EDITOR: | July 23rd, 2019 | 11 Comments

Trump amends Defense Production Act for Rare Earths

| July 23, 2019 | 11 Comments
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My first email this morning read “Game changer!” and included a link to the Presidential Determination Pursuant to Section 303 of the Defense Production Act of 1950, as amended. It reads, on July 22, 2019, US President Donald Trump stated: “By the authority vested in me as President by the Constitution and the laws of the United States of America, including section 303 of the Defense Production Act of 1950, as amended (the “Act”) (50 U.S.C. 4533), I hereby determine, pursuant to section 303(a)(5) of the Act, that the domestic production capability for Rare Earth Metals and Alloys is essential to the national defense.

Without Presidential action under section 303 of the Act, United States industry cannot reasonably be expected to provide the production capability for Rare Earth Metals and Alloys adequately and in a timely manner. Further, purchases, purchase commitments, or other action pursuant to section 303 of the Act are the most cost-effective, expedient, and practical alternative method for meeting the need for this critical capability.”

Having seen the undeniable increase in interest in rare earths as of late, we published a historical overview of the market yesterday titled The U.S. rare earths saga continues… The intent was to highlight how a similar series of events created a most memorable boom to bust cycle from 2010-2014.

This memo should provide a great short-term boost to the rare earths sector as well as a confidence boost for investors in the rare earths sector, which we will be covering. We presently cover regularly the following companies that are leaders in this sector:


Tracy Weslosky

Editor:

Tracy Weslosky is the CEO for InvestorIntel Corp. and founder of InvestorIntel.com, a trusted source of online market information for investors in the capital markets, ... <Read more about Tracy Weslosky>


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Comments

  • Jack Lifton

    Ordering someone to do something is not the same as telling them how to do it. That’s the real problem.

    July 23, 2019 - 4:45 PM

    • Jim

      Spot on as alwasy. It is a Sorry state of affairs when it takes over a decade for some to state the obvious: we have no value chain…!!!!!! Most observers and ‘experts’ have wasted the decade promoting mining project that would only feed China.

      July 24, 2019 - 7:57 PM

      • thomas melillo

        Take a look at what it took for China to get where it is with their REE’s . They flooded hundreds if not thousands of acres of farmland for open pit mining which poisoned for hundreds of years for a $, in which a few years from now the Yellow River whereby the poison sludge leftover will be contaminated and will not even be safe to bath and forget about drinking. It a good thing we will be starting scratch if we learn from an enemy who we once considered a friend.

        July 25, 2019 - 8:20 PM

  • Joe O

    Jack what would be your top separation technolgy? You used to think MRT was a “game changer” (no I am not getting into a ucore discussion) what/who else do you think would be out there? Are you still on the LEXI board? How would trump be able to tell them how to do it? Juniors should have an idea how to go forward I see no harm from trump in this instance (not a fan of his) trying to move it forward

    July 23, 2019 - 5:45 PM

    • Jack P Lifton

      Donald Trump is doing the American rare earth “industry” a big favor. He is ordering the Defense Dept to solve the security of problem by repairing the domestic supply chain without regard to the profitability of its individual components. The US DoD, however, will never finance a mine, because it is too expensive and takes too long, and, in any case, is just the first step in a rare earth products’ supply chain. The US DoD has recently given a RIF, Rapid Innovation Fund, grant of 3 million dollars to Rare Earth Salts to demonstrate whether or not its technology, whatever it is, can be commercialized for the separation of individual rare earths from pregnant leach solutions of mixed rare earths. IBC Advanced Technology’s “MRT” has been demonstrated at pilot plant level, and K-Technology’s Continuous Ion Chromatography/Exchange has been shown to be able to separate some of the rare earths into individual high purity salts (This was the result of a specific contract issued by the DLA not due to any inability to separate all of the rare earths). I hope that both IBC and K-Tech will respond to the current RFI (Request for Information) by the DoD for rare earth separation technologies. The USA has today no commercial rare earth metal making venture, nor any operating rare earth permanent magnet alloy maker. Some samarium cobalt magnets are made by alloying in the USA. but the samarium metal is Chinese in origin. To the best of my knowledge no one in the USA is commercially sintering neodymium iron boron powder (from China) into magnet forms. Individually the supply chain component ventures, mining, separating, metal making, alloy making, magnet making are too small to be profitable on their own. Also, none of them would be large enough to support ALL of the others through distributed costs to make the core entity profitable against current Chinese pricing. The DoD has two challenges to hurdle: 1. It must select a champion company for each of the supply chain components, and 2. It must SUBSIDIZE the assembled system. I don’t know if it will happen.

      July 23, 2019 - 6:09 PM

      • Tracy

        Jack – It is a pleasure to see your words on ii again, welcome. With regards to the processing of rare earths, I would like to remind everyone of Jon Blumenthal, President & CEO of Blueline in San Antonio, Texas who just made a deal with Lynas this year. Now it was my understanding that Blueline could separate — and I know that Greg Andrews, President & CEO of Search Minerals Inc. has Dr David Dreisinger on his team out of BC, with a project in Labrador and don’t they have a pilot plant?

        Thank you for reminding me of Rare Earth Salts. We are not aware of how this company is proceeding since the untimely and shocking passing from their founder Cameron Davies to whom we all miss. Alastair Neil who was heading up this division had endless experience in reviewing processing techniques and could provide us with a proper update.

        Let’s not rule out the prominent understanding of the market by Constantine Karayannopoulos, and of course IBC’s major shareholder — is this not Mark Smith? Everyone misses the reference to TRAXYS based in NYC that does several billion dollars a year in critical materials — we should ask Mark Christophe, as he would have an exceedingly good idea of what this means.

        Then of course we have many of the veterans from Molycorp — so I believe, I believe that there is more happening and that this surprise announcement happened to facilitate a deal that may have already been made.

        Tomorrow we are doing a piece on Don Bubar of Avalon Advanced Materials Inc. He introduced me to rare earths in 2008, Ian London, and of course — Jack Lifton.

        Now toss in some Christopher Ecclestone who has been following this industry with James Hedricks in depth knowledge of rare earths, and well — you have the top NA experts with the ‘real’ answers.

        July 23, 2019 - 7:24 PM

      • Tim Ainsworth

        Jack, just wondering if you have any knowledge of: https://eutectix.com/magnetic-materials/

        They certainly appear to claim the IP to take oxides to magnetic metals, capacity probably not so important ATM:

        “The Rare Earth Magnet Materials

        MMPA STANDARD No. 0100-00 Standard Specification for Permanent Magnet Materials classifies rare earth magnet materials in three families of materials. The standard cross references the MMPA grades to the IEC codes and identifies the R4 and R5 materials as:

        rare-earth cobalt 5 such as SmCo5, where the rare earth is typically samarium and less commonly a different light rare earth or mishmetal or even a heavy rare earth such as gadolinium or erbium for example. In these materials, the rare earth may range in weight typically about 34- 39%.

        rare earth 2 transition metal 17 group where cobalt, iron and copper are mixed and the rare earth is typically about 23-28% by weight.

        rare earth iron alloys such as Nd2Fe14B where the rare earth is about 30-35 weight percent and the balance is iron with addition of boron and other elements.

        Selection and Specification of Permanent Magnet Materials explains a methodology for selecting the best available grade for a given application.”

        On paper would seem a logical extension from Blueline HRE oxides, incl Sm, and I’m sure Lynas would match NdPr/NdO inputs. Magnet supply chain going to be a slow build but possibly another brick in the wall? At least this one appears partially built, to the point it perhaps could offer magnet metals just in time for next year’s election.

        But the far deeper issue was recently revealed by ACREI, of total Chinese magnet exports 2018 the US bought just 17% vs EU 52%, a staggering anomaly given US GDP ~10% larger 2018. Would appear the US much prefers its magnets already built into motors, components & finished products, and THAT will be a very difficult trend to reverse, as Hitachi has already discovered, and speaks to the last two points you made.

        Conversely it tells us the EU still likes making motors, to the point it appears to have become a hotbed of new design, high efficiency PMM, which has the Germans quietly progressing their own primary supply chain.

        July 23, 2019 - 8:22 PM

    • Tracy

      The game changer technology was just announced by ALKANE. See – Alkane’s disruptive technology to reduce metallization costs by +50% http://bit.ly/2Z0uJQW

      July 23, 2019 - 7:08 PM

  • Joe O

    Jack your thoughts and opinions are much appreciated!

    July 23, 2019 - 6:16 PM

  • William Firth

    There is another Australian Player Northern Minerals Ltd NMU who has their pilot plant operational and ready to upgrade with finance now available about to increase supply. Perfect position and timing. Very Interesting

    July 24, 2019 - 10:33 PM

  • Albert Marma

    Thanks for the information

    July 26, 2019 - 7:21 AM

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