Brazil’s rare earths mystery solved and predictions – not all dire – about Molycorp
May 16, 2014 — Tracy Weslosky, Editor-in-Chief and Publisher of InvestorIntel and Jack Lifton, Founding Principal of Technology Metals Research, LLC. talk about rare earths in Brazil. And what better occasion to do this, given that Jack is in Brazil where he gave a presentation at SIMEXMIN in Belo Horizonte (May 11-14), the most important mining conference in Brazil – and perhaps South America. The timely topic comes during a rather temperamental period for the markets. Jack says he spoke at length with a Brazilian who owns a large ionic absorption clay deposit, which is very rich in heavy rare earths (HREE) and who wants to find the most efficient method of extracting some of these HREE’s from the mineral.
Jack points to the ‘burning’ question that everyone always points out when it comes to Brazilian rare earths: is it really producing 2,500 tons a year? Nobody seems to know where it comes from. Well, jack says he has found out. Indeed, the ‘culprit’ is Brazil’s very own Industrias Nucleares do Brasil (INB – The national Uranium Company), which “for years, as a by-product of their mining, they have been producing rare earths in tailings and then they send them out of the country for processing.” Jack says, he was not told where they send them; but, it is true then, Brazil has been doing this for about 40 years. However, in Brazil, the processed rare earth products are only used in the oil refining industry for fluid cracking catalysts. Brazil, too, as just about everyone else, has to import phosphors and magnets from Chinese and Japanese suppliers. Nevertheless, there is a mantra in Brazil that says: Brazil must be self sufficient. There are deposits and some are owned by Canadian companies such as the one with the clay deposit.
Tracy brings the discussion back to North America where Molycorp’s stock continues along its nose dive, bringing all the other rare earth companies down with it. More than that, says Tracy, Molycorp’s management has not released any PR to challenge the market’s attack in order to prove that the Company still has something to offer. Tracy believes that Molycorp may still make it because of all that is at stake from management to the investors involved. Jack is less optimistic but even he is not ready to dismiss Molycorp just yet. He blames Molycorp’s problems on the fact that it never bought into a heavy rare earth resource and suggests that it still has time to do so and save itself. Jack is also surprised that nobody even talks about Molycorp any longer, not in Brazil and not in China, stressing that the markets for the others “are independent of what Molycorp – or Lynas – does”…the above are excerpts from the weekly InvestorIntelReport video recorded for members only. To receive or see this video, please log-in to InvestorIntelReport, or subscribe by clicking here.