Reviving the Domestic American Rare Earth Permanent Magnet Industry

Bad news for those who think that the shortage of rare earth processing in America can be resolved by the injection of “free” money (A/K/A subsidies [also known as taxpayer’s money]) into the “free” market as, drum roll, please, “tax credits,” grants, and loans. The Chinese have decided not to give up their decades-long, learned by trial and error as much as by science and engineering, dominance in rare earth processing. China has announced a (further) tightening of its strict laws against the export of rare earth themed industrial technology. In particular, this means that technologies for producing rare earth metals, alloys and MAGNETS may not be shared with ANY foreign (to China) entity as a matter of national security!

Indeed, most of the mining, refining, processing, and fabricating technology for rare earths and their commercial products originated in Europe and the United States between the end of World War II and the early 1980s, but, at that time a combination of newly exploited deposits in China and the need to lower costs for the rapid expansion of the rare earth permanent magnet industry drove rare earth processing and manufacturing engineering to China and Japan.

By the end of the twentieth century, the rare earth permanent magnet manufacturing industry had essentially vanished from the West. By two decades later, it has become even more narrowly confined to China.

Scientists in the West (more and more of whom are of Asian origin) certainly understand the science behind rare earth permanent magnets. Still, the manufacturing engineers who produce products based on this “science” are a vanishing breed. Since they have had little or no employment in the specialty of the mass production of rare earth permanent magnets since the late twentieth century, their numbers have diminished to below replacement level; in other words, the specialty is dead.

Of course, none of this is of interest either to our technologically illiterate governing class (the self-serving aristocrats previously known as politicians), or to their subservient academic mob of backbiting “advisors.” The Field of Dreams, also known as the U.S. Congress, goes by the mantra, “We will fund it, and it will happen. So, let it be enacted, so let Wall Street prosper.”

But, no amount of money, high fashion, good dining, or good looks (Have you ever seen the staffers in the House and Senate office buildings or the young Wall Streeters?) can substitute for legacy engineering, where the older experienced generation of manufacturing engineers has nurtured a younger generation to carry on and avoid the inevitable mistakes and costly dead ends so common to the well educated but inexperienced. Of course, engineering is of no interest to the table-top and bench-scale “scientists” who plague our society and influence our governors with their innovation and disruptive technology!

The tiny remaining rump of Western rare earth permanent magnet makers are mostly smoke and mirror specialists; they buy magnet alloy “blanks” from Chinese manufacturers and finish them into end-user forms in their non-Chinese home countries. Thus, this makes such products count as “domestic.”

I don’t see how such magnets can pass the “non-Chinese produced mandate of the IRA, so users of them will not qualify for the Bidenomic “tax credits.” And, I suspect, that if the U.S. tax rebate (subsidy) on domestic magnet production now before Congress is enacted, then China will simply terminate the sale of such blanks to foreigners, or for export, cutting off the scam of importing such blanks into the U.S. and calling the magnets then produced domestic.

What’s going to happen if and when the Chinese government declares such exports to simply be “technology” forbidden for export as an impediment to (Chinese) national security?

I think we’re about to find out.

Defense Metals Corp. (TSXV: DEFN | OTCQB: DFMTF), known as ‘Defense Metals’, fully owns the Wicheeda Rare Earth Element Project, situated 80 km northeast of Prince George in British Columbia, Canada. This project is not only strategic but could emerge as a globally recognized hub for the production of critical magnet rare earths, specifically neodymium (Nd), praseodymium (Pd), cerium (Ce), and lanthanum (La). To put this into perspective, Defense Metals envisions that the Wicheeda Project might churn out 25,000tpa of REO, potentially accounting for roughly 10% of the world’s current output.

Recent Enhancements in the Wicheeda Resource Estimate

Come September 12, 2023, Defense Metals announced a significant expansion of the Wicheeda resource: a growth of 31% in tonnage and 17% in contained metal since the 2021 estimate. Moreover, the Total Measured and Indicated (M+I) Mineral Resources now touch a whopping 34.2 million tonnes with an average of 2.02% TREO.

Thanks to its geological structure, the Wicheeda Project is primed for a straightforward open-pit operation, accompanied by parasite/bastnaesite/monazite metallurgy, simplifying the processing phase.

Schematic showing the Wicheeda deposit and open pit block model (noting higher grades near surface)

Untapped Potential at Wicheeda

Just a week earlier, on September 5, Defense Metals unveiled new exploration targets within the Wicheeda REE Deposit. They identified two previously undetected linear radiometric anomalies, each approximately 40 meters wide and extending around 250 meters northwest from the core Wicheeda REE deposit. Defense Metals’ Director, Kristopher Raffle, P.Geo., remarked, “After a thorough review of the geophysical data juxtaposed with our revamped Wicheeda 3D geological model, the potential for undiscovered carbonatite bodies came to light. We’re keen on drill testing these anomalies.”

Further enhancing its value proposition, the Wicheeda Project boasts easy road accessibility and is close to a major deep-sea port, power transmission lines, a gas conduit, and a critical rail line.

When stacked against leading rare earth producers, while the Wicheeda Project may have a lower grade, it’s planning to roll out large-scale production – all in the secure environment of Canada.

Wicheeda Project in comparison to leading rare earths producers

Upcoming on Defense Metals’ agenda is the Preliminary Feasibility Study (PFS) set for H1 2024, followed by a comprehensive Feasibility Study (FS) in the latter half of the year. By 2025, their focus will shift towards optimizing and ramping up flotation and hydromet pilot plants.

Electric car sales are forecast to surge in the years ahead requiring ever increasing amounts of magnet rare earths

In Conclusion

The appetite for NdPr, key magnet metals, has been on a steady incline, further fueled by the escalating demand for top-tier permanent magnet motors employed in electric vehicles and wind turbines.

Transitioning smoothly from exploration to development, Defense Metals’ Wicheeda Project stands out with its rich NdPr resource. Stakeholders and potential investors are keenly looking forward to the H1 2024 PFS for an in-depth look at the project’s financial prospects.

Currently, Defense Metals Corp. has a market capitalization of C$50 million. This is definitely a venture to closely monitor in 2024.

The common wisdom among the elites in Western capitols and among the “captains” of the Western industry is that the critical minerals supply issue is one that can be always solved by an increased allocation of capital, better known as “raising the offering price to increase the supply.” This is nonsense, for critical technology minerals, but a person can realize this only if he has studied and gained a basic, general, understanding of geology, mining, and economics and has the ability to reach logical conclusions based on reproducible, independently verified data. The absolute quantity of natural resources available to humanity is limited, first and foremost, by geology and then by technology and, finally, economics. It’s not how much money it would cost, but rather how much of our productive economy we are willing to give over for the extraction, refining, processing, and fabrication of products based on lithium, or cobalt, or the rare earths, or all three and even more of these uncommon technology metals.

Recently, it has come to light, that one nation, China, beginning decades ago, recognized the need to locate, obtain control over, marshal, and develop the chemical and metallurgical infrastructure to support the domestic production and/or refining of secure, sufficient, sources both of critical technology metals’ minerals and of structural metals’ minerals. The success of China’s “industrial policy” has now been made apparent and is manifested by the impact of this policy’s success on geopolitics and global industrial supply chains.

The natural resources of non-fuel minerals accessible by known technology are limited to “deposits” defined as being those that are above a certain concentration (called the “grade,” which differs for each mineral from which chemical elements are extracted), and are at an economically significant extent. Deposits must also be in a location where they are accessible by road, sea, or rail, have sufficient fresh water available, and have the necessary supply of electricity. Junior mining ventures almost always tout “discoveries” of potential “deposits, “but purposely confuse the two to entice investors.

The choices of which ones of the chemical elements are critical for a particular nation differ according to a nation’s needs and its (that nation’s) importance to other nations’ security and trade.

The United States’ concession of the title, The World’s leading manufacturing nation, to China has radically changed the need for and the dimensions of its critical minerals needs. Many of my colleagues and the journalists who are covering this story always note the growing list of America’s total reliance on imports of critical minerals published annually by the United States Geological Survey (USGS), but they never mention the adjective that comes to the mind of any of us with a legal education when they hear the word, reliance. It is a detrimental reliance!

To emphasize where China is now, July 2023, with regard to self sufficiency in the rare earth metals needed to manufacture the rare earth permanent magnets needed by the global battery electric vehicle industry, and where China is going from here, I note that I received, earlier this week, a copy of a report entitled, “China Rare Earth Information,” published by the Chinese Society of Rare Earths. This report was described as a review of China’s rare earth industry for the 2^nd quarter of 2023. It is an eye-opening account of the size of the Chinese rare earth permanent magnet industry, which acts as a giant vertically integrated whole in many regards.

In the United States, in sharp contrast, industrial subsidies take the place of industrial policy as the politically correct choice. Washington’s bureaucrats only caucus with each other, or with academic grantees, and in this way obtain almost no practical knowledge of the supply chains for manufacturing industries. Grants are handed out almost solely on financial, not sector competency, considerations and thus fail to go far enough upstream to where innovation resides.

Just one project jumped out at me from the report. A Chinese company is building a 15,000 year (!) rare earth permanent magnet factory to serve the OEM automotive industry. This new plant will begin operation this coming December. In its history, the North American rare earth permanent magnet industry has not produced anywhere near the volume output in all the years of its existence as this one new Chinese plant will produce. And note that China’s current installed capacity to manufacture rare earth permanent magnets is now over 200,000 t/year.

As of this writing (July 18, 2023) North American companies produce only a few hundred tons per year of rare earth permanent magnets, and that is based on imported Chinese magnet alloy.

Ford Motor Company (NYSE: F) and General Motors Company (NYSE: GM) have both stated that they plan to produce 2,000,000 battery powered electric vehicles annually by 2026. If just these 4,000,000 vehicles each had one rare earth permanent magnet motor this would require 10,000 tons of rare earth permanent magnets.

To the best of my knowledge no where near any such amount, 10,000 t/year is planned to be produced domestically by 2026, and no significant part of the necessary supply chain for such an amount is under construction or even planned at that level of output for 2026.

To qualify for the tax credit under the IRA, the value of the raw materials and finished goods in a car must have been majority added in the United States or a country with which the United States has a free trade agreement. Under no circumstance can that country be China.

Subsidies are a tax, and even in War, they are at best a short term solution.

The United States needs to develop a secure domestic rare earth permanent magnet vertically integrated manufacturing industry.

So far, all we’ve heard about this is nonsense. It’s time for common sense to prevail.

“Neo Performance Materials’ organization today is the closest that North America has yet come to a totally vertically integrated rare earth permanent magnet supplier. Now, the company has acquired and is moving to bring a significant rare earth deposit in Greenland into production. When that occurs, it will be the first company outside of China, ever, to be a totally vertically integrated manufacturer of rare earth permanent magnets. We should all be watching Neo Performance as if our (self-sufficient and secure) independent economic lives depend on it.” — Jack Lifton, Co-Chairman, Critical Minerals Institute

Neo Performance Materials Inc. (TSX: NEO) (“Neo”) produces specialty materials that incorporate specialty materials that are mostly rare earth based, but also include other technology metals, such as gallium and cobalt, all of which are necessary in its feature product, bonded rare earth permanent magnets. Neo is the only company in the world that operates dual supply chains inside and outside of China for rare earth elements (REE) separation and REE advanced materials. Neo owns the only operating commercial rare earth separation facility in Europe, located in Estonia. Neo operates globally with sales and production across 10 countries.

Neo’s advanced materials are essential components of many of the world’s fastest growing cleantech applications

Source: Neo company presentation

Neo’s growth plans and acquisitions

Neo continues to grow and expand its business and now has several projects in the pipeline.

These include the following:

1. Growth of Neo’s existing operations – Magnequench (a global leader in bonded neodymium-iron-boron (NdFeB) magnetic powders and magnets), Chemicals and Oxides, and Rare Metals (gallium, indium, rhenium, tantalum, niobium, and hafnium).
2. An EU Magnet Manufacturing Plant with ground breaking in June 2023 and planned production of sintered rare earth magnets in Estonia to begin in 2025.
3. Controlling interest (90%) in newly acquired SG Technologies Group Limited (“SGTec“), one of Europe’s leading advanced, specialty manufacturers of rare-earth-based and other high-performance magnets.
4. Various rare earths supply chain projects and agreements – Sarfartoq Project exploration license in Greenland, Yangibana Project in Australia (the owner Hastings Technology Metals Limited (ASX: HAS) is Neo’s largest shareholder so a supply arrangement looks highly probable, Koppamurra Project in Australia non-binding MOU for off-take of potentially 50% of the planned production of mixed rare earth carbonate, supply agreement with Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR) (from USA) of mixed REE carbonate.

Q1 2023 Financials weaker due to weaker pricing dynamics

Some investors may have been disappointed that Neo’s Q1, 2023 financials were weaker than a year earlier. Consolidated revenue was US$135.5 million in Q1, 2023, compared to US$166.3 million for the same period in the prior year.

However, it needs to be factored in that the key magnet rare earths prices have fallen heavily over the past year (neodymium is down 50.21%).

Looking on the positive side Neo still has a very healthy balance sheet with cash and cash equivalents of US$145.7 million (as of March 31, 2023) and Neo generated positive net cash of US$12.2 million in Q1, 2023.

The fall in neodymium prices in the past year is fairly similar to the lithium price fall. Both had a huge run-up, then slower China EV sales in early 2023 sent prices crashing as manufacturers chose to wind down inventory and delay purchases until prices were back at low levels. All of this bodes well for some stabilization of prices now and potential to move higher from here if demand accelerated in H2, 2023.

Investors can listen to the Neo Q1, 2023 earnings call here. Neo’s President & CEO Constantine Karayannopoulos discusses the causes for lower magnet rare earths demand (China property slowdown, higher interest rates impacting negatively on wind farms, China EV sales slowdown) and the impact of lower rare earths pricing and the Company’s growth plans. He says “I believe we are nearing the end of that restabilisation” in rare earth prices. Meaning the rare earth price falls are near the end.

Neodymium 10 year price chart

Source: Trading Economics

Closing remarks

Neo has just weathered a challenging past few quarters caused mostly by rare earths price declines as China EV sales slowed and manufacturers reduced inventory. Despite this Neo finished Q1, 2023 in a very strong cash position and continues to make progress on their growth plans.

As the macro picture hopefully starts to improve in H2 2023, especially for China EV sales, Neo should once again be a winner of the macro trend of increased global use of the magnet rare earth products and the specialty rare metals, that are all needed to drive the cleantech revolution.

Neo Performance Materials trades on a market cap of C$377 million.

The twenty-first century began with an unprecedented (outside of war) mammoth growth of demand for the ores of the structural metals (a/k/a base metals, such as iron, aluminum, copper and the alloying elements for steels). Brazilian, Australian, and Indian iron ore miners whose American, Japanese, and European markets had matured were thrilled. Chile, Jamaica, Africa, and Polynesia prospered. China, the source of the new demand, just grew and grew into the world’s newest manufacturing center.

The ironically named “progressives” of the West are those who think that progress is attainable only under a benevolent central government run by elites dedicated to prosperity for all. Of course, this definition makes the logical error of self-reference, progress is whatever the progressives say it is. The simple fact that progress, defined as an uplifting of all, is only possible through wealth creation and its wide distribution and that, by far, the best system for doing this, so far created, has been free market capitalism, has been rejected by the self-serving “elites” who today hold elective office and control the permanent civil services of the West.

The fact that today’s Western elites consider only themselves, their narrow clique, worthy of defining, being the beneficiaries of, and promoting progress has not escaped the attention of the 90% of the world that does not live in the United States or Europe.

In the nineteenth and twentieth centuries, the use of military power by European states was after the World Wars followed by the economic domination of the United States to continue to guarantee the flow of cheap mineral resources to the self-serving progressive fantasists of the West. That era is closing. The revolt against their exclusion, first by the Germans and the Japanese, was to mimic the imperial style of Britain and France. This failed in both instances as did the similar Russian (Soviet) attempt, but they bought the United States a century of world domination. This era is now closing as the progressive fantasists have destroyed its ability to create and fairly distribute wealth.

For the last generation the financializers who replaced the engineers as CEOs of American and European OEMs have moved the majority of manufacturing off-shore and witlessly (not unwittingly) caused the metals processing and fabricating industries to relocate closer to their raw material sourcing and new end-users. This second move, of the minerals and metals processing industry, perhaps even more than the move of the OEMs, was an unintended gift to a China that no one foresaw as a global industrial powerhouse aborning.   

The perspective of necessary time must be examined to understand the deleterious effect of Western financialization on commodity production and pricing. There is an excellent example of this in the attempt to “reshore” a total rare earth permanent magnet supply chain.

The massive Chinese dominance in the total supply chain to produce rare earth permanent magnets did not occur overnight, and it will not and cannot be rectified (in the sense of being made irrelevant) in any short period of time. By which I mean years. In fact, China controls the market for rare earth permanent magnets, because it first built or acquired control over the overwhelming majority of rare earth minerals on this planet. This occurred simultaneously with the West giving over to China the technology to separate the mixed rare earths extracted from the ore into individual rare earth compounds. This was followed by the technology to make rare earth metals, alloys, and permanent magnets. This overall agenda, supported by the building, in China, of a strong and focused educational system to support a world-class technologically advanced nation, has established in China a, long-term, holistic approach to acquiring, developing, supporting the mass production of, and deploying state-of-the-art technology to its people for the last 25 years. What does this mean for the West?

An example of the approach taken by America, the former leader, in technology and its deployment is illustrative: There are two separate domestic (North) American markets for rare earth permanent magnet (REPM) enabled devices; the military and the civilian. Dishonest attempts at promoting and marketing rare earth projects to investors have confused not only the low information “journalists” who cover this story but also the self-designated rare earth experts, in particular the ones who refer to their work as “intelligence.”

The military “need’ for REPMs can be defined very simply. The lighter the weight of the components of a weapons system the larger can be the weight of the explosives in the weapons. Rare earth permanent magnet motors (REPMMs), are also, by weight, the most efficient converters of electricity to mechanical motion of all types of electric motors. Thus a warship whose propeller shaft is the rotor of a large electric motor is easier to maintain than one that is the end of a gear train from an immense diesel engine.  Better to use the diesel engine to generate the electricity for the drive motor and have (lithium-ion) batteries for backup during diesel engine service or in case of breakdowns. And what about those electromagnetic catapults on an aircraft carrier? REPMMs are a lot easier to maintain than AC motors and a battery backup can save an expensive aircraft and its pilot’s life in an emergency where the electricity supply from the reactor/generator is interrupted. And the fin actuators on a “smart” bomb… The actual demand for REPMMs by the U.S. military is classified, but in 2013 it wasn’t, and the number bandied about then was 1000 mt/year. The coming into service of new stealth fighters and direct electric propulsion ships and electromagnetic catapults since then has surely increased the demand for REPMMs by the military. Let’s say then that it must be 3000 tpa by now. Oh, and I forgot to mention all of these active military uses for REPMMs in extreme conditions mean that they run hot. This means they must be of the type that uses the very rare rare earths, dysprosium and terbium, as well as the even rarer metal, gallium, in their construction. As of this writing 100 percent of the world’s supply of Dy and Tb is processed in China.

Now let’s look at the North American civilian market for REPMMs. An internal combustion, fossil fueled vehicle produced in North America today has between 25 and 50 micromotors. All of which are REPMMs. The total demand for REPMs to construct these motors is 0.5kg/vehicle. Even so, in a typical model year, the domestic American OEM automotive industry uses 8,500 mt of REPMs. But now, a major change is in the wind. A drive motor for a battery powered electric vehicle, if it is of the REPMM type, uses 2.5 kg of REPM! Thus each BEV that uses a REPMM for traction (drive) requires 5-10x the amount of REPM that an entire ICE powered vehicle requires!!

What began as a financial system to maximize profits has now created a dual market in critical minerals, the Chinese and the Rest of the World, (C+ROW). The financializers, their work done and rolling in the profits of their selfish misdeeds have now returned the problem of the security of supply chains back to the engineers. The dual commodity markets though will sharply reduce profits and the West’s capital is in the hands of those whose only interest is in the accumulation of money not the creation of wealth.

The military can pretend that increased prices for the support of domestic self-sufficiency don’t matter by subsidizing the military-industrial complex with “cost-plus” awards. The consumer economy does not have that luxury.

The latest existential crisis (the first such crisis was the ancient fear of God’s wrath by floods), “climate change,” has now pitched this dual commodity pricing problem to the forefront.

There is not enough of the critical metals for EV batteries and drive motors, not already under the control of China, to convert the global fleet of ICE vehicles to battery electric operation. Nor can there ever be.

China, alone, is and will remain self-sufficient in the critical metals necessary to convert its domestic ICE fleet to BEV operation and to produce enough stationary storage to be able to convert a large part of its domestic energy production by intermittent sources, wind and solar, to reliable maintenance of the grid.

The ROW (rest of the world), if it adopts the mandates of the Green Revolution, will have to choose winners and losers. There can be enough lithium, neodymium, praseodymium, dysprosium, and terbium produced outside of the control of China for some countries to achieve a significant fraction of their electricity by non-fossil fuel methods and the conversion of some of their transportation to electric operation. But those countries will have to together or individually create markets for the production and processing of those metals independent of Chinese control and pricing. This means permanent subsidies to miners, refiners, fabricators, and consumer and military product manufacturers. This means a lowering of living standards to pay for the subsidies.

Perhaps it’s time to rethink the Green New Deal. Are the consequences worth the decline of the West? Is climate variation really an existential crisis? And, how much longer can we ignore 90% of the world’s population that has most of the critical minerals we need within their control??

Dynamic Reading – Is this the prodigy of today’s AI Report Writing phenomenon? I have been asked to write my thoughts on the latest news about potential rare earths technology bans from China. The first reference I received was written by Shunsuke Tabeta, a staff writer for Nikkei Asia: China weighs export ban for rare-earth magnet tech

The second reference I received was written by Jingyue Hsiao of DIGITIMES Asia, Taipei. This was in response to the Nikkei Asia news: A rare earth war simmers as China reportedly to impose export ban

I then received the preparatory title of a response from one of the InvestorIntel journalists: “What happens next if China bans rare earths technology needed to process rare earths and to make high-performance magnets”.

Lessons from the past

Got me thinking about how people’s reading styles, capabilities, and mental processes appear to be controlling how they understand the reading matter and therefore influence the way they report or comment. Reminded me of a few years back when my granddaughter wasn’t achieving at high school.

I purchased National Geographic subscriptions for us both and commenced a weekly telephone hook-up routine. We took turns investigating each article, with one being the interviewer developing the questions and the other, being the interviewee who had to answer the questions. Who, What, When, Where? With those satisfactorily answered you could then ask the key question: Why? Look at what this does. It focuses the mind to search for factual information BEFORE you look for answers that may be swayed by things such as bias, agendas, or less well-informed previous interactions. It also aids in memory retention.

Unpacking the articles

Look at the Nikkei headline: “export ban”. The DIGITIMES headline reads: “Rare earth war”. The InvestorIntel “What happens next”. These all point to and highlight the differences in the author’s history, experience, and understanding of the topic or their editorial bent.

I thought back and my favorite primary school teacher came to mind. She used these Who, What, When, Where, and Why prompts when I was learning to read. No, not read but understand. So Mrs. long-since-forgotten surname, thank you for your skills. But, I’ll lay claim to the Dynamic Reading title. BTW, it’s about now I’m expecting some hi-tech whiz kid to jump in and say that this tool is similar but opposite to the AI report writers that aggregate multi-article “Who, What, When, Where, and Why” information. Strange place the past!

So I’ll use Dynamic Reading to get to my response to the articles.

What is really being written

Note already the difference in the What. Banning Rare earth magnet technology versus Rare earth elements. So, do I have enough to comment? To provide a Why? Well, not from that information, I need more.

The DIGITIMES Asia article cites Quartz as reporting that China is trying to defend its dominance in rare earths by increasing investments at home and abroad. This position is not supported by the Off-Market Sale of the East China Exploration (ECE) Group of their holdings in Arafura Resources Ltd. (ASX: ARU). Especially since Arafura is well progressed on its Nolans Project development schedule. And then Lynas Rare Earths Ltd. (ASX: LYC) is very well developed on their North American value-adding schedule.

To be honest, I have always had difficulty in developing an overview of how China aggregates and controls the Rare Earth business in China. Although the quotas and technology strategies appear to be working well on paper (their paper), it is not without some resistance from the regions that want more self-governance over their resources. Go no further than looking at the resource development battle between the light rare earths in Baotou, the heavy rare earths in Guangzhou, and the historic separation plants around Nanjing.

My conclusions

My take? Well, I would question: Is the news real or not? Is it part of a grander plan? I am sure that China can see the many developments occurring outside of China. And I am sure that China sees the projected growth in rare earths that are needed and coming from developing towards a Net Zero Carbon future. And I am sure that China must acknowledge that its pre-eminent position is not so much as under threat but that it will lessen as the whole of the world looks to resource development for a global benefit.

So, my feelers are out for more information. Difficult though these days and especially now that TikTok bans are muddying the relationships. Let’s just hope for everyone’s future that China’s People’s Liberation Army (“PLA”) venture into the Straights of Taiwan is not on, or part of, any strategic China agenda.

Oh, my granddaughter? She went from the bottom quartile of her class to be in the top 10%. And is now running her own business. Simply by being taught how to read.

In this InvestorIntel interview, Tracy Weslosky talks with Critical Minerals Institute’s (CMI) Co-Chairman Jack Lifton about why Appia Rare Earths & Uranium Corp.’s (CSE: API | OTCQX: APAAF) acquisition of a Brazilian rare earths ionic clay project, if finalized, will be an “intelligent vertical integration by Appia.”

Speaking about Appia’s Alces Lake Project as a “premier deposit of neodymium-rich monazite in North America,” Jack explains how the new Brazilian project will be synergistic with the Alces Lake Project. Jack discusses how the new Brazilian project can be a low radiation source of critical heavy rare earths such as dysprosium and terbium.

Speaking about the upcoming Critical Minerals Institute Summit II (CMI Summit II) to be held in Toronto on June 14-15, 2023, Jack discusses that he intends to address if the North American industry can become self-sufficient in critical minerals. He goes on to discuss how the shortage of experienced competent mining engineers, in some ways, is a bigger problem for the Western world than the supply of critical minerals.

To access the full episode, click here.

Subscribe to the InvestorIntel YouTube channel by clicking here.

About The Critical Minerals Institute

The Critical Minerals Institute or CMI is an international organization for critical mineral companies and professionals focused on battery and technology materials, defense metals, and ESG technologies in the EV market. Offering a wide range of B2B service solutions, the Critical Minerals Institute hosts both online and in-person events designed for education, collaboration, and service solutions that address critical mineral challenges for a decarbonized economy.

To learn more about The Critical Minerals Institute, click here.

In this InvestorIntel interview during PDAC 2023, Chris Thompson talks with Leo Power, Interim President, CEO, and Chairman of Search Minerals Inc. (TSXV: SMY | OTCQB: SHCMF) about its rare earths project in Newfoundland and Labrador.

Leo discusses the recent announcement that the Canadian government has granted $5 million towards building the Company’s $9.3 million demonstration plant to test its direct extraction technology to separate rare earths from ore.

He provides an overview of Search’s two significant deposits, Deep Fox and Foxtrot, and its 2022 Preliminary Economic Assessment (“PEA”) that outlined a 26-year mine life to produce the valuable magnet rare earths – neodymium (Nd), praseodymium (Pr), terbium (Tb), and dysprosium (Dy).  

Finally, Leo outlines catalysts for this year that includes starting to work on the Feasibility report and further regional exploration.

To access the full InvestorIntel interview, click here.

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About Search Minerals Inc.

Search Minerals is focused on finding and developing Critical Rare Earths Elements (CREE), zirconium (Zr), and hafnium (Hf) resources within the emerging Port Hope Simpson – St. Lewis CREE District of South East Labrador. Search controls two deposits (Foxtrot and Deep Fox), two drill-ready prospects (Fox Meadow and Silver Fox), and numerous other regional rare earths (“REE”) prospects, including Fox Valley, Foxy Lady, and Awesome Fox, along a 64 km long belt forming an REE District in Labrador. Search has completed a preliminary economic assessment (“PEA”) report for Deep Fox and Foxtrot. 

Search Minerals has continued to optimize its patented Hydrometallurgy Direct Extraction Process technology with support from the Department of Industry, Energy and Technology, the Government of Newfoundland and Labrador, and from the Atlantic Canada Opportunity Agency. It has completed two pilot plant operations and produced highly purified mixed rare earth carbonate concentrate and mixed REO concentrate for separation and refining.

Search Minerals was selected to participate in the Government of Canada Accelerated Growth Service (“AGS”) initiative, which supports high-growth companies. AGS, as a ‘one-stop shop’ model, provides Search with coordinated access to Government of Canada resources as Search continues to move quickly to production and contribute to the establishment of a stable and secure rare earth element North American and European supply chain.

To learn more about Search Minerals Inc., click here.

Disclaimer: Search Minerals Inc. is an advertorial member of InvestorIntel Corp.

This interview, which was produced by InvestorIntel Corp., (IIC), does not contain, nor does it purport to contain, a summary of all the material information concerning the “Company” being interviewed. IIC offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This presentation may contain “forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking statements are based on the opinions and assumptions of the management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Prospective investors are urged to review the Company’s profile on Sedar.com and to carry out independent investigations in order to determine their interest in investing in the Company.

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In this InvestorIntel interview during PDAC 2023, Byron W King talks with American Rare Earths Limited’s (ASX: ARR | OTCQB: ARRNF) President of North America Melissa ‘Mel’ Sanderson about developing two large rare earth deposits in North America. Discussing how key magnetic rare earths such as neodymium and praseodymium comprise 27% of the deposit at their Halleck Creek Rare Earths project in Wyoming, Mel provides an update on their recent high-grade assay results from the project, with a NI 43-101 resource planned to be released by the end of March or early April and a PEA by the end of the year.

Mel goes on to discuss the upside potential at American Rare Earths’ scandium-rich La Paz rare earths deposit in Arizona where they already have a 170.6 million tonnes JORC compliant resource and are planning to grow the resource through additional drilling. Providing an update on their US Government funded R&D partnerships with the Lawrence Livermore National Laboratory and other university research partners, Mel discusses how American Rare Earths is leading the way to cleaner, greener processing and separation technologies for rare earths.

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About American Rare Earths Limited

One of the only ASX-listed companies with exposure to the rapidly expanding US market, American Rare Earths is developing its 100% owned magnet metals projects, La Paz in Arizona, and Halleck Creek in Wyoming. Both have the potential to be among the largest, rare earths deposits in North America. The company is concurrently evaluating other exploration opportunities while collaborating with US Government supported R&D to develop a sustainable domestic supply chain for the renewable future.

To know more about American Rare Earths Limited, click here.

Disclaimer: American Rare Earths Limited is an advertorial member of InvestorIntel Corp.

This interview, which was produced by InvestorIntel Corp., (IIC), does not contain, nor does it purport to contain, a summary of all the material information concerning the “Company” being interviewed. IIC offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This presentation may contain “forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking statements are based on the opinions and assumptions of the management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Prospective investors are urged to review the Company’s profile on Sedar.com and to carry out independent investigations in order to determine their interest in investing in the Company.

If you have any questions surrounding the content of this interview, please contact us at +1 416 792 8228 and/or email us direct at [email protected].

At Tesla’s Investor Day on March 1, 2023, Franz Von Holzhausen, Lead Design Executive at Tesla Motors (Nasdaq:TSLA), announced that its next generation of electric motors would not use rare earth materials. With Tesla’s current dominance in the electric vehicle (“EV”) market, this shift could have a significant impact on the rare earth market and some rare earth stocks were down on the news. Here is what he said:

“But at Tesla efficiency means more than just reducing how much energy the cars use it’s about how we develop how we manufacture how we refine and how we scale the powertrain. Now the model 3 and Y powertrain is a great example of this broader meaning of efficiency. So since we launched it back in 2017, we’ve continuously improved that powertrain and the factory that builds it so the Drive Unit the engine of the car is lighter for the same power. We use 25 percent less heavy Rare Earth than when we started and the powertrain Factory which is behind me today is 75 percent smaller and 65 percent cheaper than the one that we originally built. And what I really want to emphasize is that we did all of this without compromising our cars are just as powerful. They go just as far, and they cost the same or less and the factories have the same output.“

“There’s one more thing that I want to highlight. So, I talked about how we had reduced the amount of rare earth in our powertrains and, as the world transitions to clean energy, the demand for Rare Earth is really increasing dramatically and not only is it going to be a little hard to meet that demand but mining that rare earth it has environmental and health risks, so we want to do even better than this. We have designed our next Drive Unit which uses a permanent magnet motor to not use any Rare Earth materials at all. So how does all this fit into the master plan we can make lower-cost products that are still efficient and compelling, and we can make them at scale. We’re going to use less constrained Commodities.”

Perspective lost! Tesla is not the driver of the global demand for rare earths

Tesla is not the driver of the global demand for rare earths; the global OEM Internal Combustion Engine (“ICE”) automotive industry is the principal driver of demand for rare earth permanent magnets followed by or paralleled by the direct drive wind turbine electricity generation industry (at the moment), the Global OEM EV industry, and the global military industry.

Tesla is an example, even perhaps a symbol of something. It is not the thing itself. The thing is the expanded use, albeit in very small quantities, of scarcely produced, due to costs, technology metals that enable miniaturization and thus widespread consumer use of information and entertainment technologies.

Rare earth permanent magnets, which have allowed the miniaturization of electric motors, are used today primarily for convenience and style accessories in cars, power windows, power seats, windshield wiper motors (ok, this is a safety necessity), audio loudspeakers, and power steering. Their use in drive motors for vehicle power trains is not necessary and never has been.

Using rare earth permanent magnet motors in drive trains increases the efficiency of the power train (over the use of AC motors) and lowers the weight of the vehicle. Both factors increase range, the real target of using rare earth permanent magnet drive motors.

Wind turbines drive rare earths demand

Direct drive wind turbine generators, today about a third of the production of these gargantuan devices, are the largest demand drivers for rare earth permanent magnet motors (in this case, generators) after the OEM ICE automotive industry.

The, as yet, small OEM EV industry is catching up due to scale. An average EV using rare earth permanent magnet drive motors such as today’s Teslas requires between 5 and 10 times as much rare earth permanent magnet material as an ICE-powered vehicle. So, if and when the EV market segment reaches 10% of the ICE segment and if all EVs use rare earth permanent magnet drive motors then EVs would double the current demand for rare earth permanent magnets by the global OEM automotive industry.

China set to double rare earths capacity in 2 years

I think we can all see why the Chinese rare earth permanent magnet manufacturing industry is on a course to double its capacity by 2025!

Teslas or any car or truck made outside of China will be hard-pressed to get non-Chinese (or perhaps even Chinese) sources of rare earth permanent magnets after 2025. So will wind turbine generator manufacturers and even small accessory motor and loudspeaker makers.

China today controls the production of rare earths, rare earth permanent magnets, and rare earth permanent magnet motors. Deglobalization of trade without a focused and funded non-Chinese rare earth permanent magnet production industrial policy just cements China’s dominance of this industry.

Elon Musk is just reading the tea leaves better than his cohorts in Detroit and Stuttgart.