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Jack Lifton
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Jack Lifton is an Independent consultant and commentator, focusing on the market fundamentals and future end use trends of the rare metals. He specializes in the sourcing of nonferrous strategic metals and on due diligence studies of businesses in that space. His work includes exploration,... More
My company:
Technology Metals Research
My blog:
The Jack Lifton Report
  • North American Companies Involved inThe Availability of The Heavy Rare Earth Metals And The Future of High-Tech Manufacturing 15 comments
    Aug 20, 2009 2:02 PM

    As a nineteenth century British reporter might have put it, I have lately been in receipt of several letters (emails, actually) concerning my recent discussion of the credibility of the recently published document purporting to be a Chinese "plan" to suspend the export of the "heavy" rare earths as part of a general reduction, in progress for the last five years,  in the export allocations of all of the rare earths, produced in China, said (continued) reduction to be carried out over the next five-year plan due to be promulgated in 2010 for the period 2010-2015.

    I am reliably informed that the procurement area of the US Department of Defense takes the position that even if the globe's sole supplier, the People's Republic of China,  severely reduces, or eliminates, the export of rare earths the free market will still dictate that increasing price and demand will somehow trump the decisions of the China State Council, even in China, and the "small' amount of neodymium and the even smaller amounts of dysprosium and terbium needed by the US DoD will still be available. Reasoning with the logic that the DoD procurement officers were taught in their Ivy League Business School Classes they actually conclude that "the small amount of rare earth metals needed for defense production will always be available, because (drum roll) they always have been so far". I hope all of you, dear readers, feel as secure as I do with reasoning like that driving the DoD's attitude towards strategic and critical metals procurement.

    A letter, yesterday, from a far more thoughtful (more so than any DoD procurement officer that is) colleague was really the driver for this note. This gentleman who I believe is the single best mining analyst in the business when it comes to detailing and deconstructing a balance sheet and/or the financial implications of an announcement of the discovery of just what everyone has been looking for (since yesterday) in an old core, or at a new claim, wrote to ask me what all the fuss about HREEs is about.

    He wrote "....what do you make of this supposed plan to restrict the export of HREEs from China? there is plenty of HREE outside china, if the will to fund its development evolves (i.e. thor lake, bokan, kipawa, strange lake)." [my italics]

    Note well, dear readers, that I believe that my brilliant analyst friend is much more savvy and introspective than the DoD procurement official.

    However it must be noted that all of the known deposits mentioned in the quote above are either in Canada or in Alaska.

    In regard to the secure sourcing of the technology metals please do not ever vote for any American politician who says anything detrimental about US/Canada trade. That woman or man is a far worse enemy of the US economy than the People's Republic of China. because we need, and each day we increasingly need,  Canada's rare metals and energy minerals as well as Canada's attitude towards the development of its natural resources to feed the deficit in all of those metals, minerals, and attitudes that pervades what passes for long term strategic thinking among the politicians and financiers of the USA.

    In any case I am going to hazard an educated guess as to the potential of each of my colleague's above named HREE rich deposits to be brought into production in time to stave off the total loss of critical manufacturing capacity in the US and Canada for cleantech and military applications of rare earth metal based technologies:

    In order of nearest (in time) production:

    1. Avalon Rare Metals (Thor Lake, NWT), (AVL:TSX),
    http://www.avalonraremetals.com/_resources/avalon_43-101_sm.pdf,
    2. Great Western Minerals Group (Hoidas Lake, Saskatchewan and other Eastern Canadian deposits),
    www.gwmg.ca ,
    3. UCOR Uranium [UCU.V} (Bokan Mountain. Alaska),  
    http://www.ucoreuranium.com/bokan.asp  and
    4. Quest Uranium (Strange Lake, Quebec), QUC:TSX-V),
    http://www.questuranium.com/project_strange_lake.php

    For the most current and best discussions of the financials of the above companies you should go to www.kaiserbottomfish.com; It is a subscription site but well worth it.

    As to actually producing the HREE rich ores and refining them it is important to note that no facilities exist today in North America that are extracting and/or refining HREEs to separate and purify them for high technology end uses. All such facilities today are in the PRC. Notwithstanding this fact note well that all of the mining companies on the list above are aware of this fact and are in various stages of designing and proving processes for the extraction, concentration, separation, and refining of the HREEs.

    It will be necessary to develop, prove-out, and construct at least one North American facility to produce the rare earth metals and their alloys in metallic form before anyone here in North America can make rare earth based magnets for any application. Great Western Minerals Group has a facility capable of producing rare earth metal alloys for battery (nickel metal hydride) production in Troy, Michigan, and a facility producing samarium cobalt and neodymium iron boron magnet "alloys" in the UK. Ideally these facilities could be conjoined in the USA, or Canada, and technologically enlarged to produce rare earth metals and alloys from materials supplied by not only GWMG's mines but also those of Avalon, UCORE, and Quest. The additionally needed basic "light" rare earth elements, LREEs, could and will ,hopefully be sourced from MolyCorp's Mountain Pass operations and, in the future, from the operations at Lemhi Pass, Idaho, of Thorium Energy, Inc.

    Making North America self sufficient in HREEs, and LREEs,  will take not only the will to fund the development of all of the public and private deposits named herein but also a determined effort to find and encourage the specialized chemical engineering that will be required.

    Gee, if only the US DoD would dedicate a few million dollars, of its half-trillion dollar budget!, to the funding of  a rare earth processing development group at a public or private department or institution then we could save billions of dollars of industry and defense jobs and secure our safety. We need to elect people for whom those goals are a priority and who see the long term commitments necessary to achieve our goals.

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Comments (15)
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  • Alan Young
    , contributor
    Comments (2369) | Send Message
     
    Once more, Jack, thanks for the info. And once more, you don't mention Rare Element Resources, (RRLMF or RES.V). Is that because their projects are not sufficiently developed yet, or because they are only mining the lighter REEs?
    20 Aug 2009, 03:21 PM Reply Like
  • Mayascribe
    , contributor
    Comments (9977) | Send Message
     
    I was just reading Jim Kingsbury's Investment strategies:

     

    energyinvestmentstrate...

     

    Upon reading about Great Western Minerals I thought of you, and wanted to ask you what you thought about the REE miner. Don't have to ask now. Darn amazing the timing of your Instablog!

     

    Thanks for writing this post. I'm on board with you about the furure of REE's, and will commence buying them now. Sooner or later, the rest of the world will follow your lead.

     

    Thanks again.
    21 Aug 2009, 03:31 PM Reply Like
  • Mayascribe
    , contributor
    Comments (9977) | Send Message
     
    Unfortunately, my cheapo e-trading platform won't allow me to buy some (GWMGF) or (AVL).

     

    I'll have to call my broker about obtaining shares.

     

    21 Aug 2009, 03:40 PM Reply Like
  • yellowhoard
    , contributor
    Comments (1507) | Send Message
     
    I believe that our elected officials have sold us down the river to the Chinese.

     

    The PRC will insist on all manufacturing of products dependent on rare earth metals be done in China.

     

    I guess the big question is, at what price does tellurium, for instance, have to go to make mass extraction profitable here in the US?

     

    Would supply suddenly appear at $500 per ounce?
    21 Aug 2009, 05:17 PM Reply Like
  • 437339
    , contributor
    Comments (129) | Send Message
     
    yH

     

    Actually The IMF has sold the US to the Chinese .
    21 Aug 2009, 05:30 PM Reply Like
  • doubleguns
    , contributor
    Comments (8383) | Send Message
     
    When we cant produce something quickly we add it to the strategic reserves . I can not imagine that there are not rare earth metels in the reserves but this still seems to be preposterous that nothing is being done.

     

    Military intelegence at its finest or a planned political crisis to funnel money to political croonies.

     

    Where is the leadership in this country. Have we no leaders, men of honor, men who give a $hit. Our country is run by bafoons and fools with no moral values. Caligula will run for president next.
    21 Aug 2009, 05:48 PM Reply Like
  • Hot Richard
    , contributor
    Comments (705) | Send Message
     
    437339,
    There is no shortage of people who've sold the US to the Chinese.
    21 Aug 2009, 09:37 PM Reply Like
  • John Petersen
    , contributor
    Comments (30231) | Send Message
     
    Another great article exposing the fallacy that we can rely on other countries to do the dirty work and provide the metals that only come from dirty work while we sit back, move piles of paper and make all the money. Please keep up the good work of spreading the gospel that we need to mine our resources and make products people want to buy, or we'll all be asking the Chinese "you want fries with that?"
    22 Aug 2009, 12:29 AM Reply Like
  • DRich
    , contributor
    Comments (4672) | Send Message
     
    Yellowhoard, I don't think, for the purpose of DoD needs, the commercial price point for extraction/refining is a consideration. For defense purposes discovery of and setup for a ramp is what is important. Minimal mining at known sites and an over sized refinery would be a good strategic start point.
    22 Aug 2009, 01:53 AM Reply Like
  • Chickenpookie
    , contributor
    Comments (145) | Send Message
     
    Where there's a will, there's a way. There's nothing unique about China that can't be overcome, think about what was accomplished at Oak Ridge, that's right in line with the train of thought here...

     

    War? Nyet, not unless it's against America or some crazed dictatorship for some reason that I can't clearly justify and it's not a thesis for investment when the US gov is overextending the world's reserve currency.

     

    It's the debt that counts, and no amount of war is going to change the fact, America needs a lower dollar to create the incentive to get off our duffs and actually create value-added products(wealth), so I like the thought of American manufacturing into the future.

     

    Invest in something that people are going to need in the future, whatever that might be(energy, technology, and steel perhaps), I doubt it's going to be unobtanium used for making battle robots.
    22 Aug 2009, 03:03 PM Reply Like
  • Damsgaard
    , contributor
    Comment (1) | Send Message
     
    I am wondering if anyone here has been keeping an eye on Secondary Producers i.e. not miners per se, but firms further down the food chain that harvest or recycle REMs from Electronics or other forms of industrial waste?

     

    Also, Ive been thinking, we are focusing a lot on the miners, but what about other downstream firms. Miners are only the first link in the chain. Is anyone watching purifiers?
    26 Aug 2009, 11:23 AM Reply Like
  • one eye
    , contributor
    Comments (647) | Send Message
     
    go.infomine.com/?re=13...

     

    Got this in my mail tonight and Immediately started a REE Insta., saw a Maya comment and am here.

     

    MolyCor is a penny stock, almost literally, MLYFF. Glad you are here Jack.
    1 Sep 2009, 02:00 AM Reply Like
  • Gareth Hatch
    , contributor
    Comments (142) | Send Message
     
    one eye - for the record, MolyCor Gold Corp (MLYFF.PK) is not the same company as Molycorp Minerals, LLC [web site is molycorp.com ], the owners of the Mountain Pass REE mine in California. The latter is privately owned by an investor group that includes Goldman Sachs, Traxys, a couple of private equity firms and other investors.
    2 Sep 2009, 11:32 PM Reply Like
  • one eye
    , contributor
    Comments (647) | Send Message
     
    I figured it out after a while, thanks, Molycor VS Molycorp.

     

    I couldn't find any other symbol, finally went to the website only to discover that they were private. Did some digging through the Yellow Pages to see if there were any publically listed companies located in the Area which would Supply Them, none available.

     

    I tried an endaround way of getting in on their action. Oh well.
    7 Sep 2009, 12:27 PM Reply Like
  • mykidsmom
    , contributor
    Comment (1) | Send Message
     
    Jack.. I am a great follower of yours and I have studied this situation and written about it for my husband intra office blog.. sorry.. I can not offer that information as to where he works, but I want to offer to you, that Canada is working much closer with China in Rare Earth Metals than you may imagine.. Please investigate that closer..
    Thank you

     

    On Aug 20 03:21 PM Alan Young wrote:

     

    > Once more, Jack, thanks for the info. And once more, you don't mention
    > Rare Element Resources, (RRLMF or RES.V). Is that because their projects
    > are not sufficiently developed yet, or because they are only mining
    > the lighter REEs?
    3 Oct 2009, 12:18 AM Reply Like
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