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Jack Lifton

 
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  • The Cruel Realities of EV Range [View article]
    John,

    As usual a fantastic, thorough, and iconoclastic article.

    I'm in Hong Kong, where I just arrived from Japan, to speak at the CLSA Asia Forum 2010 on the "Global demand for all metals." While I was in Tokyo I, naturally, went to the opening of the newly rebuilt Mitsukoshi department store on the Ginza. Right across the street from the store is a Nissan showroom and featured in that showroom is the Leaf on a revolving pedestal with the requisite pretty girl accessory option.

    An electrified car is a common sight in Tokyo. Of course parking is typically more than $1000/month, gasoline is astronomically expensive, and the mass transit is the world's most extensive.

    This along with your perceptive commentary has given me pause to think that perhaps car markets for electrified vehicles are not commodity markets. Tokyo, for example, with its more than 20% of the population of Japan, extensive mass transit, universally available 220 multi-phase outlets, insane property values where a private garage in the city would be a Donald Trump extravagance, and a mild winter seems somewhat different a market for a short range, climate and grade dependent electrified vehicle, than, say, Minneapolis.

    I have asked CLSA to add a panel to its next Asia Forum featuring you as a world leading authority on energy storage economics, Prof Gerd Ceder of MIT, a world authority on lithium-ion battery chemistries, Dr. Gareth Hatch, a world authority on rare earth permanent magnets and automotive applications, and myself to discuss the risks facing the electrified car from the investors' point of view.

    In Shanghai last week, by the way, I was told that BYD will bring to market shortly a "hybrid" which can travel more than 150 miles on a charge and can operate as an EV, a hybrid, or a gasoline/diesel powered car. I have been invited to and I plan to visit the BYD plant in November when I am addressing China Mining 2010 in Tianjin. If I can get you an invitation will you come with me?

    Keep up the good work. The makers of antacids sold in Detroit, Paris, Stuttgart, Seoul, and Tokyo salute you.

    Jack
    Sep 15, 2010. 12:26 AM | 8 Likes Like |Link to Comment
  • Plug-in Vehicles: Toyota Tells the Unvarnished Truth [View article]
    John,

    I note the lack of ad hominem attacks to this excellent analysis, and I wonder if the topic matter and the quality of your work have not acted as a filter leaving only thoughtful persons to respond. I certainly hope so, because once again, as always, you have gone to the core of the issue: Are lithium-ion ion batteries ready for prime-time? The answer, in 2010, is, on an economical and practical level, no. There can be no debate about that.

    The question with which the above question is confused, "Will lithium-ion batteries ever be cheap enough, safe enough, durable enough, and reliable enough to meet the target specifications set by, for example, the real world experience of Toyota with its Prius type power train?, remains open.

    Toyota is truly a 21st century corporation, and it is confident enough to tell us that it is working on the open question/problem and will let us all know the result. It is difficult to imagine how any of the stock-market promoting hypemeisters of America could or ever would tell the truth about their chances of success. The first thing a stockbroker learns after toilet training is to play down the warnings of failure in the voluminous text of an SEC filing that some of the suckers actually read.
    Jul 11, 2010. 10:02 AM | 8 Likes Like |Link to Comment
  • The Truth About Fossil Fuels and Renewable Energy (Part II) [View article]
    Although I don't usually comment on individual companies I want to say that Cameco is run either by very savvy mining engineers or by bean-counters who listen to their very savvy engineers. Cameco is already half-way to a future in which it will be a diversified supplier of critical material for alternate energy. In this it is way ahead of the pack. Watch this comapny carefully.
    Aug 9, 2009. 09:45 AM | 8 Likes Like |Link to Comment
  • Why Advanced Lead-Acid Batteries Will Dominate HEV Markets [View article]
    Don,

    I worked first on the molten alkali salt battery for OEM automotive propulsion in the mid-1960s. The contract was sponsored by Lithium Corporation of America and was to study lithium salt systems as storage devices, so its not 30 years its 50 years.

    The statement about the technology's immaturity was made by Honda's chairman last Spring in detailing why Honda is not going with li-ion technology "as of yet." he meant, of course, for automotive use.

    Advanced means something that "works" better than exisitng technologies made for the same purpose. Laboratory prototypes do not count as successes in the world of mass produced components. They are trials and errors until they are fit enough and economical enough to go into mass production for consumer products.
    Jun 1, 2009. 12:53 AM | 8 Likes Like |Link to Comment
  • First Solar: Why I'd Never Go Long [View article]
    First Solar is an excellent example of the difference between science and technology. FS's science is excellent; it makes a high efficiency thin film PV solar cell that is superior to its equivalent silicon cell. Unfortunately, FS's technology is best left in the laboratory due to basic limitations in the availability of tellurium, a key and critical ingredient-one for which their is no effective substitute.This basic flaw in its business model is not none that is even recognized by the investing community. It has now, however, reared its head to bite FS you know where.

    I always raise the issues of availability and security of supply whenever I am asked to evaluate the supply chain for a technology. You should look at them also.
    May 28, 2009. 09:09 AM | 8 Likes Like |Link to Comment
  • Tesla's Q1 Earnings, An Epic April Fools Prank [View article]
    John,


    I'm so old that I actually heard Bertrand Russell say that philosophers and other soothsayers only get famous 50 years after their deaths. Combine that with "a fool and his money are soon parted" and "too soon, old, too late smart" and you have all you need to know to understand why Tesla, Fisker, and Next will not even be footnotes in the very near future. They are all a type of vehicle (in both senses) to funnel taxpayer money to connected elites of the ruling party of the moment. They are not game changers, they are game players.
    Apr 26, 2013. 12:39 PM | 7 Likes Like |Link to Comment
  • Molycorp: CEO Confidence In Light Of SEC Action? [View article]
    Kevin,
    It seems to me that if Mr Smith had sold shares at $6.20 for any reason other than to pay for a life saving surgical intervention for a close relative the market for MCP would have simply gone down the drain. He had therefore just the two choices, do nothing or buy some shares. In fact since he netted more than $10 million on the insider sell out in which Ross Bhappu (On behalf of Resource Capital(?)) netted several hundred million dollars wouldn't a purchase of a million shares by Mr Smith have been a more appropriate and commendable vote of confidence? Mr Bhappu, as I recall bought 2,500,000 shares at $10, recently, so he, Bhappu has already lost $7,500,000.00 since then. If MCP goes to $27 as Byron Capital is projecting then Mr Bhappu stands to make another $40,000,000.00 while Mr Smith would net some $400,000.00. If you are looking for an internal vote of confidence Mr Bhappu has Mr Smith beat by 100 to 1.

    Lynas said, I believe, that after a six week first batch time that their system would be brought up to 400 tons a week of product in the second quarter of its going into full operation. I think that is ambitious. As I understand it Molycorp is not going to run its original SX plant after it starts the new plant. The question is; How long will it take to bring the new plant up to 400 tons a week of product output. I would think that as of today Lynas has a slightly shorter lead time. If both projects succeed then by the end of 2013 they will be together producing an annualized 40,000 ADDITIONAL TO THE EXISTING MARKET tons of light rare earth products. Isn't just this fact alone a market damper for lanthanum, cerium, and even, perhaps for neodymium-praseodymium prices?

    Do we know the break-even points for Molycorp or Lynas? How little do they need to produce to keep operating in the black? Stay tuned as reality and I think lower-cost competition sorts out the true market size.
    Nov 21, 2012. 06:17 PM | 7 Likes Like |Link to Comment
  • Electric Vehicles, Front-Loading The CO2 Emissions [View article]
    Right on John.

    The US company, Formation Metals, Inc., has been trying to start up a cobalt mine in mining friendly Salmon, Utah, for the last 12 years. It would be America's only primary cobalt mine. The environmentalists, NOT THE LOCAL MINING FRIENDLY PEOPLE have blocked it. It seems hypocritical, but in fact it's just STUPID. The Eco-freaks simply do not know what they're doing.

    Conflict metals, toxic heavy metals, and so forth are a big deal in Al Gore's world, but creating jobs and growing the safest mining industry on earth-not so much.

    Jack
    Oct 10, 2012. 11:08 AM | 7 Likes Like |Link to Comment
  • Ford (F) says it’s cutting consumption of rare earths used in its hybrid and electric cars by 500K lbs./year and will save hundreds of dollars per car in the process. But shares of rare-earth leader Molycorp (MCP +5.6%) shoot higher anyway, adding to gains a day after China announced a 40% cut in the number of permits to mine rare earths. REE +5.7%, AVL +4.5%[View news story]
    The Ford press release is full of spin. But the brief SA summary here is also rotating at high speed.

    First of all the nickel-metal hydride battery that Ford has been successfully using for nearly 10 years WITHOUT A PROBLEM in its well made, well engineered HYBRIDS uses on the average 2.3 kg of LANTHANUM per battery and very little of any other rare earth metal. Therefore the press release is telling you that IF FORD WERE TO MAKE AND SELL 100,000 HYBRID EVs per year without using the proven reliable NiMH battery it would then not use 243,000 kg or, approximately 500,000 lbs of LANTHANUM. LANTHANUM price today is less than $20/kg and DROPPING. But let's use the $20 figure. This means that each NiMH battery contains $46 of lanthanum. Watch out at this point for the spinning propeller! The same battery uses FIVE TIMES AS MUCH NICKEL, AND NICKEL SELLS FOR THE SAME PRICE AS LANTHANUM TODAY! So, in fact, it's not the 500,000 lbs of lanthanum that has Ford's bean counters worried it's the 2,500,000 lbs of NICKEL that accounts for more than 80% of the cost of the metals in a proven, reliable, long lasting in many cycles NiHM battery.
    Please also note that Lithium-ion batteries are very very expensive to build and that this has NOTHING to do with the price of lithium.I hope the Ford bean counters know that the most efficient Li-ion chemistry is Li-COBALT, and that COBALT is MUCH MORE EXPENSIVE THAN NICKEL.

    I have always believed that in an era of CAFE rules and arbitrary government mandates WEIGHT is the controlling factor. But I wonder if these Li-ion batteries being discussed here are actually lighter in weight, since they require more manufacturing engineering and it results in multiple safety systems being required for fire suppression and cell breakdown management.

    Magnets: My partner in TMR informed me this morning that the magnets that Ford is to be utilizing to thrift the use of dysprosium are only made in Japan, so that Ford will remain dependent on Japanese access to Chinese dysprosium in any case.

    This brings me to Molycorp, which is, of course, hurt by Ford;s reduction of its use of lanthanum, because lanthanum is a principal product of Molycorp. It accounts for some 25-28% of the output of Mountain Pass.

    In addition to that you must note that the Chinese restriction in the number of licenses is not to restrict the total amount of rare earths produced but to CONSOLIDATE its more than 129 legal mines into just a dozen or so COMPANIES! Just one of those companies Baotou Heavy will now have under its control a group of REE mining companies that not only has the capability of producing 50,000 mt of light rare earths per year but has the capacity to produce MANY TIMES that amount from combined reserves and resources much larger in net rare earths contained than either Mountain Pass or Mt Weld.

    The Chinese are consolidating their REE industry to make it SAFER, ENVIRONMENTALLY FRIENDLY, and MORE PRODUCTIVE and therefore COMPETITIVE. Share traders who do not take this into account are very foolish or do not themselves own the shares and are simply churning for commissions or short term profits at the margins.

    Ironically it is the Chinese demand for nickel and cobalt that is driving Ford's moves while the misunderstanding of resource economics drives a company's share prices up as its strongest competitors act to reduce costs and improve efficiency.
    Sep 14, 2012. 12:32 PM | 7 Likes Like |Link to Comment
  • Even After More Insider Buying, Molycorp Struggles To Generate Upward Momentum [View article]
    Ron,

    I am closely following the companies I named and have visited all of their sites and talked to all of their managers and technical people. My understanding from publicly available information is that QRM has a deposit of ore that if it can be efficiently and economically extracted and if QRM has access to a HREE capable separation plant then it will be able to produce significant quantities of the HREEs. America's most experienced and distinguished rare earth geologist, Dr Anthony Mariano, told a group meeting at which I was in attendance that the Matamec property is America's (North America's) best HREE bearing deposit.

    My concern is with the gritty, and expensive, and not always of certain outcome details of bringing HREEs to market. A great deposit is necessary but not sufficient. Toyota's interest, for example, is certainly a plus factor, but Toyota is interested ONLY in the future of Toyota not even of the survival of its Japanese rivals. If Toyota should develop Matamec I predict it will take it off the market..
    Jul 9, 2012. 10:37 AM | 7 Likes Like |Link to Comment
  • On Axion Power's Shelf Registration: An Elephant Hunter Explains Market Dynamics [View article]
    John,

    Automotive companies' production plans are driven by (excuse the pun) manufacturing engineers who have the final say after the designers and marketing staffs get their marching orders from the operational executives.

    Manufacturing engineers decide whether or not something can be mass produced at a cost below the selling price. This aspect of the real world, whether or not something can be produced economically and whether or not such production can be significant enough in quantity and demand to justify the gamble of introducing the product to the marketplace is called rational economic behavior.

    Such behavior requires the discipline and cost of accepting years of testing and investigation by the customer of the capabilities and capacities of the suppliers for the product.

    Axion International seems like a dream factory only to those who don't understand the acceptance process, based on real time testing, of the OEM automotive industry. From what you've written over the last few years I can only conclude that Axion's PbC technology has passed the test: It has solved a problem (cycle life) that has been holding back the introduction of a technology (micro-hybrid) that will significantly reduce fuel consumption. It is past the first multi-year PPAP (production part approval process) requirement by a world class OEM auto maker (or two or three of them!) and is well on its way to being a mass production supplier.

    You compare pissing away investor funds to carefully utilizing them as an overlay to understand "cash burn." I suggest another additional metric. The dream factory versus the wet dream factory. Axion is one and A123 is another.

    Keep up the good work of predicting the future.

    Jack
    Jun 5, 2011. 10:13 AM | 7 Likes Like |Link to Comment
  • Molycorp's Pain Is Grace's Mega Million Dollar Gain [View article]
    Molycorp's production is not from a "pilot" plant; it is from the re-start of a long-existing facility that was shut-down in 2002 and re-started in 2007.

    Molycorp production at that operation is limited by the need to keep it in operation from existing stocks of pre-2002 concentrate, which i was told in 2009 were 22,000 MT tons 70% concentrate as of 2007. In four years of 3000 t/pa production that stock has become less than 50% of what it was.

    I think the idea must be to keep the separation plant running at this level and then ramp it up once new production commences and the renovation of the plant to upgrade its process is complete.

    Rare earths are not gold as too many "analysts" seem to believe. When I visited Molycorp's Mountain Pass mine in June 2009 they didn't have a contract customer for lanthanum oxide, which meant it was going to inventory.

    I think the Grace contract was a perfect answer to the problem.

    The idea that all buyers and sellers should use crystal balls to predict and set prices is laughable. A producer gets the best price he can from a seller who is paying as little as he can. That's called survival in capitalism.

    If the Grace price ceiling expires in 2012 then Grace will continue to take material from MCP if and only if it is the lowest price obtainable from a reliable supplier. Grace will not consider the price differential to be a problem, because it will pass it on, because everyone in the FCC business will have the same price issues and so it will be you, the consumer, who gets the proctologist's impact on gasoline prices.

    The issue for MCP will be to try and keep the Grace business rather than lose it to a Lynas or a Chinese competitor.

    I will bet by the way that Grace buys from multiple sources now.

    One more thing. Since demand is not infinite you can expect the law of supply and demand to overtake spot-price panic. More lanthanum into a finite market equals price erosion once the demand is surpassed by supply. There are more than 200 companies outside of China vying for a piece of this action.
    Apr 24, 2011. 12:26 PM | 7 Likes Like |Link to Comment
  • Thoughts on the Low Pricing of Rare Earths in China's Domestic Market [View article]
    Stonecarver,

    Seeking Alpha's editors have rarely picked my informational articles for publication, so I have pretty much stopped submitting them to SA. I publish the majority of my public work on my own (free) web site, techmetalsresearch.com, or on glgroup.com. SA wants pieces themed towards individual stocks; I write about sectors and individual recommendations can usually be inferred from my sector analysis, and I occasionally directly name them.

    I have seen a lot of light-weight, thin, and distorted-by-ignorance "analysis" about the rare earth sector lately on SA, so I will post on my web site in the next two days an article on some of the mining ventures I think must be supported if US industry is to once again become self-sufficient in critical technology raw materials. I choose them not by the size of their deposits but by a variety of weighting factors in a metric I use such as:

    1. deposit composition
    2. deposit accessibility
    3. smallest investment necessary for market acceptable production rate
    4. regulatory atmosphere in geographic area
    5. management experience in areas described in company business model including
    a. mining engineering
    b. process engineering
    c. marketing
    d. FINANCE

    I am heartily sick of reading about "my deposit is bigger than yours" and "the demand for rare earths is infinite" and "the prices for rare earths with few or no known uses should be considered as an asset not a liability." An even worse one is "my deposit is just like the one in China so that the processing will be easy."

    I don't want to debate. My conclusions can always be challenged with facts and numbers; I stand ready to change my opinion when new evidence of an appropriate, verifiable type, is presented.

    Thanks for reading
    Mar 13, 2011. 11:41 AM | 7 Likes Like |Link to Comment
  • Battery Recycling Realities for Energy Storage Investors [View article]
    John,

    Once again you've gotten to the heart of the problem. No one can make money today recycling lithium-ion batteries if the revenue generated is strictly from the value of the recovered raw materials.

    In 2006 I attended a meeting at General Motors between their battery engineering and purchasing groups and SQM, Chile's and the world's largest producers of lithium (in the form of its salts). GM did not and does not buy lithium directly, but they asked for the meeting so they could investigate the lithium supply chain to see if there were any glitches they should worry about for their future security of supply to their battery makers.

    GM asked SQM about li-ion battery recycling. SQM said they did not do that nor would they, because the cost of producing new lithium was far lower than the cost of producing lithium from recycling. At that point I asked for a timeout, and I asked the SQM sales manager to speak privately.

    I told him that GM was looking for cradle to grave management of a material, lithium, about the hazards or non-hazards of which the GM legal staff knew nothing. I told him that GM would capitalize the value of cradle to grave security-i.e., they would pay SQM to take the batteries if SQM could guarantee that it would re-aquire the lithium values. This could be done I said by simply exchanging the battery for an amount of lithium determined by a market price and returning the batteries to a Chilean legal landfills SQM representative said that he didn't understand what I was asking. I closed the discussion by telling him that legal and moral issues can be capitalized so that their solutions can be made economical.He seemed perplexed.

    Today I most often hear that same confusion in discussions of the recycling of consumer electronic waste, which in my opinion is mostly worthless economically. The "recyclers' make their money in pickup fees and "tipping fees," which is exactly the capitalization of a social issue that I mentioned to the SQM people years ago. If the fee includes freight rates for shipping the waste to a very low labor cost country- not Egypt where the $2 a day made by an average worker is TOO HIGH a COST-then similar devices can be scavenged for re-usable components for "refurbishing and re-manufacturing (Amazon categories if you hadn't noticed). Batteries of most types are thrown away.As they corrode they poison the water and food chains of Bangladeshi, Vietnamese, and even Chinese children so that Hollywood types and Al Gore can private-jet in to host after the fact benefits for them.

    I believe that consumer waste "recycling" for metal values is mostly a scam perpetrated on our society through the ignorance of do- gooders and exploiters of misery, who are morally the same.

    Lithium-ion battery recycling, for lithium, cannot be profitable in any scenario where the price of newly mined replacement lithium is cheaper than that recovered by recycling. This will not occur in any foreseeable future.

    Capitalizing the social value of removing li-cobalt-ion batteries from the environment may well be a profitable short term business, but certainly not a large enough one to make it a primary business.

    Feb 5, 2011. 09:22 AM | 7 Likes Like |Link to Comment
  • The Chinese Yuan, Rare Earths and the Selection of Critical Mining Projects [View article]
    You are right. I call this the "capitalization of strategic value" when I ask government agencies to subsidize the rare earth supply chain even though some aspects will be non-profitable either from the beginning or in the event that the current monopoly producer decides to flood the market or go to predatory pricing as it has done once before.
    For private capital, however, it is a very hard, perhaps impossible, sell. Their only driver is profit, and the risk of political interference with the rare earth market, which is a driver for the short term share price market, is a deal-killer to strategic finance for the long term development of companies and supply chains.
    As to large end users, I raised this topic and discussed the reasons you outlined above at the then world's largest auto maker earlier in this decade before Magnequench was sold off. I was told that I was wrong because the Chinese were reliable since it would take them decades to develop any domestic uses for the rare earths. The same short-sighted individuals instructed me that Chinese cars would never compete in the world market and never ever come to the USA.
    These men and women continue to be gainfully employed and to accept the new reality in natural resources only grdgingly if at all.

    The problem here is not in our stars.
    Jan 19, 2011. 09:01 AM | 7 Likes Like |Link to Comment
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