Rare Earths Weekly Review: Rare Earth Meteorite Reminder?
The ProEdgeWire index of rare earths sponsor companies showed an unremarkable share price fluctuation of -3.38%. Among all the companies, Alkane Resources (ASX: ALK) saw the biggest change, rising by over 16% (closing the week at +15.79%); however, the excitement was prompted more by the announcement that it has received the mining lease for the Tomingley Gold Project ( Dubbo, NSW, Australia) than for its rare earth activity. Orbite Aluminae (TSX: ORT) made headlines early this week, having received patents in Russia and China – two major aluminum producers – for its bauxite processing of aluminum ores; this news should have some traction throughout the week and caused a stir two weeks ago when it announced the signing of a deal with France’s Veolia International a major French environmental services firm.
The overall sluggish performance, however, has defied a rising excitement about the sector. On February 15, both ‘The Economist’ and ‘Time’ published articles about rare earths and on that same day, as if to add an exclamation mark, a meteor streaked through the Russian sky, generating a lot of interest in this astronomical phenomenon. There are reports that fragments from the meteorite have already ended up on ‘e-Bay’.
It is well known that meteorites, among other minerals, contain rare earths, reviving interest in the idea that one day; it will be possible to exploit the precious mineral resources present in these ‘celestial’ bodies. Two U.S. companies (Deep Space and Planetary Resources Industries, in which Google is one of the investors) have been researching the idea and one of them has plans to launch probes in 2016 to collect samples after a two-year mission. A Japanese mission (Hayabusa-1) has managed to collect some micrograms of dust from an asteroid but NASA, the European Space Agency and the Japanese Space Agency all have plans to study mining on asteroids.
The commercial viability of such projects might not be light years away, but it’s certainly not something people might want to invest just yet. Nevertheless, the fact that such projects are being considered and discussed is testament to the fact that there is a growing interest in rare earths and that there are concerns about their long-term availability. In a different context, but essentially also demonstrating the rising worldwide interest in rare earths from all sectors of society, is story that re-appeared in various guises in German publications last week after first being published a month ago, including in the Stuttgarter Zeitung. The story is marked by an alarming tone over the dangers of rare earth contaminants in the Rhine. Until 1986 the Rhine was highly polluted, it being Europe’s primary waterway for transport and running through a number of industrial areas. Since a massive chemical accident, the Rhine has been the subject of an intense clean-up effort and constant monitoring, allowing scientists to identify small traces of lanthanum, samarium and gadolinium as well as other rare earths used in medical diagnostics (and for which there was no concern until recently).
They claim to have identified the source in a company that produces catalysts for oil processing. There are no legal limits for this sort of effluent, but the fact that this has raised concerns is testament to the increasing popularity and need for rare earths. The study is rather exaggerated in the quantities of rare earths that are moved through the Rhein and their effects on humans, showing just how mysterious these elements are and how much more study they deserve. Nevertheless, the renewed interest in rare earth contaminants did not fall out of the blue like the meteorite that struck near Chelyabinsk last Friday. Indeed, the pollution angle is just one of several hints of the growing interest generated by rare earths in the European Union and Germany in particular. The spark for this unusual keenness has come from the German “alliance to secure raw materials”. The commodity alliance has the task to ensure the supply critical raw materials – of which rare earths are a major part.
German industrialists have grown so concerned by the need to secure reliable supplies of critical materials that they have called for a much stronger government and military role in pursuing “a strategically oriented foreign economic and security policy” in order to ensure the supply of raw materials for the German economy. The issue has stirred some controversy in Germany but it has also proven the value potential inherent in rare earths and critical minerals, a value that the market is trying to bottle up for the time being.
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The Commodity Alliance was first launched in late 2010 to address “developments in the commodity markets and explore possible answers to the industry” according to its founder Dierk Paskert is a senior manager, who previously served on the board of E.ON, one of Germany’s energy companies and a major player in the renewable technology sector, including wind turbines, which are famous for their REE requirements since in 2012, the main issue pushing for the WTO dispute between the USA, EU, Japan and China over rare earths was the risk of low supplies of REE’s for wind turbines. The fact that the German industry is promoting active government support to secure their raw material may be an alarmist sign from certain geopolitical angles, but it is a very hopeful sign from the point of view of critical metals investors.