EDITOR: | June 30th, 2016 | 12 Comments

Core Consultants’ Rare Earth Report: SRB stockpiling ends in stalemate

| June 30, 2016 | 12 Comments
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Core Consultants has published it’s July issue of the Monthly Rare Earth Report. The main topics discussed in this feature include:

  • Potential for new round of stockpiling
  • SuperLig®-One plant successful
  • India to develop rare earth to further defence industry

The last round of stockpiling ended in a stalemate. The SRB were unable to procure material at their target price owing to artificially inflated offer prices. The expectations are that the SRB will try again to purchase the remaining material in July. We understand that there are roughly 1,270 tonnes that remains to be bought in order for the state reserve to fulfil its target of 3,870 tonnes.  Prices have now begun to normalise and, given that the SRB has now established a reputation that it refuses to overpay for stock, prices are unlikely to increase during the next round of purchases.

Outside of China, Ucore has been working on a pilot plant to separate rare earths using Molecular Recognition Technology (MRT). During the month, the pilot test successfully separated a rare earth mixture into heavy and light material with over a 99.99% purity. The next phase will determine whether the technology is able to separate the heavy rare earths into its individual constituents, starting with dysprosium. If successful, this would represent a breakthrough in rare earth smelting. The potential for this technology could be to offer a cost-effective alternative to separating these materials in China.

India is looking to develop its rare earth industry in order to support its growing defence sector. Last month we reported that the Indian Government was seeking to amend its Atomic Mineral Concession Rules to enable private investors to develop the country’s monazite resources. The areas for development have now been reserved.

The Indian defence budget is set to increase by 8% y.o.y and the Modi plan is to develop India as a manufacturing hub for missile guidance systems and other optical instruments. As such the development of its rare earth reserves, along with its thorium and uranium deposits is regarded as an integral part of the country’s plan.

With respect to the end user market, the International Energy Agency (IEA) released its report revealing that electric cars now stand at 1 million vehicles and is expected to reach 1.26 million (+26% y.o.y ) by the end of the year. While the penetration rates of electric vehicles are still relatively small, below 0.1% in most countries, incentives are expected to expand, which should see upward pressure on demand.

Last month we discussed that the EU was focused on recycling permanent magnets from hard discs. This trend towards supporting recycling projects is expected to continue as the European Commission has stressed the importance of developing their ‘closed loop’ business models. To this end, the Prius hybrid vehicle is now reaching the ten year mark and the end of its useful life. Around 1kg of rare earth magnets is contained in each of these vehicles and we expect that recycling HEV’s will be the next round of recycling firms to receive grants and funding.

Looking at prices, we expect that prices across the board ( heavy, light, FOB, domestic) will remain more or less stable, with a slight downward bias (-1%) between now and the end of the summer period. In so far as the export market is concerned, we do not expect much in the way of buying activity until the end of the summer period in late August/September.


Lara Smith

Editor:

A Sr. Editor and Analyst for InvestorIntel and Managing Director and Founder of Core Consultants, Lara is an internationally recognized expert in the field of ... <Read more about Lara Smith>


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Comments

  • Outonthetiles

    Geomega out of Quebec separated all rare earth using “Electrophoresis technology” over two years ago. UCU seems way behind.

    From May 2014:

    -Simultaneous separation of REE and impurities;

    -Separation of the HREE and impurities achieved in a single step in the current process conditions;

    -Cerium constitutes half of the concentration;

    “Results show excellent simultaneous separation after one separation step without any recirculation. The number of steps required to purify all REE would be significantly less than the hundreds of steps currently required in solvent extraction. The efforts now shift towards increasing the concentration during the optimisation tests, which is scheduled to begin in June and expected to take up to 6 months. Material improvements will be disclosed throughout the process.” comments, President and CEO of GéoMégA.

    June 30, 2016 - 1:50 PM

  • D

    Ucore has 99.99% purity, Geomega has purities 60 80 90 in their separations. China can even get to those numbers with SX. Ucore brings 99.99% in a very small modular portable MRT Superlig machine that can be dropped in any mine site. There’s simply no comparing the Superlig machine.

    June 30, 2016 - 8:05 PM

  • Outonthetiles

    Sorry but you’re wrong. You’re talking about their hydrometallurgical results (May/2015)which is something completely different. Those numbers on their own are outstanding. As far as separation goes of individual rare earths GMA’s separation numbers are actually higher then UCU and full separation happens sequentially. UCU has yet to achieve full separation (taking forever ?!) let alone do it in ONE step to 100% purity (99.9% won’t cut it). This site is pretty quiet when it comes to GMA (wonder why? Lol) Do some DD on the company, lots going on right now. There certainly seems to be enough room out there for both techs if they can be scaled up and show a profit. Next few years should be exciting for both plays.

    From Feb/2014.

    -Multicomponent separation of REE attained in a single pass;
    -100% purity separation of HREE is achievable in a single pass in the current process condition;
    -100% purity separation of medium to LREE is achievable in two passes in the current process condition;
    -100% purity separation of LREE is achievable in a continuous loop in the current process condition.

    “Physics, when understood correctly, is predictable. The perfect binary separation of Nd and Pr with the currently limiting prototype equipment highlights a development team in control. We will ballpark a development timetable after the next testing program is completed.” comments Simon Britt President and CEO of GeoMegA”

    “Not only the separation occurs simultaneously, the slower and less abundant heavy REE are the easiest to isolate using our physical approach. A lot of process optimization and engineering work ahead of us but the confidence level in commercial scale-up is now very high”

    June 30, 2016 - 10:19 PM

  • D

    Even just skimming through Geomega news release, the upper management keeps on quitting on the company, even the person who you quoted on your reply. Sounds like a pump and dump company long shareholders are suffering from.

    Also, look and notice the dates and numbers you provided me with. On Feb/14, they got numbers of 100% you claim, which is at bench scale not even at pilot scale. Then on May/15, they went to test out another processing technology that did not deliver. Why would they change their processing? Something seems strange with that. There is much more than just %’s once achieved that management has to worry about. Size, cost, time, tailings, mobility, maintenance, etc. The market and producers will want the best and it looks like Geomega got couldn’t reel in one bite.

    This stock has ‘plummeted’ since those dates you provided and you want to gain attention for geomega over Ucore.

    Whereas, Ucore is staying afloat and even climbing despite a depressing REE market, has cash to get itself into production which is targeted for year end, the management has not quit on the company, instead has brought in more prominent names in the industry plus nobel prize scientist at IBC working on a very versatile separation machine (99.99+ surely ‘cuts it’) thats already been proven and never failed.

    This isn’t even the tip of the iceberg of why Ucore has its position of the leading REE junior. If you want to hold your GeoMega, thats fine, but don’t try to bring down UCU holders with you.

    July 1, 2016 - 10:57 AM

  • Art2004, Arthur Krauser

    Excellent reply AM.

    July 1, 2016 - 11:28 AM

  • Tracy Weslosky

    OK – throwing the flag down and a penalty on this debate, charging Outonthetiles for foul play. This has nothing to do with Lara’s update on the rare earth sector for June. I agree with D that we do not need to attack another company just because you like another company’s technology. Please also note that D – our also being placed in time out for sloppy analysis and conclusions on another company based on skimming through headlines. As such your comment has had that line deleted. This is to thank you both for caring about the rare earth sector and paying attention to evolving technologies, as sustainability initiatives are one of our favorite topics. Enjoy the holiday weekend in Canada and the United States.

    July 1, 2016 - 11:34 AM

  • D

    Hi Tracy, sorry if my post infringed the terms of commenting on the site. I love what you’ve done with investorintel. That being said, reading from the comment someone saying Ucore is far behind when in fact its clearly ahead of their company just looked like he/she was stepping on Ucore without merit. It’s a very exciting time for UCU shareholders that has gained a lot of interest in the REE space. In fact I’ve noticed any video investorintel posts about UCU has gained a lot of views. Ill let this argument slide. I hope to see among others news, updates, and expert opinions your site will have for Ucore.

    July 1, 2016 - 12:46 PM

    • Tracy Weslosky

      Thanks D. I get it, trust me….and for the record, I agree with you in that UCORE has invested a great deal in the development of the Molecular Recognition Technology, and they have a lot of support from the industry. We are very excited to see how MRT may be used in a wide array of technology metals, and we are enjoying Reed Izatt’s columns on InvestorIntel. Thank you for visiting, and for your support.

      July 1, 2016 - 1:32 PM

  • Outonthetiles

    Sorry Tracey, not sure what came over me coming on this site and mentioning another separation technology other then MRT. I should know better after being a member here for a few years. I know how this site works. It’s a big pumpfest for analysts. We don’t want to upset Jack or Reed they’ve got everyone drinkin’ the UCU kool aid.

    Happy Canada Day !!

    July 1, 2016 - 5:19 PM

    • Tracy Weslosky

      Tim – we do more to provide coverage on separation techniques in the technology metals sector than any other site in the world. The column you are referencing is from a Rare Earth Report that Core Consultants charges USD$3k annually for. Your welcome that Lara is sharing her analysis with you c/o InvestorIntel free.

      Furthermore, I am sorry that you have a “UCU trigger point” that has created a “meltdown” for you, but I am personally excited by the coverage we do on a wide range of processes from the Sileach to Purevap technology and perceive your jealousy of our coverage of the MRT process to be compromising your usual professional perspective. For the record, we are changing the site so that first and last names must be included when people post a comment. You will note that I have identified you by your first name, and if you comment again — will disclose your last name. Going to do this for everyone that behaves like a teenager on InvestorIntel.

      Now if you have a technology you prefer and would like to write a column on this, please give me a call. I know you have my number, and finally – with regards to your accusation. I think you owe me a massive apology. Perhaps you were drinking something else when you decided to write a comment. Believe me, we all have written things we wish we had not. Let’s use this as the catalyst for me insisting moving forward that first and last names be used on InvestorIntel. We have CEOs and top writers disclosing their names — Tim, it’s time you owned up to who you are and why you have this burr in your saddle. And thank you for picking on me, as I am your size and can handle you….

      July 5, 2016 - 8:42 AM

  • joe o

    Yo Out
    Really? Why are u trying to antagonize tracey? MRT sounds very promising to me. I admit Jack L has had other companies as flavor of the week (Texas rare earths, Tasman, Great western, rare earth elements) but it looks like ucore mrt good be the one left standing. Jack has always said there would be a “culling of the herd” I admit ucore markets well but it looks like MRT could have alot of potential. I dont think anyone on this board considers anything a home run of what has transpired last 4 years.

    July 2, 2016 - 5:26 PM

  • Lara Smith

    This is the first time I’m reading all the comments. I can’t believe that a market summary has sparked such a reaction! Stay tuned for next month’s summary or better yet, take out a monthly subscription.

    July 5, 2016 - 8:55 AM

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