EDITOR: | August 1st, 2013 | 30 Comments

Jack Lifton says ‘worst is over’, rare earth recovery imminent

| August 01, 2013 | 30 Comments
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Lifton-JackAugust 1, 2013 — Tracy Weslosky, Publisher of InvestorIntel.com in an interview with Jack Lifton, Founding Principle of Technology Metals Research (TMR) discuss how the rare earth market has hit a bottom and the road to recovery. Jack starts “I think the prices have bottomed and I really think we are going to see them come back up now — because we have enough recovery, and we have the Chinese really straightening their act out. And so I think that the worst is really over.”

Jack Lifton is a Founding Principal of Technology Metals Research, LLC. He is also a consultant, author, and lecturer on the market fundamentals of the technology metals, the term that he coined to describe those strategic rare metals whose electronic properties make our technological society possible. These include the rare earths, lithium and most of the rare metals.


Tracy Weslosky

Editor:

Tracy Weslosky is the CEO of InvestorIntel Corp., a company formed to provide investor relations in 2001 that today now provides online media marketing, social ... <Read more about Tracy Weslosky>


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Comments

  • Ben-at-it

    This is the best interview I have ever seen Jack in! Love it.

    August 2, 2013 - 10:13 AM

  • aurelius

    If one cares to look closely at what Lifton has said over the last two years, he’ll find he’s a totally unreliable person. When it comes to Great Western, he changed his mind radically about eight months ago, due most likely for a personal conflict with the new management. Great Western was THE Co. that was going to lead the pack to, Great Western is on the wrong track. He has obviously no qualm about embarrassing himself and I hope Tracy will be there to interview him when Great Western proves him wrong. It’s also fair to remind the readers that Lifton is a paid consultant, and it is in that light his “expertise” should be evaluated.

    August 3, 2013 - 1:20 PM

    • Joseph

      I could not agree more.

      August 3, 2013 - 2:43 PM

      • Tracy Weslosky

        Aurelius, thank you for your comments as always. Please note that an interview is being coordinated with Marc Levier for the end of August and a thorough update on GWMG is forthcoming.

        The above interview I personally love. What can I say – Jack’s comment on REE recovery? Can we please just take a moment and be grateful as there are so many wonderful companies that are working hard to increase sustainability that we want to see them capitalized and supported towards their end goals.

        Cheers and thanks again for watching what I think is Jack’s best interview with me to-date! Tracy

        August 4, 2013 - 10:02 AM

        • aurelius

          Thanks Tracy. I look forward to your GWMG related interviews and articles.
          Just to let you know, many of us among the serious investors in that Co. are puzzled, and indeed very annoyed, at what is obviously manipulations on the TSX and pink sheet by some of the brokerage firms themselves, starting with TD Enterprises in particular. Also, rarely have I seen so much bashing on the Stockhouse boards by individuals who never seem to let go and are admittingly not investors themselves. Some of those bashers are indeed well informed, and one wonders what and who is behind this. It is obviously ill-intended. I am hoping that Great Western will be able, in the not-too-distant future, to list its shares on a different exchange less subject to this sort of abuse. As for John Lifton, I have already made my reservations known.
          In these circumstances, you can understand, I hope, why I am so edgy when it comes to hearing criticisms about a Co., which I firmly believe is on the right track, under LeVier, to become one of the big winner in this industry. With kind regards, bob

          August 5, 2013 - 9:26 AM

          • Tracy Weslosky

            Please send any data you have on these allegations to us for review. This is indeed a small industry and our goal is to widen the audience and our first objective is to be a source of information and debate. The challenge with REEs is that the data out there is constantly changing. For instance the evolution of metallurgical extraction processes emerging is a study unto itself.

            August 5, 2013 - 1:45 PM

  • hackenzac

    Evangelists with conspiracy theories lacking in objective reasoning and who engage in ad hominem attacks of analysts of the highest reputations who don’t deliver the message that they want to hear are NOT serious investors.

    August 5, 2013 - 11:30 AM

    • Tim Ainsworth

      Well said, irrespective of where you’re invested in the RE space it’s way past time for a little reality, a point Jack has been making for quite some time.

      August 5, 2013 - 11:38 AM

    • aurelius

      Perhaps if you had the honesty and the courage to tell us what name you write under on the Stock House blog, one could substantiate his claim more specifically.

      August 6, 2013 - 6:22 AM

  • truckdriver

    good point Jack, the Chinese need HREEs and they do have a JV with a company called Great Western Minerals. So how do you think that will work out? Could they not do the tolling through GQD in China? Their new man Marc Levier seems to know what he’s doing, he has significant international metallurgical and process engineering experience in moving new mining projects into production. He also has led multiple teams in the development of processes for base metals, industrial minerals and precious metals, so I have no doubt he will get it done .

    August 5, 2013 - 1:00 PM

    • Tim Ainsworth

      Any RE entering China for whatever purpose is then subject to Chinese export quotas, tariffs & taxes. LCM may as well just keep buying whatever it needs from China and forget about mining as I’d hate to think what the CoP would be on the 66% Ce & La vs sales value.

      August 5, 2013 - 5:06 PM

      • aurelius

        You are obviously ignorant of what GWG owns at Steens.

        August 6, 2013 - 6:24 AM

        • Tim Ainsworth

          Never been on SH but I have read GW’s Q1 report quite thoroughly. Will be interesting to see what progress has been made with the next Q report.

          August 6, 2013 - 7:21 AM

  • David Mortimer

    He says that China wants other countries to produce Rare Earths but you only have to look at a company like Stans Energy who purchased an REE in Kyrgyzstan in an open and fair auction and have come under attack by corrupt politicians who are working for a Chinese company who are trying to steal the mine for themselves .
    Us shareholders in Stans have been put through the ringer for the past year with court case after court case trying to stop stans energy who by the way have done some stellar work on the mine .

    August 7, 2013 - 8:00 AM

  • There is a positive story behind Molycorp's below expectation Q2InvestorIntel

    […] by REE experts Curtin University Professor Dudley Kingsnorth (and to some extent, with caveats, by Rare Earth industry consultant Jack Lifton) who have predicted that by 2020 REE demand will double from 110,000 tons to between 200,000 and […]

    August 8, 2013 - 8:10 PM

  • Aat Oskam
    August 10, 2013 - 7:11 AM

    • Veritas Bob

      Question for Jack Lifton regarding his statements in the article linked immediately above:

      Is there a chicken and egg problem between financing and buildout of HREE toll processing facility on the one hand, and financing and buildout of (non-Chinese) mines supplying HREE feedstock on the other hand? Can one side be financed and built without surety that the other side will be within an acceptable timeframe? If a mine and concentration plant is built, but then has to wait years for a toll processing facility to come online … or a toll processing facility is built, but then has to wait years for adequate supply of feedstock to process? And neither side controls the other, but their well being depends on the other side. Well, I suppose this may be part of what you have to wrestle with if you are to make Innovation Metals a viable reality, and yeah, you’re trying to develop some kind of arrangements for suppliers to buy capacity in the toll processing plant, etc.

      And who would want to become an HREE supplier facing a monopsony (single buyer for its product), in competition, so to speak, with other current or potential suppliers to that same monopsonist. The monopsonist could a) screw them over, b) not cut the mustard, or c) go belly up.

      August 10, 2013 - 12:10 PM

  • Bill Keenes

    Nice to see Jack be interviewed and not give plug a company he is being paid to consult for

    August 10, 2013 - 9:30 PM

    • Ben-at-it

      LOL – agreed.

      August 11, 2013 - 1:16 PM

  • Tim Ainsworth

    I’ll leave punters to do their own translation/interpretation but at this point you really have to wonder what the Chinese have done with Deng’s legacy: http://www.ac-rei.org.cn/portal.php?mod=view&aid=3503
    Perhaps Hongpo can share some enlightenment?

    June 5, 2015 - 6:51 AM

  • Dan

    Please dont ask Hongpo anything, every time he’s asked anything he predicts higher prices and then the floor drops out.

    June 5, 2015 - 9:07 AM

  • Tim Ainsworth

    Well VB, shouldn’t be too hard for you to work out to work out that a mine gate tax is going to take a little time to work thru the process system, particularly given the longer lead times with some elements.

    But Eco 1.01 for mug punters would suggest downstream (supposedly living hand to mouth ATM) would be stuffing their supply chain full of pre tax finished material in the interim.

    Why then have prices, particularly magnetics, fallen back to Jan lows over recent weeks? With reports of prices at or even below CoP, most particularly the most vaunted DyO?

    http://www.ac-rei.org.cn/portal.php?mod=view&aid=3502

    At the same time we have Chinese punters throwing money at the Big 6, at or near fresh highs, RNM rejoins the party after recent consolidation:

    https://au.finance.yahoo.com/q/bc;_ylt=As9fBF5mN8TtkMY0JgdbH.lWeI9G;_ylu=X3oDMTEzcjl1OTk5BHBvcwMyMgRzZWMDeWZpUXVvdGVzVGFibGUEc2xrA2NoYXJ0?s=600259.SS

    How can it be so?

    June 5, 2015 - 8:46 PM

  • Jack Lifton

    The global rare earth space has now finished the exploration phase. We have identified or already mine enough accessible, economically processable deposits of rare earths to supply the world’s demand for the foreseeable future. The current phase in which the global rare earth industry finds itself is one of rationalization. Clearly the world’s consumer manufacturing industry needs only the market-critical-rare earths, the MCREs, which now and for the next few years will be praseodymium, neodymium, terbium, dysprosium and yttrium. To this list may be added one or more of the heavy rare earths, the most likely of which (to be added) is ytterbium.
    The supply of MCREs is not sufficient to meet increased demand if prices remain where they are. Therefore the prices of the MCREs will have to increase in order to bring additional and new production on line.
    Since nearly 100% of the current demand for MCREs is met by current Chinese production this means that even China will have to pay more for those MCREs and that some will have to be produced outside of China. MCREs are not gold. They are utilitarian metals.
    There are those who expect the prices of the rare earths to skyrocket every time there is a political crisis and that the prices of shares of the juniors will skyrocket in lockstep. In fact very little of the rare earths are needed by the military and people do not hoard wind turbines or electric motors, so all this silly volatility of rare earth prices is just an attempt to pump and dump shares of juniors and inefficient producers.
    MCRE prices will have to go up or there will be no possibility of a return on capital (PROFIT) for any rare earth producers. Any questions?

    June 5, 2015 - 9:42 PM

  • Chris

    The ROW REE industry is totally reliant on Chinas ability to gain control of its own anarchic REE industry.
    Until that happens, REO prices will stay depressed and I just can’t see it happening in the foreseeable future IMO.

    Even if China gains some control over its REE industry and REO prices stabilise or increase slightly, no ROW producer will be able to compete using current, proven processing technologies.

    Doubtful any ROW companies will want to pay a substantial amount more compared to Chinese prices just for supply security.

    China is and always will be the benchmark and dominant player in the REE space.

    June 6, 2015 - 1:25 AM

    • Tracy Weslosky

      Chris – your going to love the next interview we publish this week from Jack. In this interview: he tells me what is really happening in China…stay tuned, and thanks for visiting InvestorIntel.

      June 6, 2015 - 2:13 PM

  • Tim Ainsworth

    So adore the “Land of the Free”, my post sitting in “moderation” for a day, sans problematic references:

    Well VB, shouldn’t be too hard for you to work out to work out that a mine gate tax is going to take a little time to work thru the process system, particularly given the longer lead times with some elements.

    But Eco 1.01 for mug punters would suggest downstream (supposedly living hand to mouth ATM) would be stuffing their supply chain full of pre tax finished material in the interim.

    Why then have prices, particularly magnetics, fallen back to Jan lows over recent weeks? With reports of prices at or even below CoP, most particularly the most vaunted DyO?

    *************************************************************

    At the same time we have Chinese punters throwing money at the Big 6, at or near fresh highs, RNM rejoins the party after recent consolidation:

    *************************************************************

    How can it be so?

    June 6, 2015 - 8:26 AM

    • Tracy Weslosky

      Tim. Comments get reviewed when they have too many links. This is due to the literally thousands of spam comments we receive a week, the software identifies comments with links as immediately suspicious. Your comment was approved.

      June 6, 2015 - 2:06 PM

  • Fred

    Over the short term and long term, I think that the classical economics of supply and demand prevails. For the medium term, I think that the Chinese characteristics of capitalism prevail, particularly for REEs.

    June 6, 2015 - 7:26 PM

  • chris

    Tim
    What about Chinas big problem with illegal REE market. How does a “mine gate tax” solve this issue?
    Unless the Chinese can substantially reduce the amount of REE’s being mined, processed and sold illegally, a “mine gate tax” will have little effect on REO prices IMO.

    The Chinese have failed to make any headwind in the fight against the REE black market to date and I believe it will only get worse with the introduction of the new tax system.

    June 6, 2015 - 8:06 PM

  • Tim Ainsworth

    As I understand it, the new value based mine gate tax is designed to distinguish “legitimate” concentrate via tax receipts tracked downstream. How it will work in practice remains a mystery to me, although clearly it will have a delayed impact, hopefully Jack will provide some clarity as per Tracy’s note.

    June 7, 2015 - 12:20 AM

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