Monday, July 04, 2011

Rare Earths: Why Japan's Mitsubishi UFJ Financial Group buys not the map of the Pacific Ocean Floor with REE dirt, but $324m stake in Lynas Corp.? tnr.v, ilc.v, czx.v, lmr.v, abn.v, ura.v, rm.v, cgp.v,,, abx, ree,, mcp, gwg.v, rm.v, clq.v, wlc.v, li.v,, ruu.v, pl.v, mdl.v, efg.v

  While all social media was getting crazy today about Rare Earths found by Japan on the floor of the Pacific Ocean, Japanese companies themselves are making the real business in order to secure the real Rare Earths supply. We were really surprised today by the magnitude of the interest or even manipulation of the social media with the news about Rare Earths findings on the Pacific Ocean Floor. 
  Some articles have even suggested that "the REE could be easily extracted using acids on the ships excavating the ore" (or dirt with these kind of grades) from the Ocean Floor miles below the surface. Acid, Ocean Floor, Radioactive waste, 20 years time development - should we even continue? Every economic deposit is the function of grades, commodity price and technical ability to extract the valuable material in environmentally acceptable way. Do not sell your solid REE plays yet and maybe even use this opportunity to buy more. 
  There is Lithium and Gold even in the sea water - the question is how to extract it economically. Some Korean companies are seriously considering extraction of Lithium from the sea water - will it ever happen? Depends on the Lithium prices. But before it all juniors with the real Lithium projects will fly to the moon. Do not mistaken, please, Lithium - which belongs to Rare Metals like Tantalum - and Rare Earths. BBC has even put in the most quoted article that Japanese researchers has found "heavy concentrations of the rare earths" - we guess they missed that actually Japanese researches were talking about so-called "Heavy Rare Earths" and not the grade of the REE in the sea mud.
  Our take on all this hype will be - that Rare Earths are still the mystery for the general public and the idea that China controls 97% of this market is making panic across all spectrum of politicians and mass media now. This discovery is from the same category as Lithium riches in Afghanistan, but with added miles of the water above it. You have to stop the war, invest billions in the infrastructure and then you can enjoy Lithium twenty-thirty years time.
  On the positive side - now nobody can complain that we can not move to sustainability and stop our Oil addiction because of Rare Earth or Lithium - for that matter - shortage. We have enough Rare Earths and Lithium to make the Energy Transition, question is when and at what prices these resources will be available. Gold industry veterans will tell you that now Majors are mining with grades what just fifteen years ago were considered the Gold dust, but here we have even more dramatic conditions. Our gestimate will be that all Rare Earths and Lithium Juniors with solid projects will be flying like ten baggers before we will see first commercial production of Lithium from Afghanistan or Rare Earths from the Pacific Ocean floor.

  Real moves by the Chinese, Korean and Japanese companies in the market with M&A deals in Lithium and Rare Earths are providing the necessary practical support to our thinking. Theoretical base will be provided by Jack Lifton not later than tomorrow we guess - he called it before "Afgan Lithium and Other Nonsense". On the serious note - James Dines has recently made his call on Rare Earths as the  last buying opportunity at these levels again and he was talking even about possibility that Japanese automakers were closing plants not only because of the Tsunami disruption, but cut in supply of REE.

The Australian:

Japan's Mitsubishi UFJ Financial Group buys $324m stake in Lynas Corp

DAVID FICKLING From: Dow Jones Newswires July 05, 2011 9:06AM

JAPANESE bank Mitsubishi UFJ Financial Group has taken a 9.99 per cent stake in rare earths developer Lynas Corp.

The bank bought 170.1 million shares in Lynas in a series of transactions between May 24 and June 7, a statement to the Australian Securities Exchange said.

At current prices, the stake is worth about $324 million.

Japan is the world's largest importer of the rare earth elements to be produced by Lynas, where companies such as Toyota and Shin-Etsu Chemical use some of the metals for applications such as high-strength magnets and semiconductors.

Western politicians and industry groups have grown concerned over the past year that China, which produces about 90 per cent of global rare earths supplies, could use its control over the market for leverage, leading to a desire to source the metals from other countries.

The Register:

Pacific rare-earth discovery: Actually just gigatonnes of dirt

Take a lot of acid and it might seem valuable
By Tim Worstall •

Posted in Science, 4th July 2011 15:19 GMT

There has been a lot of excitement over a recent paper by Japanese researchers who have discovered billions – hundreds of billions – of tonnes of rare earths under the Pacific Ocean. Those rare earths, you will recall, are essential to so much of modern technology, from those sweet little earbuds of your iPod and the magnets in a hard drive, through to planet-saving windmills and the crystals that make an MRI machine work.

And yes, it's true, scientists have located vast deposits – hundreds of billions of tonnes of rare earths – at a depth of 5,000 metres under the ocean. The paper is here and thanks to the miracles of people with full Nature access I've been able to read it. The basic problem is the difference between what is technically possible and what is economically possible.

What they've found is that there are vast plains of silt in various parts of the ocean where there's a decent concentration of the rare earths: 1,000 to 2,000 ppm sorts of levels, a kilo or two per tonne, 0.1 to 0.2 per cent. They surmise that the cause is iron fumes that come out of the mid-ocean vents collecting and concentrating the rare earths from the seawater before falling to that ocean floor. Some of the beds of these silts are tens of metres high (up to 50 in places), according to their estimates. Yes, there's an awful lot of rare earths there.

But is it worthwhile to extract it?
However, the part that doesn't make sense, at least not to me, is how to then make this silt a worthwhile source of extraction. They're certainly correct that if you dredge it up then wash it in dilute acids then you'll get a nice concentrate of the mixed rare earths. Easy enough to cut the salts out of that and dump your old acid over the side along with the 99.9 per cent of the silt you don't want any more (hey, we're in mid-ocean here!).

However, a concentration of 1,000 to 2,000 ppm isn't actually anything all that much to write home about. That red mud which went splat over Hungary has about the same sort of concentration. As does the other 40 to 80 million tonnes a year produced, including the 2 billion tonnes lying around in ponds. We've known for decades that we can extract the rare earths from this stuff: wash it in acid and get a nice solution of the metals. However – and here's the problem – you have to use so much acid that you can't make a profit doing this.

I say this not just on the Friedmanite basis that hundred dollar bills don't appear on pavements: for if they did someone would already have picked them up. It isn't that no one does this as yet, which would prove that it can't be done. It is that people have tried to do this (at least I have, in Greece, a couple of years back) and have found that the cost of getting the materials out is more than people will pay you for the materials you've got out. And this is a nice fine silt lying in ponds at ground level, silt which people will pay you to take away, not silt you've got to lift through 5,000 metres of salt water.

Yttrium and other rare earths are apparently nestling on the sea bed...
It is possible to make the red mud thing work: by taking out some of the other valuable metals first. In this way, the extractor shares overheads over multiple income streams, plus concentrating the rare earths further, reducing the acids and reagents needed and thus making it all cost effective. Send me $20m and I'll build a plant to do this. But our Japanese researchers are going to run into exactly the same problem. Extracting just the rare earths at such concentrations costs too much. So, what else can they extract to defray those costs?

I don't know – and having read their paper, I don't think they do yet either.

There's a linguistic distinction used in the mining industry, the one between dirt and ore. Your veg patch and the North Sea bed both contain gold and uranium, but they're still just dirt really. Extraction would cost more than the value of what is extracted. If we can extract the metals at less than the price we'll be paid for them, then, and only then, the dirt transforms into ore.

So far, at least as far as I can see, the researchers have just found a very large amount of rare earth containing dirt, not an ore. ®"
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