The Hip Bone is Connected to the Lithium Bone
After a lifetime of sports, MyLovelyLady recently had hip replacement surgery. That’s not a big deal – according to the Canadian Joint Replacement Registry there were roughly 49,000 hip replacements in Canada in a 12 month period over 2013 – 14. What is a big deal is that she was walking up stairs the day after a full hip replacement.
Anyone who has lived through a hip replacement is no doubt reading that and saying “no way”. But it is absolutely 100% true. With a shoulder to lean on and a prescribed narcotic, she was able to gingerly step up and down a 14 step flight of stairs, the day after a full hip replacement.
Cycles of technology.
If you’re squeamish, don’t read this. A traditional hip replacement requires the surgeon to slice open the thigh muscles on the outside of the thigh, from just below the hip bone to somewhere above the knee, doing considerable trauma to the muscles, tendons, ligaments, and other tissues in the leg. I squirm just writing that. The surgical damage to the muscle takes months to heal, which is why the traditional recipient can’t do stairs or any kind of bending for a lengthy painful period. It is a severe lifestyle impingement.
MyLovelyLady underwent a Direct Anterior technique, which is a major advance in technology. Or more accurately, it’s a major advance in the process.
The artificial hip joint is the same as used in the traditional method. It’s the same raw material used by the surgeon. What’s different is the technique: the surgeon goes in through a smaller incision inside the hip. This path means the large thigh muscles are avoided. Voila! The patient’s muscle is not cut, so the patient can use the thigh (albeit painfully). The knee can be bent, the muscles can be used, there is less trauma, less swelling, faster recovery, less risk of infection. Hence the stair walking.
What I find curious about this is that the joint is the same artificial joint as used in the traditional more invasive method. It’s the same “thing”. It’s the process that makes the surgery better, the way it’s done that improves the final product.
This advance in process is relevant to the rare earth market today. Just like it’s the same joint used in each approach, the rare earths in the ground are the same rare earth minerals around the world – lithium in China is still #3 on the periodic table, as it is in the rest of the world. Beryllium, vanadian, scandium, the rest of the odd iums, no matter where they are, they have the same charge and the same atomic number.
What’s different, though, is how they are being extracted. The process is different.
China is the undisputed heavyweight champion of the rare earth world. Depending on what numbers you believe, China controls between 90% and 98% of the world’s rare earth production. What logically flows from that is that China must control most of the world’s rare earth intellectual property and processes. That IP is jealously defended. I am unaware of China licencing that IP to anyone.
That means for companies outside of China to economically extract their rare earths from their deposits, they must either re-invent the Chinese methodology or create their own.
We’ve earlier looked at lithium’s prominence as the positive electrode of choice for the electrical vehicle industry. The problem is, assuming Tesla Motors can even come close to what it wants to do, the current lithium extractive processes cannot process enough lithium to satisfy that demand.
The traditional method of lithium processing is to let nature do most of the work, over a number of years. The traditional process relies upon brine being pumped from underground aquifers, through a series of evaporation ponds to increase the concentration, and then the fluid is pumped into a pond for natural evaporation. The speed of evaporation is dictated by uncontrollable solar and wind factors. While this extraction process is simple and low cost, it is also highly inefficient, time consuming and mostly uncontrollable. You can’t make the sun shine or the wind blow.
These traditional inefficiencies mean there will be fortunes made by the company that creates a new approach to extract and process lithium.
I’ve talked to the people at Nemaska Lithium (TSXV: NMX | OTCQX: NMKEF) – they’re excited not only about their lithium deposit but their ideas (see MOU deal signed this AM with Johnson Mathey, click here).
Likewise at Pure Energy Minerals Ltd. of Vancouver (TSXV: PE) – Pure Energy has a lithium deposit in Clayton Valley, Nevada, but what gets management really excited is its development of an innovative, sustainable and enhanced lithium extraction process.
The same goes for our friends down under at Neometals. While the deposits are geologically prospective, there is more buzz around the process.
The list goes on, through scandium and vanadium and even graphite. Companies in those spaces tout their processes as much as they do their actual deposits.
How to benefit from this? Do your research (like we did before the surgery). Find a competent management team (thank you to the wonderful team at London Health Sciences). And decide on the process (or processes)that you think gives you the best chance of success. Decrease the risk. A healthier portfolio will be the result.
Mr. Clausi is an experienced investment banker, executive, director and shareholder activist. A graduate of Osgoode Hall Law School called to Ontario's bar in 1990, ... <Read more about Peter Clausi>