EDITOR: | September 3rd, 2015 | 11 Comments

Lifton on the collapse of rare earth prices in China and Neo Materials’ survival

| September 03, 2015 | 11 Comments
image_pdfimage_print

September 3, 2015 — In a special InvestorIntel interview, Publisher Tracy Weslosky speaks with Jack Lifton, Sr. Editor for InvestorIntel about the collapse of rare earth prices in China and the impact on the rare earth markets. He also explains what really happened with Molycorp and why Neo Material Technologies still has a pulse. He then explains how at the Global Technology Metals Market summit on October 14th he will be presenting his thoughts on “The impact of China’s economic turmoil upon the technology metals supply chains and how to lessen the impact in the future.” He clarifies that he will be addressing the problems, identifying the hurdles and concluding with real solutions for the entire supply chain of technology metals.

Tracy Weslosky: What’s happening with Molycorp and what is your conclusion as Robin Bromby’s latest piece suggest that this is an absolute catastrophe for our market sector. Do you agree?

Jack Lifton: It’s not good news for the market sector because so many people have focused on only Molycorp. I haven’t made a secret of the fact that I thought their business model was flawed from the first day in that they were focusing on producing the least desirable sector of the rare earths, for the most part, of any light rare earth deposit. 75% or 80% is cerium and lanthanum, which currently are the least valued rare earths in volume production. The fact is the Molycorp mine has only 11% or 12% of neodymium and praseodymium, the magnet metals. Compare it with Lynas at 23% or I think that Peak Resources might even have a higher percentage than that. There are many deposits that have a better percentage. The Molycorp situation was that it was high-grade and high hype, but it was really just a part of the solution. The solution is the total supply chain and always has been. It was not a good idea. It failed. It’s not a surprise that when it’s not a good idea – it fails. I think that last year’s contribution of Molycorp to the global rare earths market was basically unimportant. I accept the fact that it is a sad day for shareholders of Molycorp who were long-term shareholders. They’ve lost all the value, but in general this has been like a rock thrown in the ocean. The ripples have long ago settled. Molycorp’s disappearance is of no particular impact on the genuine rare earth market.

Tracy Weslosky: Before we leave the Molycorp topic, let’s talk about Neo Material Technologies.

Jack Lifton: Well, I don’t know what’s happening with the ownership, but Neo Material hasn’t missed a beat in 10 years. Neo Material never depended on the Mountain Pass Mine for raw materials. It’s always been able to buy raw material in China at much lower prices. In my opinion, if they took anything from Molycorp, California, it was for political purposes in their own company’s bureaucracy. If Neo survives it’ll be just fine. It’s a well-managed, well-run company and it’s doing the right thing.

Tracy Weslosky: Our headline from Hongpo this morning was the collapse of the rare earth prices in China. I keep reading about the collapse of rare earth prices but I think these are all overstatements. You’re the senior expert here between the two of us. Jack, do we have a collapse of the Chinese rare earth prices? …click here, to access the rest of this interview


InvestorIntel

Editor:

InvestorIntel is a trusted source of reliable information at the forefront of emerging markets that brings investment opportunities to discerning investors.


Copyright © 2017 InvestorIntel Corp. All rights reserved. More & Disclaimer »


Comments

  • Jeff Thompson

    The development of scandium markets is an exciting topic and I look forward to learning more about the companies whose deposits include economically significant amounts.

    September 3, 2015 - 9:17 PM

  • Robert Richardson

    Well said Jack, because years ago I thought Nick Curtis’s strategic plan for the ‘world’s largest RE processing plant’ in Kuantan Malaysia was to provide a long term supply of the more valuable magnet materials under ‘Rare Earths Direct’ quality assurance, now finally coming to fruition. The last step will presumably be final element processing under direct company control.
    As you say:
    “….The fact is the Molycorp mine has only 11% or 12% of neodymium and praseodymium, the magnet metals. Compare it with Lynas at 23% or I think that Peak Resources might even have a higher percentage than that. There are many deposits that have a better percentage. The Molycorp situation was that it was high-grade and high hype, but it was really just a part of the solution. The solution is the total supply chain and always has been.”

    September 4, 2015 - 2:51 AM

  • Tim Ainsworth

    Jack, TMR reports the following:

    Mt Weld CLD: NdPr 23.29% – TREO 9.73%

    Mt Weld Duncan: NdPr 22.64% – TREO 4.84%

    Peak Ngualla: NdPr 21.11% – TREO 4.19%

    Mt Pass: NdPr 16.3% – TREO 6.57%

    Moly’s biggest mistakes were scaling a humongous plant they just couldn’t get operational and marketing to the stock market rather than the RE market. The later quite probably influenced the former, an attempt to vindicate the “mine to magnet” story line.

    Ironically Lynas now targeting the US autocat market and will no doubt try and chew off some of the 4ktpa La China exporting into US FCC.

    There will not be a RE industry period without viable LRE production and NdPr very much has an economic ceiling, Siemens & others put it circa $75/80kg.

    “Viable” probably translates to “survival of the fittest”, in practice, not on paper.

    September 4, 2015 - 5:07 AM

  • Harry

    Tim you need to look at what will be produced

    Peak Resources is that far in front of Lynas in terms of what will be produced it makes Lynas look second rate.

    Peak Resources have developed a process to remove 80% of the Cerium early in the metallurgy process. This transforms their project economics.

    Good luck with Lynas.

    September 4, 2015 - 6:24 AM

  • Jack Lifton

    ALL,

    It is NOT just the amount of Nd/Pr in a deposit that can be counted as output!!! The output VERY MUCH depends on the efficiency of the extractive metallurgy and then again by the efficiency of the separation technology!
    Just to list percentages of Nd/Pr and TREOs is very misleading.
    For example if a pre-separation process used by Peak removes just 80% of the cerium then it is not as good as the process used by RER that removes essentially 98%+ of the cerium and lanthanum prior to separation processing. And please tell me what percentage recovery that Peak gets from ore beneficiation and extraction? As I recall Molycorp’s number in that department was around 70%, so right away the effective TREOs are much closer to 4% than 7%. And so on and so forth.
    Please be cautious when throwing around raw analytical overall numbers.
    The simple metrics are very misleading!

    September 4, 2015 - 7:19 AM

  • Tracy Weslosky

    We have a very good interview with George Putnam of Scandium International being published on Tuesday AM — because we are all bull on scandium at InvestorIntel. Great interview as always Jack, thank you….and I can NOT wait until your keynote speech at the Global Technology Metals Market summit on Wednesday, October 14th in Toronto at the King Edward Hotel.

    September 4, 2015 - 8:44 AM

  • Steve Mackowski

    Jack – I have always liked your statement: It’s the whole supply chain that needs to be focussed upon not the mine. I would like to pose a related panel question for the upcoming conference.
    Why are Chinese separation plants limited in size to only 5,000 tpa maximum? When someone can answer this question, you can understand that they know their stuff.

    September 4, 2015 - 10:00 PM

  • Tim Ainsworth

    Harry, do you honestly believe Ce discard comes without a cost?

    But if you want to play those games take a look at Duncan ex Ce: 5ktpa La, 5ktpa NdPr, 300tpa Dy, etc:

    lynascorp.com/Announcements/2012/Duncan_Update_Clean_FINAL_140612_1119182.pdf

    It’s sitting there, in the middle of established infrastructure, 1000km from inputs & port. Do you honestly think it will just sit dormant if a viable process, AND market demand, develop?

    Bemusing pundits believe the catalyst business (maybe 60% RE market by volume) will simply be free carried to the grave by magnetics. Autocat & FCC ain’t dead yet, and the price/growth threshold for NdPr most likely enforce some economic reality sooner rather than later.

    September 6, 2015 - 6:27 AM

  • Harry

    Tim, i am really starting to question your knowledge of this company, I can’t believe you are still adamant that Duncan would soon be developed.

    In 2012 Lynas scoped out developing the Duncan Reserve which revealed:

    http://myresources.com.au/news/17-othernews/5663-lynas-looks-to-duncan-deposit

    the scoping study suggested it would cost about $600 million and take four years to develop

    here’s a link to the survey:- http://www.asx.com.au/asxpdf/20120614/pdf/426thwlcrr5l02.pdf

    perhaps they are busy lining up Japan Oil, Gas, and Metals National Corporation – (JOGMEC) for another $600M interest free loan on the never-never. Nothing would surprise me now, after the most recent debt deal / restructure.

    God luck with your Lynas investment

    September 7, 2015 - 5:06 AM

  • Tim Ainsworth

    Not much to get excited about but first little uptick for RE prices as reported by: ac-rei.org.cn/portal.php

    After a straight fall from June 150 to flat lining 108.8 for couple of weeks the index just nudged up to 109.2 on slightly stronger NdPr:
    ac-rei.org.cn/portal.php?mod=view&aid=3941

    Hopefully the start of some price/demand recovery. If so will be interesting to observe the proportional recovery across the suite.

    September 7, 2015 - 7:41 AM

  • Tim Ainsworth

    Lol Harry, your links are ancient history.

    Do you honestly think PEK have discovered a magic Ce genie way out there in the desert?

    BASIC LRE processing is more than a handful, as we have witnessed, with Moly failing despite 50 odd years prior experience, and of course promising $2.77kg CoP.

    Lynas totally focused on recoveries & product quality ATM, an operating business rather than one on paper, way up the practical learning curve from any ROW LRE peer.

    September 8, 2015 - 8:13 AM

Leave a Reply

Your email address will not be published. Required fields are marked *