EDITOR: | December 22nd, 2017 | 3 Comments

National Defense Authorization Act bolsters strategic mineral miners

| December 22, 2017 | 3 Comments
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Strategic minerals miners are contemplating a bright future in the wake of the signing of the 2018 National Defense Authorization Act by President Trump on December 12.

The Act features a number of initiatives of strategic importance to Ucore Rare Metals Inc. (TSXV: UCU | OTCQX: UURAF), including the authorization for $5 million in funding for the development of strategic materials technologies at the Army Research Laboratory (“ARL”) during the coming fiscal year.

The $5 million program is significant for all strategic metal miners as the funds have been set aside for the “development of improved manufacturing technology for separation, extraction, smelter, sintering, leaching, processing, beneficiation, or production of specialty metals such as lanthanide elements…” The lanthanide elements comprise the suite of metals more commonly referred to as rare earth elements (“rare earths”). As previously stated in a report by the Senate Armed Services Committee, this significant funding is allocated for domestic producers that the Department believes are likely to initiate commercial production of such materials within the next five years.

The initiative marks a novel nationalistic focus on rare earths, opposed the past laissez faire attitude toward rare earths, which eventually permitted China to dominate and control the global trade of rare earths. China has dominated the rare earth sector since its emergence in the 1970s as a source of strategic metals in a gamut of military high-tech applications, including for instance, radar technologies.

It is a smart move by Congress. Nowhere is the change from low-tech to high-tech applications more evident than in the military and more strategically dependent on critical minerals.

The U.S. is preeminent in its military capabilities because of its development of a vast array of high-tech materials and products capable of extraordinary performance. Aircraft, naval vessel, ground equipment, and personnel are computerized to an impressive degree. Each SSN-774 Virginia-class submarine requires approximately 9,200 pounds of rare earth metals, each DDG-51 Aegis destroyer requires approximately 5,200 pounds, and each F-35 Lightning II aircraft requires approximately 920 pounds. Structural materials in aircraft and surface vehicles including Navy craft are lighter, more corrosion resistant, operable at higher temperatures, and capable of performing much more sophisticated functions than materials used in the past.

Modern electronics-based weaponry depends on rare earths for its function. High strength magnets make possible the operation of actuators and sensors involved in transmission of information to weapons allowing them to complete designated tasks.

The military is also as dependent on smart phones and computer as any civilian to accomplish tasks and enable communication between persons, persons and equipment devices, and between devices themselves. All these applications rely on technology metals, which have essential, usually irreplaceable, roles in the function of equipment essential to our contemporary society.

The House of Representatives and the Senate passed the $700 billion bill for fiscal year 2018 in mid-November, and the 2018 National Defense Authorization Act approving spending levels for U.S. military efforts was signed into law by President Trump December 12 at the White House.

But past the current initiative, there will be further need to support mine start-ups and pricing to compete at the international level. This will require investments several orders of magnitude greater than the current $5 M commitment by Congress.


Dr. Luc Duchesne

Editor:

Dr. Luc C. Duchesne is a Speaker and Author with a PhD in Biochemistry. With three decades of scientific and business experience, he has published ... <Read more about Dr. Luc Duchesne>


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Comments

  • Chris

    Once the mining of RE has been addressed, what then to do with the raw materials? The US does not have the capabilities to turn them into anything useful at a commercial scale as far as I am aware. The act only addresses issues at the lower Nd of the supply chain. What about the most important parts like the middle and upper supply chains whereby these REE are turned into valuable products? It’s a good start but a long journey ahead just to play catchup.

    December 23, 2017 - 9:34 PM

  • dave

    An authorization allows up to $5mln to be spent. It does not appropriate the funds. Appropriators and authorizers don’t always see eye to eye. So while authorizing $5mln may sound significant, that money might not get spent. What’s more, I’m not sure 5 mln is significant.

    December 23, 2017 - 11:00 PM

  • TimAinsworth

    Karl A. Gschneidner 2012: “Unfortunately, today there is a serious lack of technically trained personnel to bring the entire rare earth industry, from mining to original equipment manufacturers (OEM), up to full speed in the next few years. Accompanying this decline in technical expertise, innovation and new products utilizing rare earth elements has slowed dramatically, and it may take a decade or more to recapture America’s leading role in technological advancements of rare earth containing products.”

    http://www.magneticsmagazine.com/main/channels/materials-channels/replacing-the-rare-earth-intellectual-capital/

    Been no shortage of cheap RE past 5 yrs, so appears they’ve been wasted. At the coalface Lynas appears very much aware:

    “The success of any market is always dependent on demand. And demand
    for technology inputs is heavily dependent on new applications. During the
    last 5 years, investment in R&D across the industry has been limited.”

    “……….we will focus on driving total market growth……….by starting to invest, carefully
    in Application development and technology support. In partnership with
    certain Universities and industry research groups, we will invest carefully in
    additional research over the coming years to ensure demand for each of the
    materials we produce.”

    https://www.lynascorp.com/Shared%20Documents/Investors%20and%20media/Announcements%20and%20media/2017/CEOs%20AGM%20address%202017%20v6.pdf
    https://www.lynascorp.com/Shared%20Documents/Investors%20and%20media/Announcements%20and%20media/2017/Lynas%20AGM%20Presentation%202017%20v3.pdf

    Plenty more in the CEO address, LT customer engagement, differentiating product, high value to spec, creating barriers to entry, developing ROW mkt to the exclusion of others, who frankly don’t yet appear to have worked out who, what or where the mkt is.

    December 24, 2017 - 12:31 AM

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