EDITOR: | August 19th, 2016 | 52 Comments

Lifton’s Perspective on the Passing of a Paradigm

| August 19, 2016 | 52 Comments
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A paradigm is a generally accepted model used to try to make sense of (i.e., understand) or see if there is any logical continuity (i.e., one thing follows from another) in a set of data that we think (or guess) are related.

The Copernican world view, for example, which replaced the then held and ancient one that the simplest explanation of the universe was that it revolved around the earth, known as the Ptolemaic world view, no longer (in his, Copernicus’ time) matched either the observations or calculated predictions made from Ptolemy’s geometric model. Copernicus proposed that the earth moved around the sun and was not as the Church of his time still held the center of the universe. This new paradigm did not immediately replace the Ptolemaic view. Indeed, it allowed of no more accurate calculations of the orbits of the planets until the naked eye astronomical observations of Tycho Brahe were used empirically by Johannes Kepler to derive three laws of planetary motion. However  the postulate that the earth went around the sun became the paradigm world view only after Issac Newton discovered that there was a mathematically definable force in nature that connected masses and that there were furthermore three laws regulating the motion of not just these but of all masses. Isaac Newton also developed the mathematical tools to “prove” (by logical derivation) that Kepler’s laws governing planetary motion and placement were the outcome of the operation of the forces of nature that he had first discovered. The Copernican hypothesis thus became the paradigm world-view.

Notwithstanding the statement in the above paragraph I note that I personally do not know anyone who has made the astronomical observations himself and then applied Newton’s laws of mechanics and gravity mathematically to them to “prove” that the earth goes around the sun. We take it for granted that our credentialed and educated scientific elites have not only done this but have also checked it out repeatedly. Did I mention that Newton’s laws and mathematical analysis are both mental constructs based on observation and saying that the application of the one to the other upon “data” collected by yet others is as much philosophy and psychology as it is science? My point is that we take the word of others even for things that are “obvious.”

The much less important junior mining paradigm used by investors has been that the simple discovery of a mineral concentration, a deposit, is all that is needed “obviously” to begin the process of turning that deposit into not just a mine but into a refined and fabricated metal or material. But the recent shift in focus of the “market” onto technology metals has demonstrated that this paradigm is false. It has turned out that before being able to attempt the valuing of a mineral deposit it must first be placed into the context of the supply chain necessary to create the desired commercially useful end-products of the element(s) in that mineral. Traditionally the typical plan of a junior miner based on the existing “paradigm” has been to explore for and to find a deposit and begin the process of developing it into a mine while immediately beginning looking for the deposit, being put into the development  process, to be purchased by an existing mining company that has the resources to take over the development.

At the turn of the twenty-first century a Canadian mining scam perpetrated by a group of Canadian mining companies principally controlled by Bre-X Minerals of Calgary caused this traditional paradigm to be questioned in detail. A hoax was perpetrated by a criminal group where a supposed deposit of gold in Indonesia turned out to have been “salted.” The malefactors falsified samples to show extraordinary amounts of gold in the “deposits” and billions of dollars were invested in this junior mining play by greed besotted “investors.” After the scandal broke and a murder and the billions of dollars had disappeared “into the market” the Canadian government decided to look less foolish and naïve and to, from then on, centrally regulate “public” investment in junior mining by requiring that information on the deposit and on the likelihood that it could be commercially developed be put forth, quantified, and independently verified before any such venture could legally seek development funding by public subscription to develop a deposit and build a mine. This was codified as Canadian National Instrument 43-101 and became the template required to be followed by any legal entity planning to raise money through a public offering in Canada. Other jurisdictions followed, most notably Australia, which adopted a similar regulatory agenda known as JEORC. Today most jurisdictions require one or the other agendas be followed in order to raise money “publicly” for a mining venture to be put into development. In the end of course this only means that qualified investment advisors who recommend a 43-101 compliant venture are somewhat more shielded from liability than were the fools who recommended Bre-X.

In the USA intriguingly regulations such as 43-101 are considered only as good models and are not formally required by law and therefore do not offer as good a shield ( i.e., a way out).

As one of its requirements 43-101 requires a marketing study, but these studies are mostly poorly thought out and it is difficult to understand whether Canada’s National Instrument 43-101 that requires all parts of the documentation to be signed off upon by a “qualified person” was drafted by men who understood supply chains or end-user markets at all. They certainly had no idea how a “qualified person” should be defined with respect to the connection between a hole in the ground and producing and selling end-use products (i.e., supply chains and marketing).

The original (43-101) junior mining paradigm was most visible in its failure in the attempt between 2007 and, say, 2013 of qualified persons to trumpet that the mere existence of a deposit containing rare earths that could be recovered by known extraction and separation technologies was in and of itself valuable (could be evaluated).

This is sheer nonsense, and yet I think that this model, which is nothing more than a “natural resources share price appreciation paradigm” still persists and is even getting ongoing application in lithium, graphite, and the other technology metals used in alternate energy production and storage sectors right now.

Markets have long recognized that vertical integration in manufacturing has limits due to the sheer complexity of the task.

Yet markets do not seem to notice that the steel sheet rolling out of a steel manufacturing plant is at the end of a long and complex, in and of itself, process that begins either with the discovery of a mineable iron ore deposit or with the collection of scrap metal. In fact, American steel making was “revolutionized” just in the last generation by the substitution of scrap and electric arc furnaces for ore and blast furnaces for the production of steels, so that even staid steel making was and still is caught up in applying new and newly applied production and manufacturing technologies. The processes and multiple supply chains necessary to then take that steel and turn it into a complex product such as a car are themselves constantly evolving and (they, the processes) are simply beyond the understanding of the nation’s financial journalists and sadly of even its self-styled resource economists who talk about the lubricant (capital) or the advances (innovations) in technology but never the complex the supply chains necessary for the product they describe to come into existence.

We have an $18 trillion economy,” explains Robert Gordon of Northwestern University, whose book The Rise and Fall of American Growth came out earlier this year. “Most of it is operating by the same business methods and procedures that have been in place for at least 10 years.”

With all respect to Professor Gordon it is sometimes 100 years during which a natural resource production technology has been running essentially unchanged.

As a good example of blinkered financial analyst thinkinglet’s take the demand for “lithium” being calculated as a function of the quantity of its use in electrified vehicles (EVs) as the active material in secondary (rechargeable) lithium-ion storage batteries.

The number of OEM motor vehicles produced each year globally is today at least 85 million. The number of those produced using electrified powertrains wholly or partially (hybrids) is less than 1% of this.

In order for this percentage (less than 1) to increase the very first thing needed will be an increase in the production at the mine of lithium, cobalt, and graphite the three technology materials from which most of the lithium ion batteries now committed to production are manufactured.

There is probably enough lithium capacity in the legacy large scale miners today to satisfy any “planned” increase in long term demand, but the mining and refining of lithium is a long process with the defining process for brine “mines” being a long slow “solar” evaporation period. Hard rock lithium requires, instead of evaporation, the roasting, extraction, separation, refining, and the chemical fabrication of forms used by the battery industry.

The extraction of lithium from its “ores” today is thus energy and/or time extensive. Note that brines that cannot be dried in the sun are useless since the energy imparted to the evaporation process over the 18 month drying time is ENORMOUS and would be totally uneconomic to replace by manmade energy.

The question I have for the current flood of lithium juniors is the sameone I had for the rare earth juniors (for which they never had an answer): What are you going to do with your “concentrates” once you produce them? The answer from the lithium juniors is, of course, the same as it was from the rare earth juniors, “We will produce the concentrates and “they” will buy them.” “They” being the market.

In fact, the lithium juniors for the most part do not know who “they” are. Therefore, they do not know exactly what they should do to make their output as valuable as a mining operation can. They are reduced to dueling announcements of progress towards a 43-101 status based on an airy-fairy marketing plan for marketing not end-use products but rather supply chain intermediates.

In short: I think that the legacy producer base load of lithium supply is sufficient for current demand and excess production capacity exists sufficient for slow but steady growth exists among these same legacy lithium producers. Additional new supply only makes sense if there is growth exceeding present rates or if new extraction or downstream technologies can increase the turnaround time of the entire supply chain that terminates in battery grade lithium chemicals.

I note that the Chinese government has come to the conclusion that the reduced carbon generation by what the Chinese call “new” energy (powered) vehicles is a necessity. Therefore the government is creating a financing system for the production of electrified vehicles that takes into account the entire supply chain from the discovery and development of new resources of lithium, cobalt, nickel, and manganese to the recycling of the vehicles fuel storage devices (lithium-ion batteries).

There is no technology with more potential to be the cheapest  and most efficient way to extract lithium and cobalt from their ores, tailings, and relevant industrial and consumer scrap than Molecular Recognition Technology (MRT). The commercialization of this technology originated with and continues with IBC Advanced Technologies, Inc. (IBC) of American Fork, Utah. IBC is a private company, but keep an eye on it, and if it becomes public…


Jack Lifton

Editor:

Jack Lifton is the Sr. Editor for InvestorIntel Corp. and is the CEO for Jack Lifton, LLC. He is also a consultant, author, and lecturer ... <Read more about Jack Lifton>


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Comments

  • Richard Flook

    Peter Harben first said “without a market, a deposit is merely a geologic curiosity”. This is nothing new to those in the market driven industrial minerals sector. The metal miners in particular, who have ventured into industrial minerals are only now starting to understand this.
    The same rigor in capex and opex needs to be applied to so called market studies in many NI 43-101 publications.

    August 17, 2016 - 2:44 AM

  • Alvarita

    An awfully long preface just to push MRT yet again. Don’t look now but your slip is showing.

    August 17, 2016 - 4:52 PM

  • NdPrDyTb

    At some point readers will start to question whether anything this author has to say is worth reading because of the shameless repeated boosterism around MRT.

    August 17, 2016 - 9:42 PM

  • Bill

    Great article Jack.

    New separation technologies will make the Lynas LAMP obsolete

    http://www.miningweekly.com/article/innovation-metals-successfully-separates-high-value-rare-earths-2016-08-12

    It’s actually happening, – Innovation Metals Corp (IMC) has successfully demonstrated that its proprietary RapidSX can produce commercial-grade praseodymium-neodymium (Pr-Nd) oxide

    wake up and smell the roses

    August 18, 2016 - 12:05 AM

  • Steve Mackowski

    I have asked myself this question many times: “Why don’t some of these junior hopefuls drop out of REO, lithium and graphite?” It’s all too hard for them because of the supply chain development issue. “Why don’t they simply get some gold ground and get into production and make some money more easily?”

    August 18, 2016 - 1:01 AM

  • Bill

    Hi Steve, as for the rare earth sector, only a few short years ago there were 200 plus rare earth developer hopefuls, today there would be around 20 real rare earth contenders – so there’s 180 plus that have moved on to something else

    August 18, 2016 - 1:08 AM

  • Aat Oskam

    Bill, what’s your problem? The cost of MRT in mass production has not yet been made clear. Is it because it cannot compete with SX? If you are so sure Lynas is a dead end, please prove your bold comment?

    August 19, 2016 - 5:00 PM

  • hackenzac

    There are respectful ways to say “prove it” without impugning a person’s honesty and integrity. Jack Lifton who is on Ucore’s advisory board in company with the Izatt’s has seen enough to convince him to write a piece on a new paradigm in separation technology. Gareth Hatch who is equally credible asserts in his comments in that Innovation Metals link above that their technology is better than something with “expensive resins unproven at scale” and then there’s Lynas who thinks that they’ve maximized efficiency as much as it can get, not to mention posts by Tim indicating that the Chinese aren’t exactly idling by in improving their operations. Opinions are like assholes, everyone has one, even trolls, so to settle it, we need to see some cost metrics and that ball is mostly in Ucore/IBCAT’s court. It’s not enough to say that it’s better. Prove it!

    August 20, 2016 - 1:27 PM

  • Jack Lifton

    Hakenzac

    The resource world is not centered on rare earths. MRT developed and commercialized by IBCAT over the last 28 years is now FOR EXAMPLE the separation technology of choice for PGMS extracted into base metal collector matrices. I was in Brazil yesterday at Vale and an process development engineer told me that she had been following MRT development for 20 years. IBCAT was approached by UCORE 3 years ago to see if MRT could be applied to the separation and purification of the individual rare earths from a PLS made from a mixed concentrate. The project was successful and a multi-ton per year pilot plant is operational in Utah. The design of a full scale plant is finished. It will be a 1200 ton per year operation. This is not a laboratory demonstration it is a professionally engineered operation, which has resulted in a scalable technology.

    Jack

    August 20, 2016 - 7:37 PM

  • Alvarita

    Anyone see the cost metrics that hackenzac asked for? Just curious.

    August 20, 2016 - 8:52 PM

  • Jack Lifton

    Alvarita,

    Are you interested in either tolling a rare earth mixed concentrate as a PLS or selling such material or buying an MRT separation system tailored to your rare earth feed stock? If so, please call Ucore, and they will be glad to discuss prices. Otherwise you are asking for information that will give competitive advantage . Present a project and Ucore will give you a cost. You will be then free to shop the project around to see if you can do better. This is how business is done in the real world not by publishing costs and prices. Maintaining Blog discussions and writing articles insinuating high or hidden costs are every amateur’s privilege. True costs are why there are almost no junior rare earth mining ventures left.

    Jack

    August 20, 2016 - 9:23 PM

  • hackenzac

    Certainly the successful MRT pilot plant is serving to prove scalability as well as a long track record with PGM’s but to clarify Jack, are you saying that a 1200 ton per year MRT plant for rare earth has been greenlighted? A decision to build such a plant would serve to prove that the numbers crunch even if they are proprietary.

    August 20, 2016 - 11:38 PM

  • Alvarita

    Jack,

    True costs vs income determines whether any company succeeds or fails…pretty basic concept. If everything is such a big secret I’ll simply have to wait for the day that an audited financial statement proves that MRT is profitable in the HREE space. Absent any proof to the contrary it is indeed anyone’s(amateur or otherwise) privilege to question claims of any nature, especially when risking investment capital. That’s the downside of keeping secrets. Let us not forget that you write for and I assume are compensated by a company paid to promote various other companies, one of which is Ucore. Additionally, you’re a member of Ucore’s advisory board. None of which is a secret, but you are the last person I expect to be unbiased or objective. I’m sure any person without a stake in the game either way would agree. Happy to say that I have no monetary stake in the game either way, although playing press releases proved to be profitable for a while.

    August 21, 2016 - 2:56 AM

  • Investor

    The wisdom of the great writer and even greater promoter, keep an eye on it and if it becomes public…
    MRT can work in PGMs and in rare earths no hope to match the efficiency of the traditional SX.
    I said it before, we are in a “new” technology age, if you have a new technology which kind of works and is environmentally friendly you will do well, don’t worry about the cost.

    August 21, 2016 - 7:36 AM

  • Denari

    People in the comments are so worried about the costs of MRT. Yet, Ucore has secured a partnership with a major alberta oil company and Jack mentioned a very interested company in Brazil. On top of this Ucore hasnt hidden the fact that they have numerous interested parties inquiring about MRT. By not revealing MRT true costs, there is of course skeptics, I understand both sides as an investor and as Jack pointed out giving away competitiveness. But Ucore stock price will not be what it is today when Ucore continues to announce more and more deals on various technology metals. By the time skeptics put 2 and 2 together about profitiability to partnered companies, Ucore’s sp will look different what it is now. What company would shy away from a technology that completly replaces harmful solvents to man and earth at a competitive price with a small footprint on site and in produces tonnage in a much shorter time frame.

    August 21, 2016 - 10:04 AM

  • sgm

    I’ve heard, Commerce Resources with their ASHRAM Project in Quebec could be the solution to secure supply of western industries with HREE.

    August 21, 2016 - 10:16 AM

  • JJBeswick

    Really the RE separation space has become a bit of a circus. After 50 years of SX dominance there are suddenly any number of superior alternatives.
    Super SX (because they never really bothered to think about how to improve it), molecular recognition (proven a great tech for the likes of platinum group metals; hardly a COP endorsement for commodity metals) and more than one chromatography method (most recently used for protein separation an microgram levels). That’s right, there were also the magnetic separation methods on the ore as well.
    Anyone else smell a rat??
    In any case the main costs of bringing RE to market are elsewhere: mining, beneficiation, getting the RE into solution (usually cracking) and product finishing. And separation too of course, by SX or other methods.

    August 21, 2016 - 10:48 AM

  • sgm

    At Commerce Res. they are convinced that they can produce rare earth mineral concentrates (42% TREO at 76% recovery) at extremely competitive costs.
    Never heard of it ?

    August 21, 2016 - 11:38 AM

  • Jack Lifton

    Hakenzak,

    I am NOT saying that the plant ahs been greenlighted; I don’t know. I do know that the construction of such a plant is dependent not just on its design and efficiency and costs but also on securing a reliable supply of feed stock and of selling the products made form that feedstock into the marketplace at a profit.
    I am saying that Ucore is now ready to become a high tech manufacturing (customer specified forms of chemicals) company. This puts Ucore far and away at the top of the list of start-up technology metals refiners in the Americas (North, South, and Central). IBCAT sells products and services and has for 28 years. Within a year Ucore will be selling a vastly expanded suite of technology materials based on MRT processing.

    Jack

    August 21, 2016 - 1:26 PM

  • Jack Lifton

    Investor,

    You are very wrong. MRT is far more efficient, lest costly in both CAPEX and OPEX, and far faster in cycle time than SX.

    Jack

    August 21, 2016 - 1:28 PM

  • Thomas Crown

    CCE is still a hidden jem because many investors are focussing on the big names like Lynas & Alkane or Ucore and NioCorp.

    Though, I follow Commerce Resources over a couple of months now and it looks as if they have learned from the failures of Molycorp and the last REE downturn to optimize their Ashram project in various ways.

    They have convinced the Quebec government as far as I know and got some funding recently with more to come via Quebec Resources and local infrastructure (Plan Nord ??)

    Therefore, with fresh money and positive drill results it should be possible to sent samples to the Glencore’s and Mitsubishis in the western hemisphere to strike a deal. .. then they’ll get the attention in their share-price as well 😉

    August 21, 2016 - 1:51 PM

  • sgm

    A hiddden gem ?
    Is the evaluation “competitive costs” reliable ?
    What ist this optimism based on ?
    Maybe I’m wrong but I couldn’t find any anns by Commerce Res. about reserves, let alone PFS/FS.

    August 21, 2016 - 2:39 PM

  • Bill

    well bugger me, everyone’s doing it …

    https://translate.googleusercontent.com/translate_c?depth=1&hl=en&prev=search&rurl=translate.google.com.au&sl=zh-CN&u=http://www.ac-rei.org.cn/portal.php%3Fmod%3Dview%26aid%3D4590&usg=ALkJrhhrUQWascEnlkCYFOas3lzos0_YZw

    there are no hidden agendas – the fact is new technology will replace old / existing technology for rare earth extraction and seperation

    Lynas RIP

    August 22, 2016 - 1:04 PM

  • Hiwayman

    Bill,
    Every new tech has its detractors till it becomes mainstream,
    then the know-it-all brigade and their ‘oracles’ turn in midstream
    and say -‘we always knew’ it was going to be successful.

    Chris Eggleston’s ‘ Virgo’ [commonsense] observation…
    ‘Ree companies have to be boutique’s not Kmart. Pile em high,
    sell em cheap does not work.’

    Dr Izatt..’ MRT needs less separation stages,less space,fewer
    chemicals fewer employees, no solvents and simple equipment.’
    [How green can you get?] Rare Earth ’boutique’s are the way of
    the future and to continue wading in the shallow end of the pool
    [SX extraction] is folly.

    Hm.

    August 22, 2016 - 7:52 PM

  • Tim Ainsworth

    Irrespective of the bottom up economics I seriously question how many of these would be producers are tuned into the reality of end markets, the customers who ultimately pay the bills?

    Drawing off IMCOA 2015 demand data 99% of total volume sells < $40kg, of that 65% sells < $4kg leaving approx 1500t or 1% sells circa $400kg.

    Are the economics of these proposed projects all focusing on the 1% as justification? If so the ROW market is going to provide VERY slim pickings as 100t DyO/TbO will satisfy 2016 demand based on HY export numbers, that's $40M in REVENUES, not profit. Of that, US appears to have imported the grand total of 50kg DyO & 3kg TbO, lunch money.

    Of course grabbing that market assumes displacing existing suppliers, and any additional "dark" supply, or carting "ice to the arctic".

    The other scenario is the "build it and they will come", but I wouldn't fancy pitching that to financiers on the track record of the predictions we've seen from all manner of experts past 5yrs or so. Lol, the "massive deficit" forecasts for Dy & Y 2015/16 are still proudly on display in Fantasy Studies & webpages everywhere.

    Wonderful science, but show me the economics at end market, the where & how.

    August 23, 2016 - 5:43 AM

  • Bill

    Wonderful posturing Tim, however these new technologies have now been proven at commercial scale.

    August 23, 2016 - 7:54 AM

  • Tim Ainsworth

    What commercial scale Bill, are you at all capable of putting even some very rudimentary detail around that?

    Who’s going to sell what to whom at what values & volumes, consistently, month after month, in some broad relation to production spread, profitably.

    And do you propose displacing existing supply, presumably undercutting price, sponsoring demand growth, or just shoving it right up the Dragon?

    August 23, 2016 - 8:41 AM

  • Bill

    Rare earth salt using its proprietary technology company announced the successful completion of the separation and purification of rare earth elements of large-scale industrial test.

    https://translate.googleusercontent.com/translate_c?depth=1&hl=en&prev=search&rurl=translate.google.com.au&sl=zh-CN&u=http://www.ac-rei.org.cn/portal.php%3Fmod%3Dview%26aid%3D4590&usg=ALkJrhhrUQWascEnlkCYFOas3lzos0_YZw

    There are no hidden agendas – the fact is new technology will replace old / existing technology for rare earth extraction and seperation

    Lynas RIP

    None so deaf as those that will not hear. None so blind as those that will not see.

    August 23, 2016 - 3:50 PM

  • Tim Ainsworth

    Wonderful science Bill, now point me at any vaguely quantified business plan, linked thru to identified (not fuzzy forecast) end markets across the suite, that supports the economics of any alt supply hopeful?

    August 23, 2016 - 9:26 PM

  • HC

    Bill
    Exactly how much REO does this new tech commercial scale plant produce?

    At this time and in for the foreseeable future SX is the only proven tech to separate REE into individual REO at commercial scale and in commercial quantities.

    How many years will it take for any of these new REO separation techs to make it into commercial scale production? As far as I can see not for at least 5-10 years IMO if ever.

    August 23, 2016 - 9:41 PM

  • Investor

    It all comes down to price. End we know that the price is high, hence teh environmental angle. Other factors as well but I will not go into it. Of course as pointed out above SX is only a small part of the large story.
    Even then one needs to prove operation at the large scale etc.
    The fact is that heat has been long out of the rare earth market.
    UCORE saw an opportunity and went for it. It allowed them to survive and keep getting cash. Well done to them. They recognised the fact that market is hungry for a new technology with environmental bend and a good story.
    Jack I know that you know this but this is just a good story at the right time. And we should not allow facts get in a way of a good story.
    Right!

    August 24, 2016 - 3:30 AM

  • Jack Lifton

    Investor,

    This is more than a good story. There is room in the global marketplace for rare earth supply chains not anchored on Chinese mines. However the size of this non-Chinese supply chain market is limited. The value of MRT is in fact its impact on the overall economics of non-Chinese supply chains. And by choosing to use MRT as its (new) core competency Ucore has not only placed itself in the running to be a non Chinese rare earth supplier but also a technology supplier to multiple extractive resource industries long seeking such simplified separation technology.

    Jack

    August 24, 2016 - 6:44 AM

  • Christopher Ecclestone

    Very true on the marketing studies. These are usually one of the very weakest sections of a NI43-101 and seem to be constructed on the the theory that “you can always buy/sell gold, can’t you?”. Projecting gold’s immense fungibility onto Tellurium or Lutetium though is another matter.

    Indeed on some obscure metals one could maybe write a book (if one knew enough) on their obscure markets or make the observation that “no market is apparent and thus caveat emptor”. No consultant gets paid for shrugging his shoulders and making the Caveat Emptor call despite its elegant simplicity. Though it may be the kindest piece advice of all to give an investor.

    August 24, 2016 - 8:24 AM

  • Jack Lifton

    Christopher,

    It’s difficult to know if those who rely on “If we pretend to go through the motions to start digging up the stuff then a big rich company will buy the deposit,” and “Sure there’s a market for thulium. It’s just not transparent” are stupid, delusional, or crooked.
    My favorite question is “Why are you not raising enough money at the onset to develoo the deposit into a producing mine?” The answer usually is: “The share market won’t support that.” Truer words were never spoken.
    Mining is a long long lead time investment. Yet day traders want instant profits. The junior resource share market is simply a casino whose chips are shares. It has the same relationship to commodity investment as military music has to music.

    Junior technology companies such as today’s Ucore already have a product. The issue is not product development; it is marketing.
    Jack

    August 24, 2016 - 9:06 AM

  • Tim Ainsworth

    That’s the thing, all we see are these broad brushed “motherhood” statements & fantasy forecasts, virtually no factual connection to existing market segments, their likely “needs”, as in volumes, or “wants” as in product, not REE, but PRODUCT, as in blends, purity to spec, down to ppm, and variable customer by customer. Then rationalised across the suite, month by month, to max final sales value.

    What proportion of that value is created in the tertiary stage of finishing? Who has the customer contact/knowledge, let alone the skills to manipulate individual ores through the various processing stages, to create a high value product to displace the Chinese?

    Facts are, there is an abundance of RE available, and it’s cheap. If we can believe the “news” stories China is still discovering deposits and building new processing capacity, as it closes the old. Only those companies that can produce product to customer specs, and capture that value in-house, are likely to be sustainable, by both competing with Chinese supply and stimulating new markets.

    ATM RE industry reads like “Dear Santa, c/o Nth Pole”, a warm fuzzy place where you ship your REO each month, invoice attached.

    August 24, 2016 - 9:49 AM

  • Bill

    Innovation Metals Corp (IMC), a private Canadian company and the developer of the patent-pending RapidSX process, has successfully completed a demonstration programme to produce commercial-grade praseodymium-neodymium (Pr-Nd) oxide, using feedstock from the Mineração Serra Verde deposit in Goias State, Brazil

    IMC’s proprietary RapidSX solvent-extraction (SX) process was developed for the low-cost separation of rare-earth elements (REEs)

    The demonstration project was conducted at IMC’s pilot-plant facility in Mississauga, Canada, capable of producing 2t/mth of REEs.

    The RapidSX process was developed as a result of funding from the US Army Research Laboratory, part of the US Department of Defense.

    The high-value Pr-Nd oxide was separated to 99.5% total REE purity using the RapidSX process; lanthanum oxide was also produced as a byproduct of the demonstration programme, with 99.97% total REE purity.

    These initial results indicate average separation costs of below US$2/kg for a suite of high-value separated REEs.

    Capital costs for a 2,500t/y REE RapidSX-based facility are in the region of US$10-15 million.

    http://www.miningmagazine.com/future-of-mining/future-of-mining-investment/new-sx-process-for-rare-earths/?

    there you have it, this new technology is both cheaper (CAPEX and OPEX) and faster than traditional SX

    Lynas RIP

    August 24, 2016 - 11:20 AM

  • HC

    Bill
    That’s purely separation costs.

    Doesn’t include mining costs or costs to process ore into feedstock for the SX stage.

    Lynas costs include all of the above and can produce REO to customer spec. Last I heard it was around $13/kg and the LAMP was still being optimised.

    But nice try lol

    August 24, 2016 - 5:42 PM

  • Jack Lifton

    HC,

    I think you’re correct on all accounts with regard to total “all-in” costs and with regard to Lynas.

    Jack

    August 24, 2016 - 10:19 PM

  • Bill

    Only new technology like Ucores MRT and IMCs RapidSX can make the West competitive imo

    … as it appears the downward pressure on rare earth prices will continue … with India having recommenced the export of rare earths to Japan

    http://www.deccanchronicle.com/business/in-other-news/240816/vizag-resumed-exports-rare-oxides.html

    … how will Lynas survive if their revenues continue to shrink, it must also be a serious worry for Lynas that the Japanese have an alternative non-Chinese supplier

    August 25, 2016 - 6:48 AM

  • sgs

    2. attempt:
    Seems, that anybody have Commerce Resources on his radar ?
    Wonder why.

    August 25, 2016 - 11:00 AM

  • hackenzac

    Daido Steel is moving to the US to make neodymium magnets. Presumably, they will plan on sourcing from North American feedstock.

    http://asia.nikkei.com/Business/Companies/Daido-Steel-to-make-neodymium-magnets-in-US

    August 26, 2016 - 11:03 AM

  • Jack Lifton

    Hakenzac,

    Thanks for spotting this. I really appreciate the update.

    Jack

    August 26, 2016 - 5:28 PM

  • Tim Ainsworth

    Indeed, great news:

    “August 26, 2016 4:15 am JST
    Daido Steel to make neodymium magnets in US

    NAGOYA — Daido Steel has decided to build a neodymium magnet factory in the U.S. to meet growing demand from automakers there for motors used in hybrid and electric vehicles.

    The plan is to initially spend several billion yen — the equivalent of tens of millions of dollars — to get the plant up and running by 2019. More equipment will be added later in a stepwise fashion between then and 2026. Investment will ultimately total around 10 billion yen.

    The Japanese maker of specialty steels and magnetic materials is the fourth-largest producer of high-performance neodymium magnets in Japan, after the big three of Shin-Etsu Chemical, Hitachi Metals and TDK.

    Daido Steel already operates factories for neodymium magnets in Thailand and the Chinese cities of Shenzhen and Suzhou, making the American site its fourth overseas production base.

    The company also plans to reorganize the group’s magnetic business, merging subsidiaries Daido Electronics and Intermetallics Japan next January to unify production, development and sales activities.

    Daido Steel and Daido Electronics worked with Honda Motor to develop a neodymium magnet that does not use any heavy rare-earth elements. The Japanese automaker plans to employ this magnet in hybrid systems of new models.

    Intermetallics Japan specializes in high-purity, resource-saving sintered magnets and has supplied them to BMW since 2013 for hybrid vehicles.”

    Will be interesting to see if they follow the Hitachi model and simply import alloy, and plan to produce bonded or sintered, or both. Whichever, it will no doubt be matched to demand from the US auto manufacturers, has to be viewed as a very positive development.

    Oddly makes no mention of Daido’s new Japanese manufacture:

    ” Starting next month, August 2016, Daido Electronics will begin the mass-production and shipment of this magnet using a new production line that the company built in its factory (located in Nakatsugawa City in Gifu Prefecture in Japan) using a subsidy received from the Japanese Ministry of Economy, Trade and Industry (METI).”

    August 26, 2016 - 8:39 PM

  • Tim Ainsworth

    Jack, going way back to Moly’s press release on the formation of Intermetallics Japan:

    “The joint venture will manufacture sintered NdFeB permanent rare earth magnets with technology licensed from Intermetallics, Inc., a partnership between Mitsubishi, Daido, and Dr. Masato Sagawa, co-inventor of the NdFeB magnet.”

    “The technology to be used by the joint venture is a new and novel approach that does not depend on the use of patents held by other magnet companies. The technology allows for the manufacture of permanent rare earth magnets that deliver greater performance with less reliance on dysprosium, a relatively scarce rare earth. The process also results in higher production yields.”

    Subsequently Daido have bought out the two partners, and added a bonded NdFeB facility, but I understood the release above related to sintered NdFeB.

    Can you shed any light on Dr. Masato Sagawa, or his “technology allows for the manufacture of permanent rare earth magnets that deliver greater performance with less reliance on dysprosium” that claims to sit outside the Hitachi patent regime?

    Thinking perhaps that could be one strong market advantage if Daido are not paying Hitachi license fees over US manufacture?

    August 26, 2016 - 9:54 PM

  • Tim Ainsworth

    Confirmation of the process at least:

    “Presently, the Nd-Fe-B sintered magnet
    is at its second stage of development. The
    main usage in this stage is for relatively
    large motors and generators used in hybrid
    cars, electric cars, air-conditioners, wind
    power generators, and elevators. By using
    the strongest magnet on any of the above,
    energy conservation and the prevention
    of global warming can be effected. NdFe-B
    sintered magnets used for the above
    purposes must have heat resistance and
    therefore requires large amount of Dy.
    The research theme I had been nurturing
    for many years was the development of
    a manufacturing process for highly heat
    resistant Nd-Fe-B sintered magnets
    without the use of Dy. Intermetallics
    proposed this research theme, and with
    the acquisition of research funds from
    venture capital, bank investors and
    such large corporations as Mitsubishi
    Corporation and Daido Steel Company, as
    well as research budget from the Ministry of Economy, Trade and Industry (METI)
    and NEDO, I carried out the development
    of this new process. The study of this new
    process was successful, and considerable
    Dy-saving, heat resistant Nd-Fe-B sintered
    magnets have been achieved. Mass
    production of the prototype has also been
    successfully completed in the pilot plant.
    Presently, a mass production plant using
    this new process is underway, and from
    the beginning of 2013, the production of
    Dy-saving highly heat resistant Nd-Fe-B
    sintered magnets is scheduled to begin.”

    http://www .japanprize.jp/data/prize/commemorative_lec_2012_e.pdf#page=13&view=Fit

    August 26, 2016 - 10:20 PM

  • Tim Ainsworth

    Whichever, appears Daido’s HRE Free mag is catching a bit of attention:

    TOKYO — Honda Motor and Daido Electronics have developed a new method for making high-performance magnets — used in products from electric vehicles to wind turbines and air conditioners — that eliminates the need for rare-earth metals imported from China.

    The new technology helps Honda secure a stable supply of a vital part for producing electric motors, which are a key component of hybrid and electric vehicles. Daido Electronics, a unit of Daido Steel, says it has received inquiries from about 20 companies in the auto industry about the magnet and plans to set up a new plant in the U.S. for about 10 billion yen ($98 million) in three years, aiming to boost its presence in North America, where sales of environment-friendly vehicles are expected to rise.

    asia.nikkei.com/Tech-Science/Tech/New-high-performance-magnet-limits-China-risk

    August 31, 2016 - 8:57 AM

  • Tim Ainsworth

    Also rumours from the Dragon:

    “”New energy vehicles will become a permanent magnet synchronous motor magnetic grow new impetus, TeslaModel3 high probability application permanent magnet synchronous motor, is expected to set off the market enthusiasm. Permanent magnet synchronous motor is the current mainstream configuration of new energy vehicles, recently go the cheap route Tesla Model3 large probability of permanent magnet synchronous motor applications, is expected to further off the market concerned.”

    So if true, and Elon recants to PM motor, will it become a Sagawa or a Croat, can’t wait for the mktg blurb around either.

    August 31, 2016 - 9:07 AM

  • Jack Lifton

    Tim,

    Thanks again very much for your sharp eyes.

    Jack

    August 31, 2016 - 10:51 AM

  • Tim Ainsworth

    Analyst gossip, canary in a coal mine, soon see, but certainly would herald rehab for RE.

    Perhaps almost as significant, GM’s Bolt appears singular PM drive, as opposed Volt 16 secondary, heavier, complex ferrite, designed in circa 2012.

    As Amanda Lacaze has suggested, did a whole model generation largely skip RE as fall out from the price spike/supply scare?

    August 31, 2016 - 12:13 PM

  • NGS

    Hi Jack,
    MRT is characterized as inexpensive and “green.” Yet no significant details are available. I looked at the prices of off-the-shelf crown ethers (which I presume are the basic material of MRT) at Sigma-Aldrich and they ranged from roughly $5 to $ 1000 a gram. So an outsider cannot estimate costs, not knowing which specific crown ethers are used and how much is required per cell or column, for a given PLS throughput. Yes, one could probably figure out which ones might trap specific lanthanides, but it would take lots of time and experimentation to back-engineer MRT. As for safety the crown ethers range for nice to nasty (the latter being quite toxic on ingestion or skin contact). And it’s not clear how green the process of manufacture of the crown ethers and their incorporation into columns actually is. Put another way, how much of the nastiness of an SX plant is transferred in the case of MRT (where the plant is nicer) to an earlier stage (making the crown ethers and the columns). So many unknowns….

    August 31, 2016 - 5:37 PM

  • Jack Lifton

    NGS,

    I use the term “crown ethers” just as a descriptive one of a class of chemical compounds that have been successfully used for MRT. IBCAT is far ahead of the original research some of which was nearly half a century ago. In passing though I have to add that no manufacturing chemical engineer would base his cost estimates on the “research” materials sold by Sigma-Aldrich in any case. IBCAT manufactures its Superligs in-house very inexpensively I might add. The IBCAT operations in Utah are among the cleanest and greenest I have ever seen, and that description certainly applies to the rare earth separation pilot plant there that uses NO organic solvents whatsoever in its operations and which recycles all of the unreacted acids from the PLS feed stocks. In my opinion and experience in China, the USA, and Europe an SX system in operation is to an MRT system for the same purpose as a pig sty is to an operating theater. I will not put Lynas in that category; it has the cleanest SX operation I have ever seen. By the way the economics of extractants are functions of their cycle time and cycle life as well as of the costs of their precursors.

    Jack

    August 31, 2016 - 6:09 PM

  • Mike Evans

    Tim,
    Appreciate reading your thoughts and leads. Would be keen to catch up in Sydney for a coffee some time if you are ever in town.

    Mike – Curran & Co.

    September 1, 2016 - 9:59 PM

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