I was in France last week working on a rare earth processing issue. I met with a specific vendor, but this was a follow-up trip to a more extensive visit I made to France last November at which time I spoke before the French Strategic Metals Committee (COMES), a governmental group sponsored by BRGM, the French equivalent of the USGS. On that trip I also visited a French mining and metallurgical group’s research center, and in addition I had a very thorough tour of Solvay’s (nee Rhodia’s) Rare Earth Separation Plant in LaRochelle, France. This facility, LaRochelle, is the world’s longest running SX plant dedicated solely to rare earth separation and products. It has been operating non-stop for 43 years (As have I now that I think about it). It has a throughput capacity of 9000 tons per year and it has the capability of separating the entire suite of rare earths, from lanthanum to lutetium, from each other.
The man who oversaw the technological development of the chemical processes involved, Dr. Alain Leveque, was my guide on that visit, and I am very pleased to point out that he will be on a panel I am hosting at TMS2013 on “The State of the Art in Rare Earth Separation Processes.” No one outside of China, perhaps no one in the world is more qualified or experienced than Dr. Leveque in addressing this topic in particular when it comes to the application of solvent extraction to the problem.
Before I announce my choices of European and African junior survivors I have to make a disclaimer: I am a board member of two European companies, one of which, Tantalus Rare Earths AG, TAEN: GR, which has an ionic clay-type deposit on Madagascar, is listed on a German exchange, and the other one of which, AMR Mineral Metal Inc., is private, and its deposits and majority shareholders are located in Turkey. Because of conflict of interest and the rules of the exchanges in Germany, on the one hand, and the future plans of AMR, and the rules of the exchange upon which it will list, on the other, I cannot at this time publicly evaluate either company’s position lest I inadvertently disclose privileged information.
It’s easy to point out Europe’s survivor(s) in the junior rare earth’s space. There is really only the one public company, Tasman Metals Ltd., (TSX: TSM | NYSE AMEX: TAS), which has an impressive and large eudialyte deposit, of the total of contained rare earths in which 5% is dysprosium, in Sweden. The geologists who run as a herd on Bay Street and Howe Street will immediately snicker when they read my last sentence here. They will tell you, confidently, that eudialyte is a zirconium mineral that can’t be cracked to become a source of REEs, and even if somehow it can be efficiently cracked the REE grade at Tasman’s Nora Kaar is too low to be beneficiated enough to make it economical. Both of these statements were true in the 20th century where the geologist/promoters seem to live. I am also told that Tasman’s deposits can’t be developed, because they are in an upscale horse raising area, and, besides, the Swedish government has banned mining in the area. Neither statement is true, and the extreme opposite is much closer to the truth.
The attendees at TMS2013 will have an opportunity to ask about the current state of eudialyte treatment from the world’s leading rare earth mineralogist/geologist, Dr. Anthony (Tony) Mariano. I personally think that Tasman’s ore can be both beneficiated and extracted economically with resepct to its REE content, because I try my best to closely follow the 21st century developments in the field of extractive metallurgy.
I have one caveat for Tasman, but I have the same one for my African choice, so let me make that choice without further ado. Then I’ll discuss the caveat.
I think that South Africa’s Frontier Rare Earth Ltd, (TSX: FRO), has the best ore body for long term production and the best business model for long term production that I have seen in the region. Frontier pioneered the publicly stated use of the Critical Rare Earth’s metric as a guide to its business model (Which guiding principle, I think, was also independently developed as a metric by one of my North American survival choices, Rare Element Resources* (TSX: RES | NYSE AMEX: REE). In this business model the production of lanthanum and cerium is held to as little participation in the revenue stream as possible. Note that all of my survival choices are using this metric, directly as in the business models of Frontier and Rare Element Resources, or indirectly as in the business models of Ucore* and Tasman.
Additionally all of my choices are fitting their initial production volumes to the market rather than using the, completely independent of the law of supply and demand, “bigger is better” model adopted from gold mining by so many rare earth juniors.
Here is my caveat for both of my European and African survivors: It is a matter of survival, or critical-I can’t stop using these terms- for a rare earth junior to either produce and toll separate a radio-nuclide free, hopefully also lanthanum and cerium free, “concentrate,” or to separate, in-house, the neodymium-praseodymium, SEG, and HREE mixtures in its concentrate, first into classes, and then into the individual critical rare earths in a company owned separation plant purpose built for their needs. I think it is a waste of money to build further lanthanum cerium separation capacity at this time. The uses for lanthanum may already have peaked with A DEMAND less than the current SUPPLY. This has certainly already happened for cerium. Both lanthanum and cerium, as well as uranium and thorium, can be all or mostly removed from the process leach solution right after the ore leaching chemistry is complete. The resultant process leach solution will then be reduced in volume by up to ¾. Such a solution is MUCH CHEAPER to process and much more valuable than the original concentrate.
I have come to the conclusion that the best deposits from an economical point of view are those which, upon removal of the lanthanum and cerium from the output equation, are profitable. Such deposits are necessarily relatively high in SEG and/or HREE and/or Y to begin with. Also I only like deposits that are large but with the minimization of lanthanum and cerium have the lowest breakeven possible, so that they can produce critical rare earths profitably for a long mine life.
I note that Frontier has a plan that includes the construction of a company owned and operated separation facility on Saldana Bay, Western Cape Province, Rep. of South Africa. If this plan is put into action then Frontier will have the capability, not necessarily the initial capacity though, to become a toll processor for the small but enriched in SEG, HREE, and Y deposits in southern Africa. Such a tolling operation would make Frontier itself a formidable competitor to China as an integrated source of higher atomic numbered rare earths. In that situation it would compare with Rhodia LaRochelle, France, which is today the only operating large capacity SEG and HREE separation plant outside of China.
I am a business development consultant to Tasman, but I have no paid relationship whatsoever with Frontier. All of my survivor picks have in common that they have first class administrators and deep technological backfields.
I love to learn, and I do make mistakes usually when and because I don’t know enough about a company. I do not and will not respond to mean-spirited comments that attempt to deflect rational argument by ad hominem and other diversionary logical fallacies. I think that share price arguments are mostly about the greater fool theory. Please ask Tony Mariano or Alain Leveque or Corby Anderson questions about mineralogy, extractive metallurgy, and separation chemical engineering. They are going to be at TMS2013, and they are world class experts. I’ll be listening to their answers very carefully.
Next week I’ll give my opinions on the non-Chinese projects in Austral-Asia. There are some tough choices there, and that’s why I saved the region for last.
Disclaimer: Jack Lifton is a consultant to Rare Element Resources Ltd., Tasman Metals Ltd. and Ucore Rare Metals Inc.
Jack, It’s St. Patrick’s Day, which allows me to have the scotch I am going to need to handle what is about to happen to my inbox as a result of this illustrious series.
Allow me to the be the first to ask: What about Great Western Minerals? And, please correct me if I am wrong: but were you not one of their biggest supporters?
Also, Luisa Moreno is a major supporter of Montero, and I must confess that I am as well*. Or Namibia Rare Earths or Galileo Resources whose CEO has nailed at least one quarter of a billion dollar deal in his lifetime?
How many questions can I ask here? Oh yes, I own this site…
Allow me to make this disclaimer before everyone starts sending me emails: Jack Lifton’s opinions are his own. So if you have issue or agreement with Jack, start the pile-up here.
This said — I welcome the debate he will bring as perhaps it will give rise of opportunity for companies like Namibia Rare Earths to secure more attention.
The Technology Metals Summit will be the place for debate and so I do hope thate everyone will be able to make it out.
(Disclaimer*: I am not an investment advisor and all of the banners on the side are paid advertisers and — scroll your mouse over their badges as we have just launched a new system where you can see their sites…)
Looks to me like Jack is discussing the surviving ree MINERS. Going forward something like 75% to 80% of Great Western Minerals’ profit will come from MANUFACTURING–the downstream end of the ree industry where the real money will be made. Thus, it would be like comparing apples and oranges, which is what most people seem to do with Great Western, comparing it with the dig-the-stuff-out-of-the-dirt miners and not with the hi-tech manufacturing company GWM is.
Tracy:Thank you for asking the glaring question “What about GWG?”… Goseahawks: I prefer to hear from Jack himself.
Jack: As a large stockholder in GWG, it is confusing why you did not mention GWG in this article given your past strong endorsements of this company and Steenkampskraal mine in South Africa. Your comments in the above note regarding Frontier’s plan to include downstream production particularly creates more confusion for myself in that again why would you not mention GWG in this article. Please comment..
Pattie : Yes, me too. I would like to hear from Jack. There is no need to repeat a question that several posters already have asked Jack.
That is a good point. However, given Mr. Lifton’s past praise of GW I would have thought that he would have been mentioned that, for if nothing else, to head off the “What? No GW?” comments. Still, a bit surprising that GW is not mentioned at all even if the opinion is neutral or negative.
Yes Jack, Let me be the second to ask ‘What about Great Western’? I realize it is much more than a mining company but it does own potentially one of the first producing ROW Ree mines in South Africa which is very rich with heavy rees.
Regarding Tasman (I own the stock), I would add another caveat: Maybe the EU/ECB will levy a depositor tax of 40% or 10% or 6.7% (why not 100%?) on them like they did to Cyprus depositors/savers.
Maybe Jack like the rest of us is waiting for GWG to complete their PEA, I don’t know he seemed to like them in the past.
Jack, thank you for your input, always appreciated.
I would like to ask you about Mintek South Africa, the firm involved in the REE processing pilot plant for Frontier. They seem to be a common link between many REE deposits in Africa (Frontier, Namibia Rare Earths, Montero Mining) and they claim to have a proprietary REE refining technology, in the initial stages though.
So basically my questions are: 1) How advance do you think Mintek’s refining process is? 2) Is this the common link that you hint at when you say that Frontier’s separation plant will have the capability to be a toll processor for other deposits in southern Africa. As a Great Western Minerals fan, I was hoping that their SX plant will play this role.
Many thanks in advance.
SteauaOilers,
I am not referring to Mintek, about whom all I know is what I read, and I don’t know how “far” [along the REE spectrum] their refining process is. It has been my understanding that the SX plant contracted from a Chinese supplier by GW was to be a light rare earths separation plant. I am not aware of any specific plans by anyone to build either an SEG, HREE, or a total spectrum separation plant in southern Africa. When I speculate on what I THINK Frontier SHOULD DO IT IS TO BUILD A TOTAL SPECTRUM REE SEPARATION PLANT. I don’t know if Frontier is working with Mintek on that refining target. I am GUESSING that they are, because their management are shrewd.
Thank you for the information as well as the question.
Jack
Jack, thank you for your time to write a reply. Are you sure that GW’s separation plant will only have capabilities to separate light rare earths?
Just for clarification, the fact that Mintek is involved in Frontier’s REE processing pilot plant can be deduced from Mintek’s annual 2012 report (as of March 2012). In the CEO report it is said that :
“Mintek has experienced a huge interest in rare earth elements (REE) test work and the first phase of a major pilot plant campaign was completed in the fourth quarter for Frontier Minerals on its Zandkopsdrift deposit. The second stage is currently in the planning stages and will be determined by the outcomes of phase 1. It is therefore gratifying that one of the five key projects that Mintek has secured as part of the R150-million medium term expenditure framework (MTEF) funding for the 2012/13 – 2014/15 period, is the commissioning of a rare earth elements pilot plant. As a result, in order to prepare for the effective application of the MTEF funding awarded to Mintek for the piloting and demonstration of Mintek’s REE refining technology, the current Parliamentary Grant for rare earth elements (REE) research has been refocused on the flow sheet design for such a plant”.
Thanks for the article Jack. I’m surprised that you omit Great Western on the premise of it being a light rare earth producer. I remember your ‘Where Non-Chinese Heavy Rare Earths Will Originate’ article from Sept 2012 where you identified the Steenkampskraal mine as being an HREE deposit. You were also congratulatory toward them in you Mar 2012 article titiled, ‘Jack Lifton’s Update on the HREE Derby: Congratulations Great Western Minerals.’ I’m concerned that there may be another, more ominous, reason for you to exclude them. Is the fraud investigation more far reaching than we are led to believe? Is there a problem separating the radio-nuclides from the ore? Surely there must be another reason you no longer think of GWG as a survivor?
I am going to file this Jack Lifton article with the one you reference in this publication from a year ago but didn’t link under the heading of, “What a Difference a Year Makes”!
http://www.proedgewire.com/rare-earth-intel/congratulations-to-great-western-minerals-group-ltd-tsxvgwg-shame-on-the-numerologists-who-see-patterns-in-share-price/
Hi Jack and the others
Jack I’m sure you know that but for the others I think it is worth to point out that GW will have a limited heavy separation capability i.e.for mainly only what it needs for its high temperature harden magnet alloys. From the BAR they will separate a Dysprosium/Terbium mixture that can be use in these alloys in lieu of pure Dysprosium. Also as a byproduct, if you classify Yttrium as a heavy they will also separate such a carbonate. A SEG (Samarium Europium Gadolinium) oxide mixture will also be on GW menu. Thanks Jack for all your great articles. I really appreciate them.
Ref page 12:
http://www.savannahsa.com/documents/4732/Revised%20Final%20BAR%20Jan%202013.pdf
Jack, thank you for your articles. I have learnt a lot from them. I was wondering if you could comment on GWG and its needs for mining going forward versus it being just a pure producer of rare earth metals and alloys. Do we have enough producers coming up to guarantee a steady supply of the row materials needed by GWG or do you still see a need for GWG to produce its own raw materials?
Mr. Lifton. Thank you for this and all your past insightful articles dealing with rare earths and the rare earth industry. I am having some trouble deciphering the meaning of your “survivors”. That is because I can’t find an explanation of exactly what universe of companies you are including in your assessments. Is it miners only? Is there a cutoff size of resource to be considered big enough to be included? Are dominantly manufacturers of rare earth metals and alloys included? Many would appreciate you clarifying your explaining the parameters of your report, evidently, even the owner of this site.
In Jack’s last article I pointed out that there were no scientific standards that were used and feel that this compromises the content and renders it useless beyond being an opinion piece.
Jack, do you consider GWMG to be in the rare earth junior exploration catagory in which you are predicting Frontier to be a suvivor. If so are you then saying in your opinion that GWMG will not survive?
Hello Jack; and thankyou for your opinions !
- Approx 1 year ago; you penned an article on TMR titled “Rare Earth Bull”. Down in the comments section you made mention that “Rhodia” had previously refused you the opportunity to visit their facilities; …so I am glad to see they have reconsidered, and provided you a “Very thorough tour of Solvay’s (nee Rhodia’s) Rare Earth Seperation Plant in LaRochelle France.”
- Also in your “Rare Earth Bull” article of 1 year ago; you provided the following commentary on “GreatWestern Minerals”; ……….. “” Jack Lifton March 8, 2012 at 7:44 pm
Jake,
I cannot overemphasize that GW is “The Right Size” venture for its primary targeted market, which is the fabricators of rare earth permanent magnets of the dysprosium modified neodymium-iron-boron type. I believe it will be as it says it’s going to be a profitable 150-250 million dollar/yr revenue venture with a gross margin of 30%. It will grow from there, if it wants to, by increasing magnet alloy production fed by new discoveries or acquisitions of the correct critical metals it needs. GM is also “The Right Stuff.’
Picking off more than you can chew is an adolescent game and it always ends with someone kicking the s**t out of the one who aims too high.
Bet on the cautious guy who stops for water on his way up the mountain rather than the guy who thinks he can make it in a single leap.
Philosophy over. i’m more sold than ever on the GW model. I’m glad Mark Smith got the model right anyway.
Jack “”
- Granted Jack; …GWG management has stumbled with regards to , Steens S/A development over the last year;…. yet one can’t ignore that; the resource is percentage-wise amongst the richest grades in the world; and also closely matches the alloying requirements of the customers at LCM ! …Furthermore; LCM is advancing nicely, within their brand new modern facilities at Hooten-Park c/w
commissioned state-of-the-art strip-casting, producing furnace buildouts progressing as planned; … again at the requests of their established client base !
- On a side note Jack; what do think the odds are; of GWMG having the experienced “Rhodia” perform their REE-seperation; at least on an interim basis ??
Thankyou,
u4eah
Jack you say “It has been my understanding that the SX plant contracted from a Chinese supplier by GW was to be a light rare earths separation plant.” then in another article you say “I project that Great Western Minerals Group will be in commercial production of Dy from its South African mine before the end of 2013.”
http://www.techmetalsresearch.com/2012/09/where-are-the-non-chinese-heavy-rare-earths-going-to-come-from-and-whos-going-to-buy-them/
GWMG says that from the Steenkampskraal monazite mine they will separate 15 rare earth elements present into oxides at the separation plant at Vredendal, in the Western Cape, South Africa. Are not some of these like Dy a HREE? It seems to me that GWMG/GWGQD /RARECO/LCM/GWTI is far ahead of the pack when it comes to new separation facilities or vertical integration or even just having an actual mine that will be actually producing anything compared to the ROW. GWMG has been working on this for a while now and have all the expertise needed in house let alone with there partners from GQD. Do not understand you not mentioning them at all compared to all the wannabe’s. Guess you must know something about GWMG that others don’t know.
I suspect that as of late GW has purposefully not shared any real information with anyone, not investors, the general public, nor Mr. Lifton. If real information was shared with him and he sold his shares last year as a result would that not make for an illegal insider type trade? He wouldn’t risk that.
I am in agreement about the removal of the Ce and La early in the process which according to him is easily done, as is the removal of radio nucleides. GW delayed the PEA a number of times with the stated intent of review of this process. Perhaps they’ve got it right and no one, not even Jack knows about it. If Mr. Lifton is a disciple of the competition after all, why tell him anything.
I too am very curious about why there was no mention of GW on the basis that it was “TheRight Stuff” survivor very recently. Based on that alone I think an explanation is required.
The Brief Introduction of Ganzhou Qiandong Rare Earth Group Co., Ltd
http://www.jxgqd.com/En/En_Taocan.aspx?id=2
For those concerned about Jack’s comment regarding GWG’s Vredendal separation plant only processing light rare earths, check CuriousCat1′s comment above and refer to page 12 of the recently submitted BAR for the Vredendal facility.
http://www.savannahsa.com/documents/4732/Revised%20Final%20BAR%20Jan%202013.pdf
I can’t believe he made that comment about only lights. Not the Jack we know.
Why can’t you believe it? This is the diagram, page 12, of a light rare earths separation plant with an output similar to Lynas’. It doesn’t show the didymium (PrNd) being further separated into salts of Pr and Nd; it doesn’t show the SEG (Samarium, Europium, Gadolinium) being further separated into its (salts of the) individual elements, and it doesn’t show the Tb, Dy(being further separated into(the salts of the ) individual elements. Therefore they will be collected as “concentrates” or residues left after the major constituents have been separated and removed.
I know that David Kennedy planned to produce some of the metals and alloys he would need to make magnet alloys by electrolytic reduction of molten salts obtained from Steenkampskraal, but has anyone seen a process flow chart of how the pure metal salts were to be produced? I’m not criticizing; I’m asking. I assume that ion exchange could be used in the UK or at the site, but it is slow and expensive it is possible that the terbium would simply be left as a constituent of the dysprosium. This has been done by others. It’s also possible that didymium would be used rather than a purified neodymium.
Does anyone know??
Jack, we know that the company acquired the electrolitic cells early last year. For all we know they could have figured out the process to perform the separation and perhaps do not want this news to be known by competitors. Since, they have not said so we cannot assume that this has been achieved and you will be right in not assuming it. Do you know if anyone on the West or in China has been able to achieve thisseparation?. Thanks
This separation of the individual rare earths in both SEG and HREE concentrates is done at Rhodia’s Larochelle SX operation in France. I do not know of another such capability or capacity outside of China in which, among others, Molycorp China has the capability in its former Neo Materials’ operations as does, i believe, Rhodia China in its southern China operation (like Neo Rhodia has two plants in China). Note well that the Chinese rare earth metals/alloys industry of which both Molycorp and Rhodia are parts has most of the world’s rare earth metals/alloys making capacity. The balance today of that capacity outside of China is held by Japan’s Santoku the revenues of which are 20 times that of LCM.
Jack, did you have a chance to visit LCM back in November 2012 when they organized the tour for analysts/specialists?
Thanks Jack for your comments. I certainly don’t know as I am perhaps not as curious and investigative as I should be. But your last comments regarding the use of the Dysprosium/Terbium and Dydinium mixtures is what interpret GW would be using instead of pure elements for their alloys. It is a likely explanation that makes sense because otherwise they could have just as easily asked CQD to do the flow chart to obtain pure Nd and Dy if it was that that was really needed. As for the separation of the other pure elements I am not sure I see your point. It doesn’t seem to make business sense for GW to go on that route by investing more capital for separation and having no downstream operations for these elements. It also hard to see how this would improve their survivability. Best Regards. CC.
Jack, I know Steenkampskraal is not in the same region as Frontier, but I thought you where talking all of Africa? Is it GWs lack of a PEA, or the fact that GW doesn’t pay anyone to promote their stock?
Steenkampskraal, I believe, is less than 100 km from Zandkopsdrift.
Jack, I would like to ask another question…. Are you aware of anyone trying to buy GWG? Will this be a reson for it to not be considered a survivor?
No, I am not aware of anyone trying to buy GWG.
Jack, you wrote “I love to learn, and I do make mistakes usually when and because I don’t know enough about a company. I do not and will not respond to mean-spirited comments that attempt to deflect rational argument by ad hominem and other diversionary logical fallacies.” I first became interested in REE because of the magnets that can be made from them. I believe magnets are going to be the biggest part of future technologies. I then started to read about the rare earths that are used to make the most powerful magnets. Learning about the rare earth sector and going from mine to metal are what you call being vertically integrated. I have read and learned alot about that from reading alot of your articles over the past few years. To me magnets are the biggest demand for some of the ree’s that will be needed in the future. You seem to know alot about the total vertical integration chain that GWMG pretty much came up with before all the now “hey were now gonna take it to the next step too” companies. So when you say “I love to learn, and I do make mistakes usually when and because I don’t know enough about a company.” I think I agree and want to know if you have made any mistakes in any of your past articles about GWMG because you did not know enough about them. As you can tell there is alot of interest in GWMG and I was sure they would be favorably mentioned in your coverage of African REE survivors. When I read this lastest coverage of REE survivors and saw that not only GWMG were not on the list but felt as if you didn’t even know who GWMG was. What ‘s going on Jack I figure you to be a straight shooter and to tell it like it is so lets have it is GWMG in your opinion a survivor or not? The world wants to hear you say it yea or nay…lol…
Hey Jack..I must ask what in the world changed since your November 9th article as stated below? or has nothing changed?
Thanks..Miles
“The best plan for vertical integration in the rare earth arena outside of China today is that of Great Western Minerals Group, which has 1) A previously operated thorium mine in South Africa that it is converting over to a FREESTANDING rare earths focused mine, 2) An agreement with an experienced financially successful Chinese rare earth refiner to build a solvent extraction plant at the South African mine site to separate the particular rare earths mix found there from each other, 3) An established British sited and operated rare earth magnet alloy producer, which has traditionally operated using Chinese sourced rare earths for the last 20 years and 4) is constructing a new rare earth metals refinery in the UK to produce high purity rare earth metals from the separated high purity rare earth salts to be produced by the SX plant in Africa and which metals so produced will then enhance and ultimately replace Chinese material. The result will be a Western non-Chinese vertically integrated producer of rare earth permanent magnet alloys, which alloys will go to the current European and Japanese, highly experienced, rare earth permanent magnet makers that today already buy such Chinese metal based alloy materials from Great Western’s Less Common Metals wholly owned subsidiary. The customers will not know when Chinese feed stocks cease to be used by LCM. In the GW model each technological unit is self-contained and internally managed technically. Only finance functions are directly controlled by the conglomerate’s management.
I wonder if the news out tonight about the positive PEA for Great Western will change Jack Liftons views,
http://www.gwmg.ca/html/news/media-releases/index.cfm?ReportID=203481
Jack Lifton:
Is direct or indirect investment by Chinese Government a positive or negative in your assessment of ROW REEs future worth?
Kind regards,
Jack Wu
Jack, Re: “Note well that the Chinese rare earth metals/alloys industry of which both Molycorp and Rhodia are parts has most of the world’s rare earth metals/alloys making capacity. The balance today of that capacity outside of China is held by Japan’s Santoku the revenues of which are 20 times that of LCM.”
1. What about the Showa Denko? Don’t they have a Chichibu Plant in Japan producing 5,000 tons of REE alloys? Also, in Vietnam I think they have a plant with 800 tons capacity?
2. The GW’s LCM is being expanded to produce around 4000 tons of new high performance strip cast rare earth alloys a year. GW management says it is driven by LCM’s existing customers. They also hope that LCM will be like a magnet to attract new customers. Do you think there’s a potential for GW’s future profits to rise significantly, maybe even compete with the likes of Santoku and Showa Denko alloy departments given the stable and low cost raw REE feedstock coming into LCM from SKK in a couple of years?
I don’t count any production in China as foreign (to China) production, because the Chinese law gives the national government the right to control (not to steal) any raw material processed in China [even imported raw materials].
You’re right, by the way, Showa has production “capacity” in Japan, China, and now Vietnam. I used to think that Vietnam was an insurance policy, but its feedstock is Chinese, so I suspect that Showa has a Chinese partner or partners, because I think that there’s also a (Chinese) SX plant in Vietnam. If any of you know whether or not Showa in fact does its own SX please tell us.
Next topic; Keep in mind that LCM does not market cerium metal or alloys, but it does have, in Troy, Michigan the one non Asian plant that was designed to produce nickel metal hydride battery electrode alloy, which, if it were recommissioned, could use a lanthanum metal or alloy feed. LCM, in the UK, can and does make, as I have read, neodymium iron boron magnet alloy.
Note that 4,000 tons of such alloy requires 1300 tons of neodymium and probably 40-120 tons of dysprosium, so that Steenkampskraal production must be augmented and the metals plant must be brought to full production over time. Capacity is not production.
Last year a Dutch rare earth permanent magnet maker went bankrupt, because of its dependence on Chinese supply and pricing. LCM doesn’t make magnets; it makes magnet alloy. As far as I can determine it is the only significant independent magnet alloy maker outside of Asia (Molycorp’s deal with Santoku seems to me to be basically a marketing deal, and I don’t count Neo’s Chinese operations as non-Chinese). LCM did $20,000,000 last year, and it has a good reputation for product quality. Its plan, I believe, calls for it (Great Western Technologies Inc )to become a $150,000,000 per year company. Santoku doesn’t own or operate a rare earth mine, Showa Denko doesn’t either. Does LCM really need to do that??? I have been looking at RE processing as deeply as I can for the last couple of years. Believe me that processing (separating and puriftying) of the rare earths by solvent extraction has a long learning curve. If you don’t believe me just ask Constantine Karyannoupoulos how easy it has been to get Project Phoenix up and running.
Jack,
“Does LCM really need to do that”, you ask? I thought that was the whole point of “vertically integrated” and “assurity of supply”, etc. At one point, you were a proponent of that line of thinking. It seems as if something has changed in you rmind. Would you care to share your current thinking? Does the PEA at SKK enter into that at all? Thanks for the input.
Jack,
Re: “Does LCM really need to do that???”
I would think that in order for the LCM to achieve the production of the 4000 tons of neodymium iron boron magnet alloy per annum, GW would have to enter into the long term contracts with its customers. I would guess those customers would sign those contracts with GW only if they are sure that GW is able to provide a stable long term supply of alloy that is uninterrupted by REE feedstock unavailability issues outside of China. That is why bringing the SKK mine into production seems to me to be a key factor for the survival and profitability of GW and its LCM alloy department.
Re: “Believe me that processing (separating and puriftying) of the rare earths by solvent extraction has a long learning curve.”
Isn’t that why GW signed a JV with the Chinese experts (GQD) for the separation facility to be built in South Africa?
Also, it looks that GW is making good progress with the ability to produce REE metals from REE oxides. Below is from the blog of Ed Richardson who is a vice president of Thomas & Skinner, and president of the United States Magnetic Materials Association (USMMA):
“One can be somewhat encouraged that Less Common Metals, which is part of Great Western Minerals Group, recently added electrolysis cells to its operation in the UK. These cells are not operational yet, but reports indicate that they will be up and running by July of 2013. This is a big step in terms of breaking the hold China has on global oxide to metal production. Watch the news for further developments in this area.”
More details at this URL: http://www.magneticsmagazine.com/main/blogs/a-break-in-the-rare-earth-magnet-value-chain-fused-salt-electrolysis/
Here an excerpt from the analysis of Byron from December 2012:
“The staff at LCM is also beginning to study the use of electrolytic cells for the making of rare earth metals from oxides. Rare earth fluorides are heated in a graphite crucible insulated with ceramics. A metal electrode serves as the cathode, to eventually accept the pure rare earth metal. Neodymium or didymium oxide is poured into the fluoride flux, and a high current (4,000 A @ 12 VDC) is passed through the liquid, both keeping it molten as well as sending Nd or Nd/Pr metal to the cathode while oxygen is sent to the graphite anode. If this sounds something like the making of aluminum from alumina, it is exactly the standard Hall-Héroult process. The cell operates continuously for about three months until it is shut down
for refurbishment. During this period, each pilot-scale cell produces 5 kg of Nd metal per hour; six such pilot cells can supply one 600 kg Ulvac stripcast furnace. Ultimately, larger cells will be required as the allocated area within LCM for metal making is not large enough to accommodate 30 cells and their individual power supplies. However, these pilot cells, built in China, will serve as the base from which LCM will develop a fully functional set of completely automated Hall-Héroult electrolytic cells, designed to operate without any attendants, 24 hours a day for three months. And in completing this development, LCM expects to be able to at least match or possibly undercut Chinese metal-making costs.”
Thanks Jack for the thoughts and guidance. It is very much appreciated.
I am one of those non-techinals that think that, though for personal and professional reasons you could not include Tantalus and AMR in Africa and Europe, respectively, they are some of the non-mentioned survivors.
I would also like to know if it now makes more sense to actually start categorising the REOs into LaCe, Pr-Nd, SEG, HREO and CREO?. I am a geologist and from your erudite article, it seems that this would make much sense, maybe? Then one can immediately see what percentage LaCe is and immediately take it out of the equation?
Thanks.
Either way there is a cost to the removal of Ce and La whether it is at the RECl or separation plant. The two plants can be considered one process really. GW’s PEA is for the first 5000 T of REO production. The intention, with an expanded resource, is to produce more. As that happens more of the new technologies, if they exist to in an economic form, would be incorporated. Timing is everything. This program gets their true vertical integration business model on the tracks.
David,
Add Y to your categories, and they are an excellent set of metrics. But you must also factor in the costs of “cracking the ore” and of separating it into the “classes” of rare earths defined by the metrics. When you’re done with that you need to look at the demand for each class to see if the class or any of its components are assets or liabilities. Then you need to see if you can separate the individual critical (and sale-able) rare earths from their sister members of its class.
I very much am perplexed at the people who just put a box on a chart that says “separate,” and tell us that “they” will separate, purify, and (apparently) market these complex products as if the world is standing still technologically and standing still with regard to resource production and allocation.
If you think people are annoyed with me for not mentioning a company that I used to follow closely you should hear what they say in Detroit when I tell them (the engineering groups at the OEMs) that their announcements that they are going to stop using rare earths are just bull****, and they know that this is bull****.
Thanks, very much, for being reasonable.
Thanks Jack for all your sharing and clarification. It has certainly been of very great educative value to me.
I hope the company you’re referring to as “a company you used to follow closely” is not GWMG.
In an article on this website (Great Western Saga) on Nov. 22nd 2012 you are quoted giving a lengthy explanation of GWMG’s status. You use phrases like “I’m sure GWMG will be successful”, “I’m sure [Gary] put GWMG on the right track” and “I have heard nothing that causes me concern.”
So why are they now a company you “used to follow” if you were very recently sure of their success and had no concerns? This discrepancy is why you are being hounded by people on this board.
I have no opinion one way or the other regarding your silence on GWMG. I think there could be many reasons for why you’ve decided to go mute (although it seems most likely that your opinion of the company has changed for the worse).
I just feel it’s disingenuous to act like people are being unreasonable for hounding you on GWMG. You have been EXTREMELY vocal for a long time. When you’re knowledgable and vocal people take notice.
Regardless, I’m with you on your prediction for Frontier. The South Korean government (top 15 world economy) currently values Frontier at $238 million and the market is content to value it at ~$60m. Insanity.
Thanks for your time Jack.
What about Stans Energy?
Ask for Great Western Minerals Group news and you shall receive…http://bit.ly/Ym08q7
Jack I find it interesting that you have 43 comments and almost all regarding GWG, what do you make of GWGs newly released PEA ?
Jack,
Light rare earth smelting and extraction separation production line.
Jack..I must say after heaping SO MUCH PRAISE upon Great Western, your new found silence is deafening and frankly disconcerting. I will find it even more relevant if you don’t address your change of mind or concerns. People read your words and perhaps place a disproportionate value upon them. That being said, you are respected within the field and such a change of heart seems worthy of an explanation. Regards, Miles
On a separate topic, looks like Lynas has fought its last battle against SMSL….I hope:
http://www.tradingroom.com.au/apps/company_annoucements.ac?contentUrl=http%3A%2F%2Fnewsstore.com.au%2Fapps%2FviewDocument.ac%3Fsy%3Dtpl_nws%26ss%3DTPL%26docID%3DGCA01392889LYC%26backTo%3Dhttp%3A%2F%2Fwww.tradingroom.com.au%2Fapps%2Fqt%2Fquote.ac%3Fcode%3Dlyc
Great stuff Jack, your forthright attitude stimulates more meaningful dialogue than a 100 similar commentaries, looking forward to part 3.
Major impression I keep on getting is the vast majority of punters, myself included, had absolutely no idea of the complexity of this market when they made a bet on the winners & losers.
Next 12 months should sort that and look forward to further “real world” commentary as this fascinating story continues.
Jack Lifton
on March 18, 2013 at 9:37 AM said:
David,
Add Y to your categories, and they are an excellent set of metrics. But you must also factor in the costs of “cracking the ore” and of separating it into the “classes” of rare earths defined by the metrics. When you’re done with that you need to look at the demand for each class to see if the class or any of its components are assets or liabilities. Then you need to see if you can separate the individual critical (and sale-able) rare earths from their sister members of its class.
I very much am perplexed at the people who just put a box on a chart that says “separate,” and tell us that “they” will separate, purify, and (apparently) market these complex products as if the world is standing still technologically and standing still with regard to resource production and allocation.
If you think people are annoyed with me for not mentioning a company that I used to follow closely you should hear what they say in Detroit when I tell them (the engineering groups at the OEMs) that their announcements that they are going to stop using rare earths are just bull****, and they know that this is bull****.
Thanks, very much, for being reasonable.
Jack, when you state “If you think people are annoyed with me for not mentioning a company that I used to follow” Yet on TMR you used to claim to follow alot of REE companies 200+ or something like that. To say that GWMG, (if you are referring to them as a company you used to follow but have not said) why did you stop following them especially after doing quite a few articles praising them. Seems that you will not address a simple question of why you changed your mind about GWMG. Do you think that the expertise they have in solvent extraction is bogus isn’t one of their own a patent holder in some form of this process and then the fact that they have been purchasing separated REE’s from GQD for years. Are you thinking that GQD does not know how to crack the Steen monazite. Hopefully they have been working on this for over a year or more. They claim to have the final design/ plans for the separation plant which for some reason decided to increase it’s foot print. Strange how GWMG is ready to build the separation plant and you have decided that it is too complex, yet no other REE company is even close to where GWMG is. Well tell Gareth good luck on his hoping to build a separation facility that will be able to take any ore concentrate regardless of where it is from and separate it. I’ll stick with GWMG as in my opinion the rest of world has a long way to go and a short time to get there…lol…
Jack, would you do us all a favor and call in questions to GWMG’s new CEO Marc Levier he is a metallugist and would surely be able to answer any questions you might have concerning GWMG’s ability to survive the cull…lol… It would be awesome to hear you question your concerns in a live conference call. Imean you seemed to have no problem with calling out Moly Corp on their future prospects heck they even threaten you with a law suit which you boldly took on…lol… C’mon Jack tell it like it is I’m sure Marc would be more than happy to answer your loss apparent loss of confidence in your used to be number on pick of “best of breed” unless of course you are not sure…lol…
This is starting to sound like a school yard spat. These articles are just his opinions. People, don’t take it so personally. Just take it as part of your due diligence and move on.
I’ll move on after Jack answers my questions until then I will keep asking for an answer and see if he has one. Then I will move on. Just answer the question is GWMG in Jack’s opinion a suvivor or not should not be so difficult to answer in my honest opinion.
Another great read … thank you Jack
From reading the numerous comments, the issue seems to be that the flowchart submitted in the environmental report “doesn’t show the didymium (PrNd) being further separated into salts of Pr and Nd; it doesn’t show the SEG (Samarium, Europium, Gadolinium) being further separated into its (salts of the) individual elements, and it doesn’t show the Tb, Dy(being further separated into(the salts of the ) individual elements.”
Jack later states (to save you the effort of searching) that, “I know that David Kennedy planned to produce some of the metals and alloys he would need to make magnet alloys by electrolytic reduction of molten salts obtained from Steenkampskraal, but has anyone seen a process flow chart of how the pure metal salts were to be produced? I’m not criticizing; I’m asking. I assume that ion exchange could be used in the UK or at the site, but it is slow and expensive it is possible that the terbium would simply be left as a constituent of the dysprosium. This has been done by others. It’s also possible that didymium would be used rather than a purified neodymium. Does anyone know??”
In other words, it’s hard to know and GWG hasn’t publicly released this information, although we do know that they have purchased the aforequestioned electrolytic cells. Hopefully the conference call tomorrow will answer some of these questions.
Jack, if I may, what do you make of the Y disappearing from the flowchart? Would it not be worth separating? I’ve been under the impression that it is one of the heavies that we are going to be running short of…
Dean,
The SX plant flowchart (from environmental report) has been available for public review since the beginning of October, 2012.
Jack,
Re: “If any of you know whether or not Showa in fact does its own SX please tell us.”
According to Showa Denko web site, they have built the separation plant in Vietnam. Specifically, the say they produce didymium and dysprosium metals. I am not sure about production capacity as I see different sites give different numbers, from 800 tons to 2000 tons a year.
Re: “This separation of the individual rare earths in both SEG and HREE concentrates is done at Rhodia’s Larochelle SX operation in
France. I do not know of another such capability or capacity outside of China”.
So, there’s Showa Denko’s SX plant. Then, how about another big player outside of China that seemingly can do it all, Shin-Etsu Chemical, which operates Japan’s only large-scale separation and refinement plant. Shin-Etsu is also building (already built?) a separation plant in Vietnam with a production capacity of 1000 tons a year. Probably worth mentioning here, that Alkane Resource and Shin-Etsu signed a MoU for the production of the suite of separated heavy and light rare earths from Alkane’s ore with the production rate of more than 4000 tonnes per annum (in Japan or other agreed location).
Speaking of GW, I think they have several options, for example:
- Build the SX plant with GQD which will produce LREE and SEG; Subcontract the remaining HREE mixed concentrate for a toll processing by a 3rd party; OR
- Do not build the SX plant just yet. Have mixed rare earth product produced at the RECl Plant separated through the facilities of a
3rd party; OR
- The combination of the above and what you’ve mentioned above;
pva1,
Thank you for the research. As to the Viet Nam plants of both Showa Denko and Shin Etsu. They are, if operational, SX separation plants. Metal and then alloy making are the next steps in the supply chain after separation, and they involve completely different technologies than SX. I suspect that the output of any Viet Namese plants goes back to Japan in both cases to be made into metals and alloys at the existing operations of both Shin Etsu and of Showa Denko built for that purpose.
The Alkane-Shin Etsu deal shows you how this type of arrangement MUST be done. There are no toll metal makers operating today outside of China (It is possible that the Santoku – Molycorp arrangement in Phoenix is such a deal, but I do not know) Shin Etsu’s deal with Alkane is one of MUTUAL benefit. I do not know of any non Chinese RE metal maker that is shopping for fees for toll refining.
As for your alternative choices for GW I can only say that they would have, as they well know, an uphill battle if they switched to a tolling model. Neither Shin Etsu nor Showa nor Santoku would be likely to want to assist a competitor. Ideally one of them would want to buy GW. Now that would be news.
Jack,
Thank you very much for your thoughts and insights. It is always a pleasure to read your work.
The first thing GW needs to do is to restore the trust and confidence with the investors. It looks like they are moving in the right direction. They have plenty of choices on their table. Turnaround in the making?
Hope to read about Alkane Resources, Lynas and Northern Minerals in your Part 3.
Jack would it be possible for GW to have there REEs seperated at NEOs Jamr plant ? and could you see this happening? thank you
Well thanks for not responding I guess? Although I still don’t get it as I don’t think you can beat this GWMG horse to death. If you can have at it. Jack tried yet GWMG is still kicking strong…lol… Please see my responses on Stockhouse GWG.
$0.177 closing ask yesterday on GWMGF is kicking strong?
Dear Jack,
‘ that many of the questioners are in the same position as the committee of blind men examining the elephant in the Hindu fable. They are convinced that their part of the story is the whole story. ‘
Like it or not, Jack you were the head and founder of this same committee.
Your flip flop and ‘egregious’ attitude has cost you credibility. Try as I might I could not finish reading the remainder of this article as any value of your words and reliability are now lost. I will be cancelling my Technology Metals Research membership and no longer care to waste my time with someone who has so dramatically changed his position/ opinion with such little explanation. Like it or not, Jack, you led us there and now insult us for following you. : ‘Egregious’ Definition: conspicuous; especially : conspicuously bad : flagrant ‘ Perfect word to describe your own affected change of heart. Until you choose to explain yourself with the professional candor and respect we deserve – Good-bye.
FYI……
These numbers are developed using the current FOB China pricing of Rare Earth Oxides as of March 26th., 2013.
ZANDKOPSDRIFT SMM BOKAN MTN
Insitu Value Per Tonne of Ore $1,258.41 $6,251.91 $514.42
Kilograms of Nd/Pr Per Tonne of Ore 6.290 37.560 1.348
Value of Nd/Pr Per Tonne of Ore $497.83 $2,971.84 $106.43
Kilograms of Eu Per Tonne of Ore 0.186 0.0982 0.0300
Value of Eu Per Tonne of Ore $288.30 $152.15 $46.50
Kilograms of Tb/Dy Per Tonne of Ore 0.250 1.640 0.342
Value of Tb/Dy Per Tonne of Ore $160.27 $1,476.49 $242.24
Kilograms of LREE Per Tonne of Ore 28.580 150.800 4.61
Value of LREE Per Tonne of Ore $743.69 $4,237.88 $144.88
Kilograms of HREE Per Tonne of Ore 2.330 12.810 2.534
Value of HREE Per Tonne of Ore $514.72 $2,014.03 $369.54
Kilograms of CREE Per Tonne of Ore 6.733 39.673 1.720
Value of CREE Per Tonne of Ore 946.40 $4,600.48 $395.17
Kilograms of SEG Per Tonne of Ore 1.333 7.804 0.583
Value of SEG Per Tonne of Ore $325.10 $404.37 $65.73
Read more at http://www.stockhouse.com/groups/messagedetail.aspx?&m=23123540&pd=1#wWwUGP1pDEUW6Awr.99
Hello Jack!
Thanks for some good reading.
I’ve read some about the support that the American REE companies get and understand that the Chinese companies have support, but the European companies? The only thing I’ve found searching the internet is EURARE, an European Union financed project that started earlier this year.
/Johan