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DoD awards Australia’s Lynas $120 million to build a heavy rare earths facility in the USA: I have questions

Updated June 28, 2022: Lynas’ Managing Director Amanda Lacaze provides answers below

 

I was intrigued last week when the U.S. Department of Defense (DoD) made the announcement that it had awarded US$120 million to Lynas Rare Earths Ltd. (ASX: LYC) to build a 3-5 kta heavy rare earth separation system in the USA. This is in addition to the $30 million the DoD awarded to Lynas (to be matched by Lynas) in February 2021, for the same thing. My guess is that since Lynas built and operates the world’s largest light rare earth separation system in Malaysia where it processes ore from its Mt. Weld Australia monazite mine (the world’s largest worked deposit of monazite), it seemed like an easy decision for the DoD, provided it was prepared to overlook the skills of the domestic American market and the mandate to buy American and reshore. 

But, since the DoD had already agreed to provide US$30 million of an estimated (by Lynas) US$60 million to build such a facility in Texas, why, I asked myself was an additional US$120 million necessary? 

So, I drafted a set of questions for Lynas, the answers to which would be particularly important in a due diligence study for the project, in case the DoD either did not do a due diligence (my guess) or would not publicly answer the same questions citing national security concerns, or some such nonsense. 

Here are the questions I sent to Lynas at the beginning of this week: 

  1. What is the project’s location?
  2. What is the detailed CAPEX and the estimated OPEX for the system?
  3. When will the permitting be finished?
  4. Is the plant design finished (It would have to be for the permitting to be finalized)?
  5. What is the timeline for construction and first output?
  6. What exactly will be the composition of the plant’s output in individual rare earths and tonnages of each, and when will the (nameplate) target capacities be reached?
  7. Will the costs per KG of each individual rare earth and blend be competitive with the Chinese costs? 
  8. Will the US DoD be the only customer?
  9. Will any of the heavy rare earths be consigned to specific metal/alloy/magnet makers? and,
  10. From where, exactly, will the feedstocks be sourced? 

Question number 10 is extremely important since there is today no commercial production of heavy rare earths outside of China. Also of note is the fact that Lynas has never commercially produced any separated individual heavy rare earths, nor is its Malaysian plant equipped to do so. 

I am awaiting a reply to these questions from Lynas, but I will let you know when I get them. 

Publisher’s Update:

In response to the above questions InvestorIntel editor Jack Lifton received the following answers by email from Amanda Lacaze, Managing Director of Lynas on June 27, 2022:

1What is the project’s location?

Following a detailed site selection process, the facility is expected to be located within an existing industrial area on the Gulf Coast of the State of Texas.

Texas is an excellent location from which to serve our U.S. customers and support the U.S. government’s moves to strengthen its industrial base and make supply chains more resilient through a diversified supply.

2.  When will the permitting be finished? / Is the plant design finished? / What is the timeline for construction and first output?

The design of the Heavy Rare Earths plant was completed as part of the Phase 1 contract. The construction timeline will be confirmed following the completion of detailed engineering and planning. The plant is targeted to be operational in financial year 2025.

3.  What exactly will be the composition of the plant’s output in individual rare earths and tonnages of each?

A typical Heavy Rare Earths separation facility of this type would produce between 2500-3000 tonnes of heavy rare earths per year.  We would expect our Heavy Rare Earths production to be in this range.

We have publicly stated our expectation that the Light Rare Earths plant will produce approximately 5,000 tonnes per year of Rare Earths products, including approximately 1,250 tonnes per year of NdPr.

4.  Will the US Department of Defense be the only customer?

This will be a commercial facility and will be designed to serve both the U.S Defense Industrial Base and commercial manufacturers.

5.  Will any of the heavy rare earths be consigned to specific metal/alloy/magnet makers?

This facility is a positive step towards reinvigorating the domestic Rare Earths market, and we will work to encourage investment in value-added downstream processes including metal and magnet making.

6.  From where, exactly, will the feedstocks be sourced?

Feedstock for the facility will be a mixed Rare Earths carbonate produced from material sourced at the Lynas mine in Mt Weld, Western Australia. Lynas is building a new Rare Earths Processing Facility in Kalgoorlie to process the Rare Earth concentrate from Mt Weld. The material produced in Kalgoorlie will be further processed at the new Rare Earths separation facility in the United States. Lynas will also work with potential 3rd party providers to source other suitable feedstocks as they become available.




American OEM automotive industry’s big problem with lithium

… and why Elon Musk is wrong.

 

There isn’t enough lithium mined, and there can never be enough lithium mined and processed into end-user forms economically, to replace the use of fossil-fueled internal combustion engines in the powertrain systems of the current one and one-half billion personal and mass transportation vehicles with electric motors powered by rechargeable lithium-ion type storage batteries.

I think that most of the managers of the global OEM automotive, aerospace, and shipbuilding industries know this, but they are powerless in the face of the demands of politicians who have given in to the greens who are unaware of the limitations of physical natural resource production and processing for non fuel minerals, and who rely on the advice of narrowly and poorly educated and just plain dumb “experts” who have credentials but no experience of business operations, real-world economics or even rudimentary geology. The more often these experts repeat such mantras as “settled science” (to prove that climate change is caused by or can be remedied by human activity) or proclaim the unlimited resources of “earth abundant minerals” (to prove that non-fuel natural resources are unlimited) the more destructive their ignorance impacts our cheap energy based (which they neither see nor understand) standard of living and quality of life.

In order to preserve their industry and their high paying jobs long enough until they can safely retire, the current top managers of the global OEM automotive industry have accepted the economic power and poison of the green energy “transition” in making their decisions rather than the free marketplace.

It is typically stated that a modern internal combustion engine powered vehicle has over 6,000 components and that an EV, an electric powered vehicle, is “much” simpler. In fact, the much simpler vehicle still has some 4,000 parts.

Henry Ford pioneered the vertical integration of his eponymous car company in the teens of the last century to avoid being controlled by the natural resource “trusts” (monopolies) of his time. By the early 1920’s the Ford Motor Company manufactured internally all of its necessary component parts except for tires (Ford was a personal and lifelong friend of Harvey Firestone) and produced all of its own needs for electricity.

As the decline of the auto-industrial age proceeded after the oil price shocks of the 1970s the OEMs shed their then advanced vertical integration (almost always in order to raise money to cover losses and declining margins) and adopted just-in-time delivery of necessary parts from the then reborn and expanding external supply base. Rising American labor costs in the 1980s created a mass exodus of OEM automotive suppliers to Mexico and Asia. Shortly thereafter that Asian vehicle makers entered the US markets and rapidly learned enough to destroy the postwar global dominance of the OEM American car industry. Chrysler needed rescuing first, then GM. Ford survived the downsizing better than the others, but like them had to withdraw from the global markets of the heyday of the globalization of the pre-war (WW2) era.

Now, in 2022, the OEM American car and truck assemblers – for that is the correct term for a company that imports all of its components and assembles them into a vehicle – are being told that they must reduce and eliminate the use of imported components and find or develop domestic or friendly nation sources to redevelop domestic vertically integrated manufacturing.

At the same time, they are being told by the government that they must convert all power trains to electric drive fueled by rechargeable storage batteries.

The answer, of course, is to rebuild domestic factories to once again produce the 4000 components per vehicle they will need for EVs. There will be components which are common to both fossil-fueled and electric powertrains and vehicles, but such electromechanical marvels as modern multi-speed transmissions as well as efficient gasoline and diesel fueled internal combustion engines will cease to receive attention and the skills to build them will wither away.

The key component to be researched and manufactured domestically now has become the lithium-ion battery to be used to power the battery electric vehicles to be built. No such mass production industry for this type of component has ever been successfully built or operated by a domestic American company. The supply chain for manufacturing lithium ion batteries for vehicle powertrains does not exist today in the USA.

Let me explain how the contemporary (legacy) global OEM automotive industry finds and chooses among its parts suppliers, so you can understand the dilemma that the contemporary geopolitics of globalization has caused, in particular, in the United States and Europe.

The outside OEM automotive suppliers, of course, must have experience in building and successfully selling the components for the same or same type of use. This is not taken for granted just because of the size or reputation of the seller. All production parts accepted for use by the domestic American OEM automotive industry must undergo the PPAP (production part approval process) and the suppliers must pass a financial due diligence.

PPAP involves real time passing of the test of operating under real-world conditions for at least three years in general and for the life of the part’s warranty. For a lithium-ion powertrain battery, this means today’s operation with no more than the stated degradation of capacity for up to 8 years.

Upon passing the PPAP, the due diligence requires that the component meet the following requirements:

  • On-time delivery, to specification, in the volumes agreed, and at the agreed price,
  • Just-in-time delivery to agreed locations, no matter the weather conditions,
  • All parts must meet agreed customer specifications within a narrow quality range, and
  • Prices are agreed for the life of a vehicle model

It has been the practice of the OEM automotive industry to make the direct supplier of the component or subassembly, the Tier One supplier, responsible for the all of its (sub) suppliers to meet their PPAP requirements, even if it is the assembler who PPAPs the mechanical and electrical quality of the sub-tier supplier.

Very recently, for the first time in 25 years, the OEM domestic American automotive assemblers have begun to look at the entire supply chains for critical (without them the vehicle cannot be sold) components.

In the last year, General Motors and Ford have announced “agreements” with domestic, non producing, semi-finished raw material suppliers, of lithium and the rare earths, to provide them with raw materials (lithium) and critical component parts (rare earth permanent magnets), which the companies will somehow get processed into the forms necessary to produce rechargeable storage batteries and electric motors from a currently non-existent domestic American manufacturing base.

Tens of billions of dollars have already been allocated by the domestic American OEM automotive industry to build 7 battery “gigafactories” and several EV platform ( the battery plus the electric motor) factories. Among the domestic OEM assemblers nearly 100 billion dollars has also been allocated to the construction of dedicated and multi-functional BEV plants.

The OEM automotive assemblers have bet the farm that they can become domestic vertically integrated manufacturers of battery powered electric cars and trucks.

Yet, as of today, not one gram of ESG lithium or rare earths is produced in the United States or Canada.

Look at the following chart:

This chart from the IEAE tells you that there is no possibility of producing enough lithium to manufacture the batteries that would be required by the currently planned demand after this year.

I think that the ignorance, by politicians and journalists, of the steps universally and necessarily required in the operations of any and all global original equipment manufacturing business is due to intellectual laziness, intelligence limitations and the rapidly declining coverage and quality of American “education” at all levels.  The attempt to eliminate selection by merit, rather than expand it, and replace it with superficial characteristics as the criteria for education has rapidly eroded the ability to select those best qualified for specialized education and training and given over world leadership in science and engineering to Asian nations.

I repeat that the success of a transformation of the fuel for vehicular transportation from liquid fossil fuels to electricity stored on board in rechargeable batteries depends entirely on the supply of the element lithium.

And that energy and resource illiteracy and innumeracy among our managerial and credentialed classes are the only reason that the domestic American OEM automotive assembly industry has blindly bet the farm on a green fetish pursued by some of the dumbest (or most corrupt, or both) politicians in the history of our Republic.

The BEV revolution will not engender a second Auto-Industrial age in America. It will, in fact, end the dominance of that industry, and ensure that BEVs survive only as luxury vehicles to be driven between enclaves with charging facilities.

Elon Musk tweeted two weeks ago that Tesla may have to get into the lithium mining business. He said that although there is lithium everywhere and lots of it, the mining industry is very slow to bring it to market.

Elon Musk is a brilliant businessman and an even more brilliant financier, but he is a mineral economics moron.

I invite readers to please challenge my assumptions and conclusions with data, logic, experience, and educationally based counterarguments.




In-house production key to making Energy Fuels the world’s lowest cost producer of rare earth metals

Energy Fuels takes giant step towards complete, in-house, vertical integration in the production of rare earth permanent magnet alloys

Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR) has just this week announced that it will buy, subject to due diligence, a huge Brazilian deposit of heavy mineral sands, which it will mine to produce a concentrated mineral mix that will contain zircon, ilmenite (titanium), and monazite. This concentrate is expected to be sold to partner companies, which will extract the zircon and ilmenite as payables, and the residual monazite, a waste product in zircon/ilmenite processing, will be conveyed at a nominal cost (as part of the arrangement to supply the heavy mineral sands to partners) to Energy Fuels’ White Mesa, Utah, where the monazite will be cracked and leached to extract a clean rare earth content as a mixed carbonate and to extract and sell or legally dispose of its uranium and thorium content.

Energy Fuels is already buying, and processing monazite produced in the above way from the zircon/ilmenite operations of Chemours in Georgia, but the Brazilian purchase will allow Energy Fuels to diversify and lower its cost of monazite concentrates.

The in-house production of monazite rich heavy mineral sands by Energy Fuels will be the foundation of its program for the vertically integrated (in-house) production of rare earth metals and alloys from (in-house) separated and purified individual and blended rare earth salts.  

Energy Fuels operates the only operating uranium processing “mill” in the United States and the only facility in the United States in the U.S. capable of processing monazite for the recovery of uranium for sale to nuclear power plants, and the recovery or legal disposal of the thorium and other radionuclides associated with monazite. 

The company has already begun processing purchased monazite into a mixed rare earth carbonate, and currently has the capacity to produce thousands of tons of such mixed rare earth carbonates per year. Energy Fuels’ mixed carbonate is the most advanced rare earth product being produced at a commercial scale in the U.S. today. The company is also making major strides in producing separated and refined individual and blended rare earth products at its mill.

Comparatively, monazite contains up to 50% more of the recoverable core magnet metals, neodymium and praseodymium than the bastnaesite mined at Mountain Pass, California.

Energy Fuels is finalizing a scoping study for a dedicated, rare earths, solvent extraction separation system and is finalizing the commercialization of a new rare earth metals and alloys production process demonstration.

Within 24-36 months Energy Fuels has the potential to be the world’s lowest-cost producer of separated individual rare earths and will therefore the lowest cost producer of rare earth metals and alloys. No government subsidies have been needed. Just managerial knowledge, experience, and skill. 

Energy Fuels already is a major domestic supplier of uranium and vanadium In fact, the company announced at its AGM, earlier this week, that it has signed a decade long supply deal with two American utilities to provide them with more than 4,000,000 lbs of uranium. This contract will bring in more than USD$200,000,000 over its life. 

Energy Fuels is a producing and growing domestic American critical metals processing hub.

Disclosure: Jack Lifton is a member of  the Advisory Board for Energy Fuels Inc., and may hold securities or options in some of the companies mentioned in the above article.




Hunting the big North American rare earths elephant

“Amazing discovery… I keep making this point that there is a deficit of rare earths worldwide and Appia is the premier rare earths discovery in North America.” — Jack Lifton, Global Critical Materials Expert

A mineral discovery is the natural occurrence of a specific chemical compound or a mix of chemical compounds, which may be processed mechanically and chemically to isolate one or more forms of individual chemical elements, and then be purified and converted into useful forms for industrial use. If the discovery is extensive enough and the contained chemical compounds are of a sufficiently high enough grade for efficient and economical separation of them from each other and then can be further processed into forms that can be utilized industrially, then the large-scale production and concentration of the initial mineral concentrate is called mining.

How do you evaluate a rare earth discovery? The best way is to determine if it contains “valuable” rare earth elements, which can be economically and efficiently recovered in the jurisdiction in which it is located, in such quantities that the capital expended can be recovered at a profit.

The old-timers (aka, experienced exploration geologists and mining engineers) have just two simple metrics they use in first determining whether or not there is any point in answering this question: Grade and accessible tonnage.

Appia Rare Earths & Uranium Corp.‘s (CSE: API | OTCQB: APAAF) rare earth discovery at Alces Lake, Saskatchewan, meets the first of the above requirements, and the company is now in the process of a comprehensive drill program to determine if the second one is met as well.

The Appia discovery is of the mixed rare earth mineral, monazite, the most desirable rare earth bearing mineral on the planet. Monazite was the original rare earth mineral mined commercially in the late nineteenth century, not for rare earths, but for its contained thorium, which was heated, as an oxide in the form of a mixed ceramic mantle, with natural gas, to produce a brilliant white light for illuminating the stage in theatrical performances. Monazite fell out of favor as a mineral resource after World War II because of thorium’s natural radioactivity being highlighted as a danger in the early atomic age. Of course, electric lights, had by then long eclipsed the need for thorium.

In the 1950s though, thorium again became of interest when it was discovered that nuclear reactors for the commercial production of electricity could be fueled with thorium, which could not easily be used to make nuclear weapons. Anglo-American Mining in that period discovered the highest-grade thorium and rare earths deposit then known in the world in South Africa and began producing thorium for the UK’s civilian nuclear reactor program. Thorium reactors fell out of favor by the mid 1960s and thorium (monazite) mines were shut down, even though they were associated with high grade rare earths, because of the problems of disposing of the thorium and the then extremely expensive processes for separating the rare earths from each other, ion exchange, and fractional crystallization.

The discovery of a huge primary, accessible, mineable deposit of the rare earth mineral bastnaesite at Mountain Pass, California, in the late 1940s, and the development in the 1960s of the commercial application of solvent extraction to the separation of the rare earths, led to the eclipse of the use of high thorium monazites by bastnaesite as the primary mineral for rare earth mining.

The development of the rare earth permanent magnet in the late 1970s, at first using the rare earth element, samarium, and the rare earth elements neodymium and praseodymium, revived interest in monazite, because monazite contains 50% more, by weight, of neodymium and praseodymium, than bastnaesite.

However, the low thorium bastnaesite in California, because of its accessibility, became the world’s largest source of the magnetic rare earths, samarium , neodymium and praseodymium by the early 1980s. It was eclipsed by the bastnaesite recovered, more economically, as a byproduct of  iron mining in China’s Inner Mongolia by the late 1980s. The Chinese iron deposits also contained some monazite, and this was processed there also to recover the rare earths. The thorium co-produced was stored, but its radioactivity ultimately led China to bring its control under the aegis of its China Nuclear Corporation (CNC), which stored it along with any other thorium produced as a byproduct of rare earths or its own uranium minerals processing.

Today, as Chinese bastnaesite grades seem to have declined from high grading and as pollution (environmental) consciousness has come of age in China, monazite, as a source of magnetic rare earths has revived dramatically in China. And China has become the world’s largest processor of monazite. Chinese mining and processing companies already import nearly 40% of their rare earth ore needs annually. They get bastnaesite from California and CNC is licensed to process up to 5o,ooo tons per year of monazites containing up to 30,000 tons of rare earths. All monazite imported into China must first go to CNC for thorium and uranium removal, before it goes to the Chinese purchaser, which will then recover the rare earths contained. China buys monazites as ore concentrates from the USA (until very recently), Brazil, Madagascar, Australia, and Myanmar, and Chinese companies are scouring the world seeking more.

The Chinese had the use of monazites as a source of magnetic rare earths to themselves until 2017, when Australia’s Lynas Rare Earths (ASX: LYC) went into commercial production and separation of the individual rare earths from its massive monazite mine at Mt. Weld, Australia. Then. in 2020, the only privately owned licensed uranium ore processor and thorium storage facility in the USA, Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR), began a project to process monazite for its rare earths and to stockpile and sell the uranium recovered and store the thorium. Energy Fuels is and remains the sole such facility in the Americas. Its business plan is to become vertically integrated by building, on-site, a separation facility, and a rare earth metals and alloys operation also.

Energy Fuels has acquired domestically produced American monazite from the heavy mineral sands operations of The Chemours Company, and is actively seeking additional materials both domestically and internationally. Energy Fuels has already produced and sold commercial quantities of mixed rare earth carbonates cleaned of uranium and thorium.

Now, at last, we come to Appia and Canada’s entry into the rare earths’ mining and processing arena.

Australia’s Vital Metals Limited (ASX: VML | OTCQB: VTMXF) is now mining bastnaesite just outside of Yellowknife in Canada’s Northwest Territory from a high-grade deposit discovered by Avalon Advanced Materials Inc. (TSX: AVL | OTCQB: AVLNF) and licensed to Vital. The ore concentrate will be first sent to an operation being built by the Saskatchewan Resource Council (SRC), a Crown Corporation, where the uranium and thorium will be removed and a mixed rare earth carbonate produced for use in further downstream processing. The first such production has already been pre-sold to both American and European processing customers.

But the SRC has plans to construct not only a cracking, leaching, and radioactive recovery and storage system (Saskatchewan is Canada’s largest uranium mining and processing province, so the business there is well established and understood), but also a rare earths separation system in the form of a dedicated solvent extraction facility, the first of its kind in Canada.

Now we come to Appia Rare Earths & Uranium Corp., a Canadian company, originally exploring for uranium in Saskatchewan’s world-famous Athabasca Basin. About 5 years ago its then geologist discovered a dramatically high-grade sample of monazite on the company’s Alces Lake Property in Saskatchewan. He soon found that the sample had come from an outcrop showing extensive monazite veining. He continued to explore the area and predicted that the monazite field was extensive.  Analysis of samples he took showed that it was also the highest grade neodymium rich monazite ever found in North America.

I was a speaker that year at a Metal Events’ Rare Earth Conference in Henderson, Nevada, and the Appia geologist, James Sykes, was an attendee. I had never met him, but we shared a cab to the airport, and he excitedly told me the Alces lake, monazite, story. I was intrigued, but I had reservations about the thorium and uranium that would be present in such a high-grade material. I thought of the highest grade rare earths deposit ever worked, Steencompskraal, in South Africa, which was actually worked as a thorium mine with no interest (in the 196os) in the rare earths contained. I didn’t then know of the monazite project in China or CNC’s role in it. I listened politely to Mr Sykes and wondered what anyone would do with this discovery if it were confirmed to be extensive enough to qualify as a NI 43-101 resource.

Did I mention that James Sykes also said that he believed the extended discovery to be near surface, so that a quarrying operation would obviate the need for underground operations?

It is now the Spring of 2022, and Appia has raised approximately $15.5 million in the last year. This funding is for a drilling program which is underway to prove a resource.

Energy Fuels is processing monazite, the Saskatchewan Resource Council has approved $31 million to acquire monazite, and other rare earth ore concentrates, and build a first of its kind in Canada cracking and leaching and separation facility dedicated to rare earths, and Canada’s Ucore Rare Metals Inc. (TSXV: UCU | OTCQX: UURAF) has begun construction of a Strategic Metals Center in Alaska for the central processing of critical metals, beginning with rare earth mixed carbonates from a variety of sources including Canadian and Australian monazites.

Appia’s drilling results so far are very encouraging, and have been extensively reported.

I think we may see the highest grade neodymium-rich monazite in the America’s flow from Alces lake before 2025. If so, It will certainly be in high demand.

Did I mention that the Appia monazite discovery contains 1% of xenotime, the hard rock mineral source of yttrium, dysprosium, and terbium? A one-stop-shop for magnet makers?

The stars and this planet are coming into alignment for this one. Monazite is back.

Disclosure: Jack Lifton is a member of Appia Rare Earths & Uranium Corp.’s Advisory Board and  the Advisory Board for Energy Fuels Inc., and may hold securities or options in some of the companies mentioned in the above article.




Betting the farm on lithium in the short term and the long term.

Politics Before Economics: The Coming Train Wreck of Peak Lithium, Mandated EVs, and Alternate Electricity Generation

This is the best time ever to invest in lithium mining and processing because the legacy global OEM automotive industry as well as dozens of newcomers, including TESLA, have bet their continued and future existence not on the market but on the politically mandated ultimate replacement of internal combustion engine power trains by rechargeable battery fueled electric ones. This powertrain replacement is to be 100% dependent on lithium-ion batteries to store the electricity (i.e., fuel) to supply the electric motors that will replace fossil fuel using internal combustion engines. These EV batteries are, for their operation, 100% dependent on the chemical element, lithium.

At the same time, the politicians have also decreed that the generation of relatively inexpensive electricity, which today is mostly done by the use of the fossil fuels, coal, oil, and natural gas (with the balance, more than 20%, coming from nuclear) shall be completely replaced by alternate forms of electricity generation dependent upon the wind and the sun with their excess outputs stored until needed in lithium ion batteries. Wind and solar are, at best, intermittent, and they are therefore not remotely reliable or dependable. They exist only because of government subsidies and, worse, mandates. Alternate energy generation being intermittent must be smoothed out (continuously maintained) ideally (in the Green Dream) by backup batteries. This would ultimately require enormous quantities of lithium, more than for EVs, for the gigantic smoothing and backup systems that would be necessary.

From the perspective of the supply of the key critical battery metal, lithium, these two goals, electrification of mobility and stationary storage of electric power for grid smoothing are competitive with each other for lithium, and this competition shows the complete ignorance of politicians and manufacturers of the fact that the overall demand for lithium from the two mandated uses cannot possibly be supplied from currently existing, planned, or known accessible sources.

A recent article in the Wall Street Journal states that “mining is like anything else. Eventually high prices stimulate more production. But the slow real-world expansion capabilities of mining explain the IMF’s forecast that mineral inflation would last “roughly a decade” until supply catches up.”

This is utter nonsense.

Mining any natural resource is entirely dependent on the physical accessibility of the resource, the grade (concentration) of the desired mineral, the ability of deployable technology to extract the desired mineral, the economics of the processing of the mineral concentrate to a usable form, and that the total costs incurred by the entire supply chain can be borne by the selling price for the end user products enabled or manufactured from that resource.

Supply of anything cannot “catch up” to demand if that supply is limited by a maximum price limit for the demanded form and for the accessibility, grade, and applicable process technology for the “deposit.”

The highest grade accessible and processable deposits of lithium from brine and from hard rock minerals are, respectively, in Chile, Argentina, and Australia. These deposits are already mined at scale and represent the lowest cost of production today. So, since the highest grade, accessible, physically and technologically, deposits are in production why can’t they just ramp up and supply any amounts of lithium needed? Those writers who are ignorant of geology, mineral economics, and geopolitics, and who are not aware of the limitations of contemporary known deposits of natural resources, think that lithium production is organic, i.e., that to get more lithium you simply do more mining. But, in fact, all mineral deposits decline in grade and fall below economic grades after a time. The period during which the mine is projected to be profitable is called, for that reason, the life of the mine.

In 2007 the global production of lithium, measured as metal, was 16,000 tons. In 2021 that figure was 86,000 tons, a 5.5X increase. Yet at the beginning of 2022, the price of metallic lithium, $60,000 a ton in January 2021 had reached $360,000 a ton! I note that lithium metal is now more expensive than silver.

Why?

The demand for lithium today just for batteries is 60% of global lithium production, and new battery factories are coming online and being planned and under construction daily. The total demand for lithium for all of these factories by 2025 is calculated to be 2.5 times total global lithium production in 2021. By 2030 that figure would be 5 to 10 times the total global 2021 output of lithium.

It is likely that the lithium supply is already in deficit due to existing battery factories buying for inventory and traders buying for speculation.

The legacy OEM car/truck makers have almost all allocated essentially all of their R&D capital and their new manufacturing construction to EVs. The better managed ones realizing that the total conversion of their outputs solely to EVs cannot be supported anytime soon, if ever, by the lithium supply chain and that the cost of such vehicles is already prohibitive in the mass market are hedging their bets by continuing to plan for a mixed output of EV and fossil fueled powertrains indefinitely.

Mis-allocations of capital in the most capital intensive industry on earth, the OEM automotive industry, cannot be reversed rapidly, and the damage to competitive advantage from losing the lead in internal combustion engine and transmission development could be fatal. This misallocation is not confined to the assembly operations of the global legacy OEMs. It could also be fatal to suppliers of ICE specific components.

There are today some 1.5 billion ICEs in use globally, and the number is growing. Imagine that each of them will use on average 4 kg of lithium, measured as metal, for a 50 kWh lithium-ion battery. A Tesla Model 3 uses 6-8 kg for a 100 kWh battery. So to replace just today’s powertrains would require 6 billion kg of lithium, or 6 million tons of lithium, or 36 million tons of LCE (lithium carbonate equivalent). This is more than 70 years total global 2021 lithium production with nothing left over for the stationary storage market for grid smoothing of wind and solar generation. Neither conversion will ever happen, because it is beyond the capability and capacity of our current know-how in mining, refining, and fabricating the end-use raw materials.

The looming and fatal to the green revolution lithium supply deficit has spawned an enormous price increase for the metal and its compounds, which has reversed the steady decline in the costs of lithium-ion batteries.

But is it too late to stop the attempted suicide of the global OEM automotive and electric energy generating industries?

Cars and trucks running on high priced electricity generated by increasingly expensive wind and solar systems backed up by hugely expensive stationary storage battery parks will not have large enough markets to be self sustainable or reasonably priced.

Lithium mining and processing will boom until no one can afford the vehicles or the electricity. At some point before that occurs the decarbonization of Western society will reverse and steel, aluminum, oil and gas will return to their central place in our world of cheap energy. Until then look for lithium, the rare earths, copper, and uranium to enter a long Super Cycle.

Betting the farm on lithium in the short term and the long term.




Jack Lifton, Byron W. King and Ur-Energy’s John Cash explore the future direction of the American uranium industry

In this episode of Critical Materials Corner, Jack Lifton and Critical Materials Corner Co-Host & InvestorIntel Columnist Byron W. King speak with John Cash, CEO of Ur-Energy Inc. (NYSE American: URG | TSX: URE).

John explains that Ur-Energy is today producing yellowcake, the commercial form of uranium, by the environmentally friendly method of “in-situ” mining, which he explains. Ur-Energy then processes the mine output to commercial yellowcake.

John rounds out the discussion by defining the size of the American domestic market for uranium. He tells us where and in what form uranium for domestic American civilian use originates; what parts of the domestic American uranium supply chain are deficient; and whether or not America can ever have a secure domestic supply of uranium for its largest in the world civilian nuclear electricity generation industry.

This is a must-see video for all of those interested in green energy self-sufficiency for America.

To access the complete episode of this Critical Materials Corner discussion, click here

About Ur-Energy Inc.

Ur-Energy is a uranium mining company operating the Lost Creek in-situ recovery uranium facility in south-central Wyoming. We have produced, packaged, and shipped approximately 2.6 million pounds U3Ofrom Lost Creek since the commencement of operations. Ur-Energy now has all major permits and authorizations to begin construction at Shirley Basin, the Company’s second in situ recovery uranium facility in Wyoming and is in the process of obtaining remaining amendments to Lost Creek authorizations for expansion of Lost Creek. Ur‑Energy is engaged in uranium mining, recovery and processing activities, including the acquisition, exploration, development, and operation of uranium mineral properties in the United States. The primary trading market for Ur‑Energy’s common shares is on the NYSE American under the symbol “URG.” Ur‑Energy’s common shares also trade on the Toronto Stock Exchange under the symbol “URE.” Ur-Energy’s corporate office is located in Littleton, Colorado and its registered office is located in Ottawa, Ontario.

To learn more about Ur-Energy Inc., click here

Disclaimer: Ur-Energy Inc. is an advertorial member of InvestorIntel Corp.

This interview, which was produced by InvestorIntel Corp., (IIC), does not contain, nor does it purport to contain, a summary of all the material information concerning the “Company” being interviewed. IIC offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This presentation may contain “forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking statements are based on the opinions and assumptions of the management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Prospective investors are urged to review the Company’s profile on Sedar.com and to carry out independent investigations in order to determine their interest in investing in the Company.

If you have any questions surrounding the content of this interview, please contact us at +1 416 792 8228 and/or email us direct at info@investorintel.com.




Constantine Karayannopoulos, Jack Lifton and Byron W. King on the synergies between the global rare earths’ supply and the real-world markets

In this episode of Critical Materials Corner, Jack Lifton and Critical Materials Corner Co-Host & InvestorIntel Columnist Byron W. King are joined by Constantine Karayannopoulos, President, CEO and Director of Neo Performance Materials Inc. (TSX: NEO). Constantine describes the real state of the rare earth mining, refining, and end-use product industry, outside of China, as it exists and operates today, from the perspective of the largest non-Chinese owned vertically integrated, beyond the mine, rare earth products producer in the world. Questions from Jack and Byron lead Constantine to describe and differentiate today’s European and North American markets with regard to their sizes, existing supplies and suppliers, and their futures as he sees them.

Although Neo Performance Materials is a Canadian company, headquartered in Toronto, it produces and sells rare earth product lines within China, Europe, SE Asia, and North America. Jack points out that this makes Constantine Karayannopoulos a uniquely qualified expert to analyze the global rare earths’ products’ markets. And surmises that those watching may learn a great deal in this conversation about the synergies between rare earths’ supply and the real-world markets.

To access the complete episode of this Critical Materials Corner discussion, click here

About Neo Performance Materials Inc.

Neo manufactures the building blocks of many modern technologies that enhance efficiency and sustainability. Neo’s advanced industrial materials – magnetic powders and magnets, specialty chemicals, metals, and alloys – are critical to the performance of many everyday products and emerging technologies. Neo’s products help to deliver the technologies of tomorrow to consumers today. The business of Neo is organized along three segments: Magnequench, Chemicals & Oxides and Rare Metals. Neo is headquartered in Toronto, Ontario, Canada; with corporate offices in Greenwood Village, Colorado, US; Singapore; and Beijing, China. Neo operates globally with sales, research and development, and production across 10 countries, being Japan, China, Thailand, Estonia, Singapore, Germany, United Kingdom, Canada, United States, and South Korea.

To learn more about Neo Performance Materials Inc., click here

Disclaimer: Neo Performance Materials Inc. is an advertorial member of InvestorIntel Corp.

This interview, which was produced by InvestorIntel Corp., (IIC), does not contain, nor does it purport to contain, a summary of all the material information concerning the “Company” being interviewed. IIC offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This presentation may contain “forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking statements are based on the opinions and assumptions of the management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Prospective investors are urged to review the Company’s profile on Sedar.com and to carry out independent investigations in order to determine their interest in investing in the Company.

If you have any questions surrounding the content of this interview, please contact us at +1 416 792 8228 and/or email us direct at info@investorintel.com.




The Central Processing of Critical Metals, an Idea Whose Time Has Come

If individual nations and politically aligned regions are to achieve self-sufficiency and security of supply, as soon as possible, for the critical metals necessary for their defense and consumer economies, then the most efficient use of time and money in pursuit of these objectives is of paramount importance and duplications of effort are to be avoided at all costs.

This means that the central processing of the beneficiated ores and scraps containing recoverable quantities of the desired critical metals is the best solution to avoid the paramount deficiency in the downstream processing of critical materials into customer-specified end-use forms; the lack of educated, experienced, and demonstrably skilled chemical and metallurgical engineers specialized in hydro-, pyro-, metallurgical, and manufacturing engineering, whose training and opportunities for experience in the West have been scaled down dramatically since the politicians in the West failed to adopt an industrial policy to maintain not only secure supplies of critical materials, but also of critical skills.

Dr. Chris Haase, the former Director of the Critical Materials Institute of the U.S. Department of Energy recently spoke with me about this topic, and he said that “the resulting [political] weakness of the US natural resources industry has caused a significant decline in the number of newly trained mining, metallurgical, and extractive metallurgical engineers in the US.”  He added that “Recent data show that the United States graduates fewer than 207 hydrometallurgical engineers annually. Hydrometallurgy is a combination of multiple functional specialties that target the recovery of metals from their ores and scraps using fluid-based processes, by applying multiple processing steps involving physical, chemical, and sometimes electrical processes that include beneficiation, dissolution, and concentration that allows the separation, purification, and refining of finished metal and alloys. Achieving economically and environmentally sustainable operations requires a confluence of skills and expertise to deliver value at scale.”

“Unfortunately,” he added, “the closure and/or sales of major US mining corporations in the 1970s and 80s resulted in the closures of nearly all corporate mining and extractive research and development labs. The closure of the US Bureau of Mines in 1996 and the transfer of its accountabilities to the US Geological Survey and the US Environmental Protection Agency further bifurcated and balkanized US hydrometallurgical research, development, and advisory capabilities. The remaining US know-how and technical capabilities reside primarily in [just] a handful of select mining universities (e.g., Colorado School of Mines, New Mexico Institute of Mining & Technology, South Dakota School of Mines, University of Idaho School of Mines), US National labs (e.g., Oak Ridge National Labs, Idaho National Labs, Ames Lab), and largely retired, nationally recognized experts with industrial experience.

Because hydrometallurgical processing and technology are essential for the production of critical materials necessary to deliver a future clean energy transition and to support strategic (i.e., military and high technology) supply chains as well as the vastly larger consumer industries it is of vital national importance to preserve, advance, and champion the hydrometallurgical discipline, capabilities, know-how, and technology research and development necessary to support US competitiveness.” It is also extremely necessary to conserve these critical skills.

The best way to restore American self-sufficiency and security of supply of critical natural resources is to consolidate and thereby maximize the efficient use of America’s legacy skills in mineral resource exploration, processing, and the mass production of useful forms of the natural resources by minimizing government involvement where it, government, has the least skills. These areas include finance and non-health and safety regulations.

Left on its own, the American minerals industry maximizes the efficient use of capital, because capitalism is unforgiving of its inefficient use.

Left on their own the best managers in the natural resource industries have come to the conclusion the dwindling skill reserves of the American natural resource industry mandate the creation of central processing facilities where the large variety of ores, scraps, and residues for various non-fuel minerals of critical metals can be preprocessed to prepare feedstocks for further processing into useful forms by the most efficient technologies the cost and capacity of which is not prohibited by insufficient feedstocks. This is exactly what China is now doing in the rare earths’ space!

An American industrial policy would encourage the financing of centralized toll processing, minimize non health regulation and permitting, and otherwise get out of the way. Successful clean energy policies must be result-oriented, and reality-based, not just policy statements. The research and development of clean energy nonfuel minerals integrated processing technologies must be encouraged both at universities and at the industrial level. This is how the U.S. Defense Department procurement has always operated. The technological spinoffs of their work underpin today’s global consumer as well as defense technologies.

Only an industrial policy, the success of which is judged by performance to objective, not the enrichment of governing cronies, can save the USA from second class status in a world where nations with such policies are already succeeding beyond the dreams of the senescent “progressive” capitalism being preached in the United States.

During World War II, capitalism with American characteristics gave the world the richest, most powerful, most opportunity-laden for all, nation in mankind’s history.

It’s time to revive that spirit.




Jack Lifton with Belinda Labatte of Lomiko Metals on Canada’s growing EV industry and the competitive advantages of the Quebec graphite industry

Jack Lifton interviews CEO and Director Belinda Labatte on an update on Lomiko Metals Inc. (TSXV: LMR | OTCQB: LMRMF). In this compelling conversation with Jack, Belinda participates in a discussion on not only Canada’s vision for the competitive development of an EV supply chain, but the competitive advantages of the Quebec graphite industry.

In this InvestorIntel interview, which may also be viewed on YouTube (click here to subscribe to the InvestorIntel Channel), Belinda Labatte pointed out the fragility of the present graphite supply chain in North America given that “100% of the processing of graphite occurs in China and about 90% of the material comes from China.” Highlighting the huge demand for graphite in Quebec and the rest of North America, Belinda went on to also provide an update on Lomiko’s UL ECOLOGO® certification for mineral exploration to validate Lomiko’s responsible business practices.

To watch the full interview, click here

About Lomiko Metals Inc.

Lomiko Metals has a new vision and a new strategy in new energy. Lomiko represents a company with purpose: a people-first company where we can manifest a world of abundant renewable energy with Canadian and Quebec critical minerals for a solution in North America. Our goal is to create a new energy future in Canada where we will grow the critical minerals workforce, become a valued partner and neighbour with the communities in which we operate, and provide a secure and responsibly sourced supply of critical minerals.

The Company holds a 100% interest in its La Loutre graphite development in southern Quebec. The La Loutre project site is located within the Kitigan Zibi Anishinabeg (KZA) First Nations territory. The KZA First Nations are part of the Algonquin Nation and the KZA territory is situated within the Outaouais and Laurentides regions.​ Located 180 kilometres northwest of Montreal, the property consists of 1 large, continuous block with 48 minerals claims totaling 2,867 hectares (28.7km2). Lomiko Metals published a Preliminary Economic Assessment (“PEA”) on September 10, 2021 which indicated the project had a 15-year mine life producing per year 100,000 tonnes of the graphite concentrate at 95%Cg or a total of 1.5Mt of the graphite concentrate. This report was prepared as National Instrument 43-101 Technical Report for Lomiko Metals Inc. by Ausenco Engineering Canada Inc., Hemmera Envirochem Inc., Moose Mountain Technical Services, and Metpro Management Inc., collectively the Report Authors. The Bourier project site is located near Nemaska Lithium and Critical Elements south-east of the Eeyou Istchee James Bay territory in Quebec which consists of 203 claims, for a total ground position of 10,252.20 hectares (102.52 km2), in Canada’s lithium triangle near the James Bay region of Quebec that has historically housed lithium deposits and mineralization trends.

To learn more about Lomiko Metals Inc., click here

Disclaimer: Lomiko Metals Inc. is an advertorial member of InvestorIntel Corp.

This interview, which was produced by InvestorIntel Corp., (IIC), does not contain, nor does it purport to contain, a summary of all the material information concerning the “Company” being interviewed. IIC offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This presentation may contain “forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking statements are based on the opinions and assumptions of the management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Prospective investors are urged to review the Company’s profile on Sedar.com and to carry out independent investigations in order to determine their interest in investing in the Company.

If you have any questions surrounding the content of this interview, please contact us at +1 416 792 8228 and/or email us direct at info@investorintel.com.




How the demand for Critical Materials for consumer goods has already made China the center of the Earth.

“The war is over – we lost. We lost on securing a domestic supply of technology metals. Now all we can do is line up for our supply.” — Jack Lifton on Now that we already live in a Sinocentric World of sourcing and processing Critical Metals and Materials, What comes next?

In just the last 25 years, one generation of mankind, China has rapidly achieved domestic security of the supply of the critical industrial metals and materials, through a carefully designed and rigidly enforced industrial policy, that took first the British Empire and then the United States more than a century to achieve through the globalization of market capitalism. The original critical metals were those necessary for the first of the industrial revolutions based on fossil fueled steam power to mine, refine, and fabricate iron (steel), copper, and finally aluminum. The processing of each of which either depended on the ready availability of fossil fuel generated electricity right at first or came to develop that dependence later on.

Now this same category, critical metals and materials, has since World War II, been expanded globally to include those metals and materials the electronic properties of which enable our technological consumer society, i.e., the Technology Metals. China has now become the first nation-state to complete its total security of supply for the technology metals critical for the current, second, industrial revolution based on the development and supply of technology-based mass-produced consumer goods.

It, China, is now embarking upon expanding the uses of its secure supply of technology metals to execute an industrial policy  designed to propel China into and then to dominate the second consumer-industrial revolution, that is based not just on the processing of technology metals’ sources into end-user ready forms, but also in the engineering and  manufacturing of high technology consumer goods, which is today still dominated by the US as it has been from the time of the second world war to the present  and was at first, driven by spin-offs from government paid military R&D until President Nixon shut down the space shuttle program in 1971. After that the US consumer products industry depended mainly on self-financed R&D except for military technologies.

China’s move towards dominance in the mass production of consumer technology-based goods is being built upon economic, not military, competition. As such, it is misunderstood, by the self-described techno-elites of the West and is couched by them in terms of competing with the Chinese military buildup in order to dedicate the huge sums paid in the West by governments for the production of high-tech weaponry that actually uses just a small proportion of the critical technology metals. The American and European civilian OEM automotive industry, for example, easily uses 10 times as much of rare earth permanent magnets today as the combined militaries of those nations and regions. Yet the lack of governmental support for a secure supply of those magnets has allowed China, whose government does support the rare earth permanent magnet manufacturing industry, to dominate that industry through sheer volume manufacturing experience primarily for consumer goods, the sale of which into the massive domestic Chinese consumer products markets has already overtaken the size of the export markets.

China became the world’s largest producer of steel in the aughties and aluminum and copper soon after. By 2007 it had surpassed the United States in the production of steel, aluminum, and copper. The United States, which in 1947 produced half of the world’s structural metals gave up that title to China before 2010 even though China at that time had only been mass producing and processing structural metals for less than 20 years. In 1980 the US produced 60% of the world’s rare earths and rare earth enabled products. By 2010 China produced essentially 100% of the world’s rare earths and of rare earth enabled products.

Even as recently as 2010 China produced not any domestically designed or engineered military goods requiring large amounts of rare earth permanent magnets. Today it is likely that Chinese domestic demand for rare earth enabled products for its military equals or exceeds that of the US military. China today has the largest army and navy of any country, and its air force is flying less Russian and more Chinese designed and built jet fighters and bombers as well as rocket weapons and rocket vehicles designed and used for space operations including China’s first manned orbital lab.

China today imports or mines all of the technology metals it needs to process into end user ready forms of military and consumer technology goods for its home and export markets. The US and Europe in sharp contrast are increasinglyreliant on China for more than half of all the technology enabled consumer goods consumed in their home markets.

China’s future policies are outlined in its China 2025 plan, which is a list of 10 technologies that China plans to be self-reliant upon domestically by 2025. The same list might be called by Historians How the West Lost to China’s Technologies Dominance by 2025 List.

So long as there is not a well-planned and well executed policy to continue Western advantage in high tech consume and military technologies China will continue to advance as an economic competitor to the USA and Europe.

If and when commodity raw materials, both fuel and non-fuel, can be bought with Chinese Yuan, the exorbitant advantage to the US of being the world’s reserve currency will evaporate along with its technological dominance in the consumer markets of the world.

The Saudi’s negotiating with China to create a Petro-Yuan should worry the USA more than the current war in Eastern Europe. Russian raw materials that can be bought with Yuan that can be used to buy everything and anything that Russia needs for its consumer or military industries create far more of a threat to the USA and Europe than the Russian military and would relieve Russia or any other Chinese ally of worry about “sanctions’ by Western banks and governments relying on dollar reserves,

The stupidity of US and European governments emphasizing diversity, inclusion, and equity over cheap energy, energy independence and security of critical and non-fuel mineral supplies is an abject surrender to the lowest common denominators, elites in bubbles and ignorance of geopolitics.

If nothing changes then by 2030 we in the West will be dependent for our economic strength on just what the Chinese will let us have in terms of critical fuel and non fuel mineral supplies. And China will set the prices for those commodities.

Choose your elected officials and your investments wisely. Due diligence is rapidly being replaced by Deep doo-doo…