EDITOR: | November 15th, 2013 | 10 Comments

Hong Kong event declares war between ‘lights’ and ‘heavies’ over?

| November 15, 2013 | 10 Comments
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Critical Rare Earths replace the age old ‘lights’ vs. ‘heavies’ debate in Hong Kong as Magnet Metals take center stage at this week’s 9th International Rare Earths Conference

Dysprosium-GoldSource from this week’s 9th International Rare Earths Conference in Hong Kong yesterday revealed to me that the fight between ‘lights’ and ‘heavies’ was effectively over and placed in a time-out by industry leaders and instead, was being replaced by a trendier tech metal term: ‘critical rare earths’.

What does this mean?

Seemingly the perception is that the greatest valued critical rare earths are focused on the new* brat pack of metals focused on magnets: Neodymium (Nd), Praseodymium (Pr), Dysprosium (Dy) and Terbium (Tb). And for those confused by what’s a light and what’s a heavy – Neodymium (Nd) and Praseodymium (Pr) are light rare earth elements or LREE’s or ‘lights’ and Dysprosium (Dy) and Terbium (Tb) are heavy rare earth elements or HREE’s or ‘heavies’.

When I started this site in January 2009, Gareth Hatch gave me more than one ‘discussion’ on why magnets were the backbone of this sector, suggesting to me that this week’s event were not a review of the ‘new*’ critical rare earths – but that we have come full circle and are back where we started before the rare earth bubble occurred – focused on the core of the industry, magnet metals. Having now gained a substantial appreciation on how magnets they are making today are now 150,000 times more powerful in the last 30 years, I am certain I will kick off Gareth’s Friday AM with properly with the best 3 words one can ever hear: ‘you were right’.

Apparently while the audience was smaller and discussions revolved around cash conservation this year, merger and acquisition opportunities, and of course end user agreements. My various sources indicated that some of our members that traditionally attend were not in attendance this year, and three of our clients who registered had other priorities and did not make it to Hong Kong leading me to believe that we may have some exciting news this next month, plus as we all know in the industry — the Chinese love putting out REE news in December. I reviewed the delegate list since instead of participating I was having an e-sweep of my office (using magnets of course) and indeed there were end users and magnet companies in attendance.

So for anyone in our audience that may not understand the magnetic metals — Nd, Pr, Dy and Tb play and as investors would like to understand how this works, allow me to take a few lines from our well-written REEHandbook.com and REEFacts.com sites written by industry expert James Hedrick to whom I owe a phone call.

Neodymium (Nd, LREE): Like the twins, Castor and Pollux, from Greek mythology who possessed special powers and strong bonds, so are neodymium and praseodymium, the elemental twins, which were difficult to separate and possess a multitude of special properties. Neodymium-iron-boron (Nd2Fe14B) high-strength permanent magnets are the strongest in the world. When switched to ‘vibrate’ mode, a miniature NdFeB magnet causes cell phones to vibrate when a call is received. In fact, a thumbnail size, high-strength NdFeB magnet is so strong that when placed on a refrigerator it cannot be removed by hand and high-end audio headphones and speakers use NdFeB magnets to accurately reproduce sound and base across a full spectrum.

Large resources of neodymium are contained in LREE-enriched minerals. Neodymium occurs in the Earth’s crust at an average concentration of 28 parts per million. The primary source of neodymium is from carbonatites and the LREE-mineral bastnäsite. Bastnäsite deposits in China and the United States constitute the largest percentage of the world’s rare-earth economic resources. Neodymium is also a major constituent in the LREE-mineral monazite which constitutes the second largest segment of rare-earth resources.

Dysprosium (Dy, HREE): A dysprosium additive to neodymium-iron-boron magnets increases the operating temperature range for use in hybrid and electric vehicles. Large resources of dysprosium in xenotime and monazite are available worldwide in ancient and recent placer deposits, uranium ores, and weathered clay deposits (ion-adsorption ore). It occurs in the Earth’s crust at an average concentration of 3 parts per million. Xenotime is enriched in dysprosium oxide and contains 8% to 9% of the rare-earth oxide (REO) content. Monazite-(Ce), which is more abundant in the Earth’s’ crust than xenotime, has dysprosium oxide contents of 0.2% to 0.9% of the REO content.

Praseodymium (Pr, LREE): The primary use of praseodymium is to combine it with neodymium magnets to increase their availability to supply growing demand for high-tech applications. Large resources of praseodymium are contained in LREE-enriched minerals. Praseodymium occurs in the Earth’s crust at an average concentration of 8 parts per million. The primary source of praseodymium is from carbonatites and the LREE-mineral bastnäsite. Bastnäsite deposits in China and the United States constitute the largest percentage of the world’s rare-earth economic resources. Praseodymium is also a major constituent in the LREE-mineral monazite which constitutes the second largest segment of rare-earth resources

Terbium (Tb, HREE): Terbium is an additive in neodymium-iron-boron (NdFeB) magnets in hybrid and electric vehicle motors allowing them to operate at high temperatures. Terbium is the first member of the heavy-group rare-earth elements (HREE). The naming of this element was like an elaborate “con” game. Large resources of terbium are contained in HREE-enriched minerals. Terbium occurs in the Earth’s crust at an average concentration of 0.9 parts per million. Large resources of terbium in monazite and xenotime are available worldwide in ancient and recent placer deposits, carbonatites, uranium ores, and weathered clay deposits (ion-adsorption ore).

Just for fun allow me to share my upcoming weekend’s activities with you….


Tracy Weslosky

Editor:

Tracy Weslosky is the CEO of InvestorIntel Corp., a company that publishes InvestorIntel.com. A leading source for investors, entrepreneurs and industry leaders alike, InvestorIntel is ... <Read more about Tracy Weslosky>


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Comments

  • Veritas Bob

    If Praseodymium is the poor man’s Neodymium (can be used in magnets (with or without Neodymium), but not quite as good as Neodymium), then why have Praseodymium prices risen above Neodymium this year? Are there some applications in which, leaving aside price, Praseodymium is preferred or Neodymium is not usable, for instance coloring applications, and is the value for use in coloring enough to drive its price above Neodymium? In recent previous years, Neodymium seemed to be priced at a premium to Praseodymium.

    November 15, 2013 - 10:29 AM

  • Gareth Hatch

    @Veritas Bob: praseodymium (Pr) is only used in combination with neodymium (Nd) in magnets, not on its own. It has a number of other uses, including pigments, ceramics and glass colorants, where the magnetic properties are irrelevant. I have heard from a number of sources that the recent spike in Pr prices is as a result of higher demand for Pr in one or two of these additional (non-magnet) applications. Nd is not a suitable substitute for Pr when the particular color that Pr produces, is required (same reason you can’t substitute certain rare earths for others in phosphors).

    November 15, 2013 - 11:20 AM

    • Tracy Weslosky

      Thanks Gareth – I was going to email you with VB’s question and see if your could assist with a qualified answer….figured you were on the GWMG webcast with the rest of us…

      November 15, 2013 - 11:40 AM

    • Veritas Bob

      Thanks Gareth, and thanks for going the extra km Tracy (yes, a km is less than a mile, but you are based in Canada after all, and under a crack mayor at that).

      November 15, 2013 - 12:22 PM

    • Joe

      Mr. Hatch,

      According to your TMR data that you have so nicely laid out for us, Steenskampskral has much more Nd and other CREE per ton of ore than any other mine. GWG also has the unique and established LCM as well as the lowest capex estimate with a pre-existent mine and a decent amount of cash. Could you please explain to a novice why GWG’s stock has been pummeled? Thanks in advance. Joe

      November 17, 2013 - 3:04 PM

      • Gareth Hatch

        Joe: I prefer to leave commentary on the merits and history of particular stocks to others.

        November 17, 2013 - 3:40 PM

        • Joe

          Ok, thanks for the response. Joe

          November 17, 2013 - 5:43 PM

  • James

    Look out for Stans Energy as the first Critical Rare Earths producer.

    November 15, 2013 - 7:45 PM

  • joe carbone

    Hi Tracy,

    would love to know which companies did not show up at the HK conference and your thoughts re what news may be around the corner.

    Any views on tow Aussie heavy rare eraths companies in Northern Mining and Hastings Rare Earths?

    Please email direct.

    Regards

    November 22, 2013 - 1:18 AM

    • Tracy Weslosky

      I was not able to attend due to the cyber attack on InvestorIntel. The sources I have all agreed that the audience was less robust than in consequent years and I was working off an attendance list which was sent to me that simply surprised me as several companies in the Top 15 of the REE Leaders Index were not present. In calling these companies they were heavily involved in business development and my conclusion on all of this was very positive. Presently the market valuation of REE public companies is not consistent with the dynamic business deals that I am hearing of occurring behind the scenes. Looking forward to a rather intriguing winter season, and my ‘instinct’ is that we should have some interesting announcements from the Chinese REE industry in December…we will see, as I certainly cannot forecast the future. Thanks for visiting InvestorIntel.

      November 22, 2013 - 8:36 AM

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