REE recycling research speeds up; China magnet plants to re-open; NSW lays out red carpet for uranium explorers
Well, despite some scepticism from readers to my earlier post on the issue, the question of recycling rare earths and other critical metals seems to be getting legs. The European Commission is financing 14 posts which will be dedicated to work on recycling REE. The European Rare Earth Magnet Recycling Network (EREAN) is to appoint 14 researchers. EREAN is a consortium of universities, research institutions and companies spread over Belgium, Finland, Sweden, the Netherlands, the United Kingdom, Germany and France.
This comes on the heels of a report from the United Nations Environment Program called Recycling Metals which offers some instructive projections of why such recycling may be necessary.
Short-term projections show 2016 demand for light rare earths to be 145,000 tonnes but with production of 165,000 tonnes. No problem there, apparently; that confirms expectations that the lights will be in surplus. Similarly for what the UNEP groups as the medium rare earths (samarium, europium and gadolinium) production there should be 6,000 tonnes in 2016 with demand for just 4,250 tonnes. But with the heavies the picture is quite different: production of 7,000 tonnes but demand more than double, at 14,500 tonnes.
But let’s look at some critical metals separately comparing 2006 (expected) production and 2030 demand (all in tonnes).
Gallium – 2006 production, 152/t; 2030 demand 603/t
Indium – 581/t growing to 1,911/t
Germanium – 100/t to 220/t
In our earlier post we made reference to recycling REE reducing the need for mining, and therefore the environmental problems caused by uranium and thorium. The UNEP makes another point: as global demand for various metals continues to rise, the miners are struggling with falling ore grades at existing operations. This involves greatly increased energy costs.
Get our daily investorintel update
RARE EARTHS: Much needed positive news. Japan’s Showa Denko will resume production at two Chinese rare-earth alloy plants as early as this month after keeping the operations virtually suspended since August, according to the Nikkei news service. The reason? The company expects a recovery in demand for hybrid vehicles, and therefore for rare earth alloys including neodymium and dysprosium.
“Japanese magnet makers have started raising their procurement volumes for the alloys,” a Showa Denko official told Nikkei. The two Chinese plants — one in Inner Mongolia and the other in Jiangxi Province — have a combined annual output capacity of roughly 4,000 tonnes, which is equivalent to 4% of worldwide demand.
However, the plants will not be operating at full capacity until further signs are available that demand is picking up as predicted, the report adds.
URANIUM: One more Australian state is to encourage uranium exploration. New South Wales, which under successive Labor state governments banned not only mining of uranium but even exploration, is expected soon to give several companies exploration permits for areas in the sparsely populated west of the state. NSW Minister for Resources and Energy Chris Hartcher said by early next month he expected to invite companies to apply for an exploration licence, and that exploration licences will be granted by the end of the year.
So far, according to press reports, 39 companies have expressed an interest in acquiring exploration licences — which is interesting considering the less than inspiring mood in the uranium industry at present. (The spot price finally slumped through the $40 level this week, coming in at $39.75/lb. So far as Australia is concerned, the consensus is that a price of at least $70/lb is necessary before anyone will commit to new mine projects.)
NSW will also work with South Australia — NSW’s western border is with that state — to co-operate on projects that straddle the border. South Australia has long been friendly to uranium mining, with two mines (including the huge Olympic Dam operation) active in the state.
Victoria remains the only Australian state to still have a ban on uranium mining, but this is not an issue there as uranium potential is minimal.
InvestorIntel is a trusted source of reliable information at the forefront of emerging markets that brings investment opportunities to discerning investors.