El Paso, Texas, being developed by Texas Rare Earth Resources, TRER.

    I am writing this comment at the Shanghai airport from which I am departing today for Malaysia. I just attended the first International Rare Earth Permanent Magnet Conference to be held in Ningbo, and I spoke about rare earth recycling in the USA compared with China.

    Your comment has led me to reflect and come to the conclusion that in fact it is the USA that has the largest volume of hard rock deposits of economically recoverable heavy rare earths in the world at the present time. I suspect also that the excellent hard rock deposits of Tasman Metals at Nora Kaar in Sweden are a larger resource than the Chinese adsorption clays.

    Hastings Rare Earths and Northern Minerals both in Australia are hard rock deposits of perhaps the most desirable heavy rare earth themed mineral, xenotime.

    last but not least I predict that Brazil will be producing xenotime in this decade from the cassiterite residues of tin mining.

    Canada also has some very large hard rock deposits of heavy rare earths, but for the time being their development is held up by the sheer costs of infrastructure in the case of the Quebec deposits and by that problem and the issue of radioactive content in the Canadian Northwest Territories.

    Did I mention the ionic adsorption clays in Vietnam, Thailand, Indonesia, and Malaysia, which could be processed just as the Chinese adsorption clays are?

    The USA does not have the will to create a total rare earth supply chain; it has the resources to do so. Logic tells me that Rare Element Resources, Texas Rare Earths, and Ucore will be North America's source of a secure supply of ALL of the critical rare earths by the end of this decade.

    I now think that the USA and Europe will both recreate their prior total rare earth supply chains by the end of this decade and that by 2025 the USA and Europe will be self sufficient in rare earth elements.

    Jack Lifton
    Mar 5, 2014. 02:14 AM | 5 Likes Like |Link to Comment
  • 3 Billion Reasons Why Tesla's Gigafactory Will Be A Bloodbath [View article]
    John,

    I'm in Ningbo, China, right now at the International Rare Earth Permanent Magnet Conference. Yesterday in the China Daily, the English language version of the semi-official Peking People's Daily, a statistic was published that last year 9,000 EVs and 13,000 PHEVs were sold in China. At the same time an American was telling the conference that there were already 2,000,000 EV and HEVs in China and that there would be 20,000,000 by 2020.

    The EV and HEV stock promoters are once again out of the asylum. Cheap fuel cells built from scarce and expensive raw materials drawing hydrogen fuel from non-existent distribution points will soon join endless numbers of obsolescent
    lithium batteries built from fantasy mountains of lithium and fueled from non-existent charging stations powered by bankrupt coal-fired or frackless natural gas fired generating stations.

    That whistling sound you hear is the money being separated from the fools.

    April 1 is literally just around the corner. It must be Elon Musk's favorite day for raising money.

    Next time you see him ask him why not a TESLA FCV?
    Mar 3, 2014. 09:14 AM | 12 Likes Like |Link to Comment
  • Stationary Energy Storage: Pipe Dream Or Lead-Pipe Cinch? [View article]
    John,

    The sad reality that all of your articles emphasizes is the ill-preparation, educationally and experientially, of many of your detractors. I note that today "graph reading" is actually a full course or a significant course segment in many engineering schools. I well recall that when science and engineering were noble and mostly selfless professions not at all entertained by those who just wanted to get rich there was no hope of a career for those who couldn't create and illustrate data with graphs much less for those who didn't understand statistics thoroughly.
    Your deductions are incontestable, and I find no flaws in your data or assumptions.
    As an aside I couldn't agree with you more that the application of Moore's law, which was specifically drawn to illustrate the growth of computational "power," has been misapplied to a multitude of areas such as battery energy density growth to which I doubt that Dr Moore, who I met in the late 1960s when he was in Detroit, selling (successfully as I recall) Stan Ovshinsky on the idea of letting Intel design and make the chips for the amorphous semiconductor memory, gave any conscious thought. It was just some 40 years later, by the way, that these "memory chips" became the basis of the SSD memories. I phoned Stan Ovshinsky to tell him that on the day I read the news in the journal of the IEEE, and he said "It took a while for the manufacturers to catch up to the dreamers." I wonder what Moore would have thought of that?
    Jan 9, 2014. 01:28 PM | 6 Likes Like |Link to Comment
  • 1883 Interview With Thomas Edison On Energy Storage [View instapost]
    The battery and electric motor were strong contenders for passenger and freight vehicle power trains until the internal combustion engine became more practical in around 1912. It wasn't until after World War 2 that the American electric power "grid" was extensive enough to consider EVs again. However except in the cases where you needed enormous and instantaneous torque, such as in aircraft docking tow motors economics has defeated battery power. The automotive companies spent millions studying EV engineering between 1960 and 1990. The conclusion was that the limitations of EVs defeated their acceptance against internal combustion powered vehicles.
    The ONLY thing that has kept alive the EV idea is that IF there is "harmful" global warming caused by man made emissions of carbon dioxide then there is an urgent need to eliminate wherever possible the sources of carbon dioxide. Now that the global warming issue is fading and coming into ill repute as junk science the biggest driver (excuse the pun) for EVs is fading rapidly. If you cannot capitalize the environmental aspect the enterprise is still, today, an economic failure. The outcome of unprofitable schemes today, just as in Edison's day, and in Leonardo's day, and in Archimedes' day, is failure.
    Jan 1, 2014. 09:34 PM | 2 Likes Like |Link to Comment
  • Why Rare Earth Prices Are Poised To Rebound And Who Stands To Benefit [View article]
    Bz1516,

    I think you are correct in identifying the key issues.

    Essentially all of the world's rare earth permanent magnets are made in China and Japan. The Chinese rare earth industry believes it will NEVER have to import neodymium, praseodymium, or samarium. The Japanese, on the other hand, know they will ALWAYS have to import all of the rare earth elements they use. Lynas' ore is much richer in neodymium/praseodymium than Molycorp ore. This means that Lynas can produce LESS TREEs and get MORE Nd and Pr per unit of finished material. Lynas' production target could meet more than 50% of Japan's domestic demand for Nd and Pr. Molycorp could provide the rest, but there are two problems facing both Molycorp and Lynas.
    1. Molycorp has significant refining and manufacturing operations in the PRC. These operations are constrained to operate under Chinese environmental, legal, and import/export rules, and
    2. Japan is well advanced in developing its own rare earth supply chains in Southeast Asia, India, Africa, and Canada. Any Japanese successes will have a negative impact on both Molycorp and Lynas.
    Articles about the REEs markets that ignore the global picture, as almost all SA articles do should not be anyone's sole reason for investing in the REE space.

    Jack
    Dec 9, 2013. 09:47 AM | 9 Likes Like |Link to Comment
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