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Rowena Smith sits down with Jack Lifton on ASM’s ‘Mines to Metal’ Advantage in Supplying Rare Earths

During an interview at PDAC 2024 in Toronto, Jack Lifton of InvestorNews sat down with Rowena Smith, the Managing Director of Australian Strategic Materials Ltd. (ASX: ASM), to delve into the company’s position and strategic initiatives within the rare earths and permanent magnet supply chain. Smith elucidated ASM’s comprehensive strategy, spanning from “mine to metal,” highlighting their advanced development project in Dubbo, New South Wales, and their operational metals plant in South Korea. The company has successfully commenced production of neodymium praseodymium (NdPr) metal and neodymium iron boron (NdFeB) strip alloy, which are essential components for sintered magnets used across various technological applications. Smith proudly noted ASM’s pioneering role as the first Australian entity and one of the few globally to achieve such depth in the supply chain outside of China, emphasizing the critical nature of their work in diversifying the global supply chain and reducing dependence on single-source suppliers.

Smith also detailed the Dubbo Project’s progress, underlining its pivotal role in ASM’s mine-to-metals business model for supplying rare earths and critical minerals. Funding and securing off-take agreements are current priorities, with the project’s engineering, exploration, and permitting stages already completed. Smith’s participation in a U.S. trade delegation and discussions with U.S. government departments reflect a strong international interest in funding the project. These interactions highlight the alignment between Australian and U.S. interests in establishing a sustainable and transparent critical minerals supply chain. ASM’s engagement with various U.S. government agencies and the passage of legislation recognizing Australia as a ‘domestic source’ for U.S. Department of Defense procurement showcases the international efforts to bolster critical mineral supply chains outside of China. The company’s ongoing discussions for offtake agreements and advancements in metallization capability at the Korean Metals Plant further underscore ASM’s commitment to securing a robust position within the global supply chain of rare earth metals and alloys.

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About Australian Strategic Materials Ltd.

Australian Strategic Materials (ASX: ASM) is a vertically integrated ‘mine to metals’ producer of critical metals for new growth industries, high technologies and sustainable energy solutions. ASM operates a metals plant in in Ochang, South Korea which is currently producing critical metals and alloys to customer specifications. The initial production focus is on neodymium praseodymium (NdPr) and neodymium iron boron (NdFeB). Currently, ASM sources the rare earth oxides for the production of the critical metals at its Korean Metals Plant (KMP) from a third party located in Vietnam. The company’s Dubbo Project, is a long-term resource of rare earth elements, zirconium, niobium and hafnium, located in New South Wales, Australia. ASM intends to develop the Dubbo Project to produce metal oxides which will be used for refining into critical metals at ASM’s KMP and subsequent plants that may be established in other jurisdictions.

To learn more about Australian Strategic Materials Limited, click here

Disclaimer: Australian Strategic Materials Limited is an advertorial member of InvestorNews Inc.

This interview, which was produced by InvestorNews Inc. (“InvestorNews”), does not contain, nor does it purport to contain, a summary of all material information concerning the Company, including important disclosure and risk factors associated with the Company, its business and an investment in its securities. InvestorNews offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This interview and any transcriptions or reproductions thereof (collectively, this “presentation”) does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to subscribe for or purchase any securities in the Company. The information in this presentation is provided for informational purposes only and may be subject to updating, completion or revision, and except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any information herein. 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. This presentation should not be considered as the giving of investment advice by the Company or any of its directors, officers, agents, employees or advisors. Each person to whom this presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. Prospective investors are urged to review the Company’s profile on SedarPlus.ca and to carry out independent investigations in order to determine their interest in investing in the Company.




Ara Partners Acquires Vacuumschmelze: Mission Critical in the Electric Vehicle Landscape

In a game-changing move within the sustainable transportation sphere, Ara Partners announced its acquisition of Vacuumschmelze (VAC), a renowned global producer of advanced magnetic materials earlier today. This strategic partnership is set to reshape the future landscape of electric transportation, particularly given VAC’s partnership with automotive giant General Motors (NYSE: GM).

Earlier in the year, VAC made waves in the industry by signing a deal with GM, intending to build a dedicated North American facility for manufacturing permanent magnets for electric motors. This commitment, slated for production by 2025, is underscored by the emphasis on utilizing locally sourced raw materials, signaling a sustainable and resilient supply chain commitment.

Tuan Tran, a Partner from Ara Partners, provided insights into the acquisition journey. He revealed an extensive 18 to 24-month mapping exercise, where Ara Partners vetted numerous players across the rare earth supply chain. The conclusion? VAC emerged as the unequivocal leader in the Western world. Beyond its manufacturing prowess, VAC boasts a 100-year operating history in advanced magnetics, making it an industry stalwart.

The strategic importance of this acquisition becomes even more evident when considering the broader ramifications for the electric vehicle (EV) market. The GM-VAC partnership, which commits to sourcing rare earths locally, implies a deliberate move towards cultivating a robust North American supply chain for these critical materials. This “mine-to-magnet” strategy, as highlighted by Tran, is mission critical to meet not only GM’s needs but also the burgeoning demand from other Original Equipment Manufacturers (OEMs).

VAC’s track record is impressive. Their operations extend beyond the EV market to include robust industrial groups, energy efficiency applications, and manufacturing automation. Their scope also stretches to aerospace and defense sectors, hinting at a potential electrification of flight in the coming years. VAC’s involvement in alternative energy and their envisioned scalability, both geographically and by market, reinforces the company’s forward-looking vision.

In context, the acquisition is about more than just business growth. It’s about the sustainable transformation of the transportation industry. As GM accelerates its EV strategy, forging partnerships with other companies like MP Materials Corp. (NYSE: MP), the importance of a sustainable, reliable supply chain becomes paramount. By 2025, GM aims to launch 30 new EV models, powered by its Ultium batteries and Ultium Drive motor technology. A sustainable supply chain for rare earth magnets, like the one VAC aims to build, is integral to this vision.

Tuan sums the Ara Partners’ acquisition of Vacuumschmelze deal up aptly by stating: “With a 100-year operating history, Vacuumschmelze has a sizable business today, with revenues north of half a billion. They are not only prominent in the EV market, boasting relationships with all the major automotive OEMs, but they also have a robust industrial group focused on energy efficiency applications and the automation of manufacturing. Their prowess extends to a strong aerospace and defense group, echoing the positive trends seen in the EV market. Leveraging an already formidable P&L and financial standing, we are envisioning an opportunity to evolve into a multibillion-dollar business in the future.”




Neo Performance Materials Establishes a Brighter Future with New Permanent Magnet Plant in Estonia

They say in tough times it makes sense to make acquisitions and expand the business ready for the cyclical upturn that inevitably follows. Well, that is what today’s company is doing with a new acquisition, a new investment, and the commencement of construction of a new permanent magnet facility.

Neo Performance Materials Inc. (TSX: NEO) (“Neo”)

Neo Performance Materials manufactures advanced industrial materials including magnetic powders and magnets, specialty chemicals, metals, and alloys. These products are critical to the performance of many everyday products and emerging technologies.

Neo has recently acquired 90% of SG Technologies Group Limited, invested to acquire 44% of Neo North Star Resources, and completed the groundbreaking for a new permanent magnet manufacturing plant in Narva, Estonia. They also delivered a record Q2 2023 revenue of US$170.4 million, albeit with lower adjusted net income for the quarter.

SG Technologies Group Limited’s 90% acquisition

As announced on April 18, 2023, Neo has agreed to acquire 90% of SG Technologies Group Limited (“SGTec“) for “an initial payment of £10.8 million (US$13.4 million) plus future earn-out considerations of between 0 and £5.4 million (US$6.7 million) based on Adjusted EBITDA performance over the SGTec’s fiscal years 2024 through 2026.” SGtec is one of Europe’s leading advanced, specialty manufacturers of rare earth and other high performance magnets. The announcement stated:

“Today, SGTec produces a variety of high-performance magnets and magnetic assemblies for some of the world’s leading brands in electric and hybrid vehicles, multi-fuel and medium-duty engines, hydrogen fuel cell vehicles, off-highway fuel systems, automotive systems, and consumer electronics. It is recognized as a leader in the production of fully dense bonded neodymium-iron-boron (“NdFeB”) magnets, soft magnetic composites (used in high-speed solenoids and electric motor applications), and other high-performance magnets.”

A summary of SGTec’s business – now 90% owned by Neo Performance Materials

Source: SGTec website

Investment to acquire 44% of Neo North Star Resources

In Q2, 2023 Neo completed an investment of ~US$4.5 million for a 44% stake of Neo North Star Resources Inc. (“NNSR“), including an off-take agreement of 60% of the product produced. NNSR is a JV between Neo and North Star Resources which owns the license for the Greenland Sarfartoq Rare Earth Project. Neo’s plan is for the Project, once in production, to be a source of neodymium and praseodymium (“NdPr”) for their Estonia rare earth separations plant.

You can read more details here about the Neo North Star Resources Inc. JV and the Greenland Sarfartoq Rare Earth Project here.

Permanent magnet manufacturing plant in Estonia

As reported on July 7, 2023, Neo has commenced construction of their European permanent rare earth magnet Plant in Estonia. Interestingly the Plant will recycle end-of-life magnets to make new permanent magnets. High-purity magnetic rare earth oxide feed will come from Neo’s existing rare earth separations plant in Estonia. Once in operation, the two Neo plants will form Europe’s first and only fully integrated supply chain for sintered rare earth permanent magnets designed to produce specialized rare earth permanent magnets for use in electric vehicles, wind turbines, and other clean energy technologies.

Neo state:

Phase 1 production of 2,000 tonnes/year is slated to begin in 2025, an amount that can support the manufacturing of ~1.5 million electric cars. Neo’s expected Phase 2 production of 5,000 tonnes/year can support the manufacturing of ~4.5 million electric cars.”

Given the typical forecasts for global plugin electric cars is an increase from ~14 million pa in 2023 to ~24 million pa by the end 2025 and ~50 million pa by the end of 2030, there should be enormous demand for permanent rare earth magnets, even if some cheaper EVs choose to use inferior magnets. Added to this will be all the other demand areas such as wind turbines etc.

The recent groundbreaking ceremony of Neo’s new rare earth magnet manufacturing facility in Estonia, Europe (set to begin in 2025)

Source: Neo news July 7, 2023

Record Q2 2023 revenue, but lower adjusted net income

As reported on August 11, 2023, Neo achieved record Q2 consolidated revenue of US$170.4 million compared to US$168.2 million for the same period in the prior year; an increase of $2.2 million or 1.3% YoY. Adjusted Net Income was US$2.5 million (US$0.05 per share), down from US$15.9 million (US$0.39 per share) in the corresponding period of the prior year. Neo ended Q2, 2023 with a cash balance of US$126.9 million, after funding acquisitions and investments of $16.1 million, distributing $6.7 million in dividends to its shareholders, and repurchasing $1.2 million of shares.

New Neo Performance Materials CEO, Rahim Suleman, stated:

Despite the subdued market environment for rare earth magnetics, and continuing lead-lag pricing challenges that we must navigate, our top-line performance was helped by high volumes for value-added rare earth products outside of China. This performance generated healthy cash from operations and free cash flow, which allowed us to fund the acquisition of SG Technologies Group Limited, the investment in Neo North Star Resources, and the groundbreaking for our permanent magnet manufacturing plant in Narva, Estonia. Neo continues to be well positioned to execute our future growth initiatives.

Closing remarks

Neo is using the tough current market conditions to grow their business ready for the next cyclical upturn. Neo has done this via a clever acquisition and investment, combined with pushing forward on a new permanent magnet plant in Estonia. The current subdued demand for magnet products (typically used in powerful electric motors such as wind turbines and electric vehicles) will turn around at some point. And when it does Neo should potentially be better positioned than where it was before we entered the current global slowdown, at least in terms of its product lineup and supply chain.

Neo Performance Materials trades on a market cap of C$393 million.




Fluctuations in Rare Earth Prices: Understanding the Dynamics

An Interview with Alastair Neill, a Director for the Critical Minerals Institute (CMI)


Rare earth elements, a crucial component in our modern technological world, have seen dramatic price fluctuations in recent months. I sat down with Alastair Neill, a Director for the Critical Minerals Institute (CMI), to get a better understanding of these market dynamics.


Tracy: Alastair, the recent Reuters piece titled Chinese rare earth prices hit 20-month high on Myanmar supply worry (msn.com) highlighted a surge in Chinese rare earth prices due to concerns about supply from Myanmar. Can you shed some light on this?

Alastair Neill: Indeed, Tracy. Myanmar’s supply to China, especially to its southern plants, is significant. Historically, it has provided about 50% of their total in recent years. Any disruption, as seen before, impacts prices, notably for elements like terbium and dysprosium.

Tracy: What’s driving the media coverage on this issue?

Alastair Neill: The media is closely monitoring the situation in Myanmar. Over the past two to three years, interruptions in supply have been frequent. The mines in Myanmar, managed by the Chinese, have faced local resistance, given the perception of exploitation.

Tracy: Yet, just a month ago, Reuters reported rare earth prices (reference, Rare earths prices sink to lowest since 2020 as China ramps up supply | Reuters) were at their lowest since 2020 due to China increasing its supply. Can you comment on this disparity?

Alastair Neill: It’s a dynamic market. In May this year, terbium was around $1,200 a kilo, dysprosium at $274. Now, dysprosium has surged past $350, while terbium remains stable. Elements like Nd (Neodymium) and Pr (Praseodymium) also experienced price drops, but have recently rebounded. The northern mines can produce Nd and Pr, but terbium and dysprosium remain vulnerable to supply chain issues.

Tracy: The Reuters article mentions potential disruptions due to inspections in Myanmar’s Pangwa region and concerns from environmental inspections in Jiangxi province. Can you speak on these concerns?

Alastair Neill: Inspections, while necessary, can slow down production or halt it temporarily, leading to supply chain hiccups. This situation creates uncertainty in the market, with stockpiling and price hikes as natural reactions.

Tracy: Finally, the article from July speaks about China’s dominance and the role of rebates in maintaining its position. Your thoughts?

Alastair Neill: China’s influence on the global pricing is undeniable. Their rebate strategy gives them a significant cost advantage, making competition tough for others. This not only secures China’s dominant position but can influence global supply chain decisions.


The rare earth market, like many commodities, remains subject to geopolitical influences, supply chain uncertainties, and global demand shifts. As the world continues to rely on these essential elements for everything from consumer electronics to green energy solutions, understanding the intricacies of their market becomes increasingly crucial.

In conversations with experts like Alastair Neill, it becomes evident that while short-term price fluctuations are inevitable, strategic decisions and global cooperation can pave the way for a more stable supply chain in the future.




American Rare Earths’ Melissa Sanderson on the ‘potentially rich deposit’ of magnetic materials in Wyoming

In a recent interview between InvestorIntel’s Jack Lifton and Melissa Sanderson, President of North America and Director at American Rare Earths Limited (ASX: ARR | OTCQB: ARRNF) (“ARR”), they discussed the exciting discovery in Wyoming of a potentially rich deposit of the magnetic materials, neodymium (Nd) and praseodymium (Pr) and offered an update on the rare earths industry.

Melissa began with an explanation that while the exploration is still in its early stages, ARR plans to fast-track the analysis process with ALS Labs. Outlining the challenges in the development of such a project, Melissa was consistent in ARR’s commitment to start production at Halleck Creek within a 5-to-7-year timeframe, provided there are no significant objections during the permitting phase.

Jack and Melissa also discussed geopolitical elements in the rare earths’ landscape. Despite potential shifts in the White House and its policy approach to mining and natural resources, Melissa expressed optimism. She referenced an unprecedented bipartisan agreement on the Hill. On one side, the left is driven by the demands of climate change and the pursuit of a more sustainable economy. On the other, the right is focused on national security and the reduction of dependence on foreign entities like China.

plans to fast-track the analysis process with ALS Labs. Outlining the challenges in the development of such a project, Melissa was consistent in ARR’s commitment to start production at Halleck Creek within a 5-to-7-year timeframe, provided there are no significant objections during the permitting phase.

Jack and Melissa also discussed geopolitical elements in the rare earths’ landscape. Despite potential shifts in the White House and its policy approach to mining and natural resources, Melissa expressed optimism. She referenced an unprecedented bipartisan agreement on the Hill. On one side, the left is driven by the demands of climate change and the pursuit of a more sustainable economy. On the other, the right is focused on national security and the reduction of dependence on foreign entities like China.

Lifton concurred with Sanderson, noting that although the U.S. could never be entirely self-sufficient in these essential materials, they could rely on countries such as Australia and Canada for supply. He also voiced his belief that the U.S. market for rare earths would remain a sellers’ market due to the demand. To access the complete interview, click here

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About American Rare Earths Limited

American Rare Earths (ASX: ARR | OTCQB: ARRNF | FSE: 1BHA) is a leading explorer and developer of rare earth elements with a strong focus on developing sustainable and cost-effective extraction and processing methods. The company’s projects, including Halleck Creek in Wyoming, La Paz in Arizona, and Searchlight in Nevada, hold significant potential to become major rare earth production sites in North America.

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].




Common Nonsense about Rare Earth Permanent Magnets

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 2nd 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.




Iluka Resources is building Australia’s first fully integrated rare earths refinery

Iluka Resources Limited (ASX: ILU) (“Iluka”) is an Australian critical metals producer, specializing in mineral sand mining and processing. Iluka is the world’s largest producer of zircon, a major producer of high grade titanium feedstocks rutile and synthetic rutile, and is set to become a significant global supplier of refined rare earths from 2025.

Iluka’s core business is the mining and processing of mineral sands to produce zircon and titanium feedstocks rutile and synthetic rutile

Source: Iluka Resources company presentation

The Eneabba rare earth oxide planned refinery

Iluka plans to build one of only a few rare earth oxide refineries globally, at Eneabba in Western Australia. This is occurring in a strategic partnership with the Australian Government which has provided Iluka with a A$1.25 billion non-recourse loan to construct the refinery.

Commissioning of the Eneabba Refinery is scheduled for 2025. The Eneabba Refinery will produce separated neodymium, praseodymium, dysprosium and terbium.

The Eneabba Refinery will be fed by Iluka’s internal feedstocks including their unique rare earths stockpile at Eneabba, Wimmera development in Western Victoria and Balranald development in New South Wales, Australia.

A summary of Iluka’s Australian operations including the planned Eneabba Refinery which will produce separated neodymium, praseodymium, dysprosium and terbium

Source: Iluka Resources company presentation

Eneabba Refinery Project update

Iluka already has a stockpile of ~1 million tonnes of high grade rare earth concentrate, readily available at surface at Eneabba.

The Eneabba Refinery feedstock operations continue to progress. Wimmera has completed a PFS (DFS underway), and Balranald has completed a DFS and taken a final investment decision.

The Eneabba Refinery has been approved and bulk earthworks continue with site preparation.

Once finished and ramped the Eneabba Refinery will produce separated rare earth oxides essential for global electrification, including ~4ktpa Nd+Pr and up to 0.75ktpa Dy+Tb. Once production is ramped the rare earth oxides are expected to potentially produce revenues slightly in excess of Iluka’s current mineral sands products revenues (see chart on page 19).

Schematic of the Eneabba Refinery once complete in 2025

Source: Iluka Resources company presentation

The Eneabba Refinery will support junior rare earths miners as they can supply feedstock for the refinery

Iluka’s Managing Director & CEO, Tom O’Leary, states:

In strategic partnership with the Australian Government, Iluka is catalysing the development of Australia’s rare earths industry by facilitating other emerging Australian mining companies into production, with Iluka as their customer, and with value addition taking place domestically. In October last year, Iluka concluded an agreement with Northern Minerals – just such an emerging rare earths company – for the future supply of concentrate from its planned rare earths mine at Browns Range in the Eastern Kimberley…….

Closing remarks

Iluka Resources is already a giant in the business of mineral sands mining and processing to produce zircon and titanium feedstocks rutile and synthetic rutile.

Even more exciting is their plans to build a globally significant rare earths integrated refinery at Eneabba in Western Australia. Once completed in 2025, the refinery will ramp up to produce key light and heavy rare earth oxides and provide the world with an alternative to the current Chinese dominated supply chain.

Well done Iluka!

Iluka Resources has net cash of A$431 million (as at 31 March 2023), trades on a PE of 9.4, and has a market cap of A$4.917 billion.




Appia adds another rare earths project to their portfolio, this time in Brazil

Appia Rare Earths & Uranium Corp. (CSE: API | OTCQX: APAAF) (“Appia”) now has 4 rare earths/uranium projects globally. Today we take a look at Appia’s newly acquired PCH Project (agreement to acquire 70%) in Brazil and give an update on Appia’s Alces Lake rare earths Project in Northern Saskatchewan, Canada.

PCH Project (Brazil)

Appia announced in June 2023 that they had signed a Definitive Agreement to acquire up to a 70% interest in the PCH Project (subject to certain conditions). The PCH Project is 17,551 hectares in size and located within the Goiás State of Brazil. It is located ~30 km from Iporá, a medium size city of ~31,500 population, where infrastructure is well developed.

Sampling data shows enrichment in rare earth minerals from between 8 meters and 20 meters depth in ionic clay ore. Ionic adsorption clays are the main source of the critical rare earth permanent magnet metals, dysprosium and terbium. These projects are also rare outside of China.

Appia states:

The positive results of the recent geochemical exploration work carried out to date indicates the potential for REEs and Niobium within lateritic ionic adsorption clays.

Appia also states:

Total REE grades in numerous auger holes drilled range up to 16,648 ppm (1.66%), with an average of 1,291 ppm total REE and importantly, the valuable rare earths used in magnet applications (Pr, Nd, Tb and Dy) + Y account for approximately 14% of total rare earths, with a maximum of 28.4%.

The higher the valuable rare earths percentage the better. Appia state above 14% and in their latest presentation they state it as “an average value of 16.67%.

This is a reasonable figure, especially when considering the shallow depth and the lower mining costs in Brazil. The deposit could potentially be mined with low-cost open pit mining techniques and processed using simple technologies.

Other key points of the PCH Project according to Appia are:

  • “One of a few major ionic clay projects in the western world
  • Easy to mine
  • Simple processing
  • Low radioactivity
  • Low CapEx
  • Low OpEx
  • Environmentally friendly processing
  • Near infrastructure
  • Mining friendly jurisdiction
  • Heavy and light critical rare earth.”

The PCH (ionic clay rare earths) Project in Brazil (Appia has an agreement to acquire 70%)

Source: Appia company presentation – June 2023

An update at Alces Lakes – Discovery of the new high-priority surface showing called the ‘Jesse Zone’

On June 22 Appia announced the completion of a NI43-101 Technical Report for their 100% owned Alces Lake Rare Earth Project in the Athabasca Basin, Saskatchewan, Canada. The Project is best known for having one of the highest rare earths grades (16.65 wt% TREO) globally of any project as well as being found in monazite ore which is amenable to processing.

Appia also gave a June 16 update on the Project stating:

Early successes by our prospecting teams have led to the identification of a new high-priority surface showing called the ‘Jesse Zone’ which was discovered on the first day of field prospecting,” stated Stephen Burega, President. “The prospecting team have now identified anomalies along the regional shear zone with biotite-rich pegmatite showings of up to 21,000 cps (counts per second) and the zone appears to be +85m in strike length and +20 m in width at surface.

The Jesse Zone is giving high scintillometer readings (measured in counts per second) which are a good pointer towards the monazite rich zones that hold the rare earth mineralization. The Appia team believes that the numerous surface showings may be connected under overburden. Detailed mapping and sampling continues at the Jesse Zone to confirm the full extent of this new zone.

Appia’s four projects description summary – Alces Lakes (Saskatchewan, Canada), Elliot Lake (Ontario, Canada), Loranger (Saskatchewan, Canada), and now the PCH Project (Brazil)

Source: Appia company presentation – June 2023

Closing remarks

Appia has now grown to own (including the 70% agreement to acquire the PCH Project) four significant rare earths/uranium projects globally. The very high grade Alces Lakes continues to be the flagship but now the new Brazil Project adds further to their portfolio. It also gives Appia a chance to significantly accelerate towards being a global rare earths producer at some point in the future.

Appia Rare Earths & Uranium trades on a market cap of only C$20 million.




A Tale of Two Critical Mineral (Rare Earths) Markets, the Subsidized and the Unsubsidized

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??




Examining the Pricing Challenges of Rare Earths in China’s Market from a Global Perspective

Ten years ago during the last rare earths supply “crisis,” Mr. Yi Gang, then Vice Governor of the People’s Bank of China, said,

In addition to boosting the flexibility of the Yuan exchange rate, China also should adjust resource prices to address imbalances, as many resources are still traded in China at below their natural prices. China also should boost wages and social benefits to lift consumption, step up its enforcement of environment regulations and undertake other structural reforms to address imbalances.

Repeat after me: The selling prices of the rare earths and other commodities within China are still today too low. Thus, if the Chinese Government did not strictly control their export then the market would drive much of, if not all of, the supply out of China chasing the higher prices in the foreign marketplace. One current driver for such a foreign accumulation would be the stocking of strategic materials (stockpiling) by governments to protect their domestic industry’s security of supply. Another driver could well be inventory building by once-burned, twice-shy private corporations, finally reversing the 50-year reign of the just-in-time, no-inventory philosophy, which was a principal driver in the creation of this problem.

Danger to China’s industrial supply

Chinese central planning economists, however, also see this danger to Chinese industrial security of supply. And, by extension, potentially then leading to high unemployment in the very important domestic Chinese alternate energy, green, and cleantech sectors,

I don’t think that the Chinese central bank, the People’s Bank of China (PBOC) wants to buy commodities as an alternative to U.S. Treasury Bonds, because this could disrupt the commodities market. It would cause price volatility in the very asset trying to be used to stabilize prices and the currency. Even more importantly, no commodity accumulation of sufficient size to soak up excess Chinese liquidity would be likely to make a dent in reserves as large as those of China in any case, but it would certainly interrupt the flow of raw materials for industry.

Volatility in commodity prices

Note that the dramatic swings in commodity prices in the Western economies since 2008, a result of too much free money needing a home, known as the commodity “Supercycle” has massively damaged the manufacturing sectors of most of the world by driving up manufacturing costs and the prices of consumer goods while simultaneously fueling inflation. China has massively benefited from this foolish cycle because the prices of all of the commodities in the Supercycle are set by China’s dominance in their sourcing, processing, and end-use. The increased prices that Tesla (NASDAQ: TSLA) pays for rare earth permanent magnet drive motors and lithium-ion batteries directly benefit China.

The PBOC is determined to force China to grow its consumer sector without causing inflation, one of the two of the PBOC’s greatest fears. The other is a massively corrected and thus much more expensive Yuan. Yet by continuing to buy up surplus and hot money inflow dollars at a fixed rate, the PBOC feeds (and it knows it is feeding) inflation and increases the pressure on it (the bank) to revalue the Yuan or let it float.

Are rare earths priced too low in China

The prices of rare earths in China will have to increase soon or smuggling will become uncontrollable. That is human nature. In the long run, the production of rare earth metals outside of China will help the Chinese by increasing the global supply and reducing global prices and thus eliminating the need for export controls. This is doubly true when one considers that China itself is the world’s biggest market for rare earth metals, and its neighbor, Japan, accounts for almost all of the rest of the global demand.

The rare earth mining economy within China is tiny as a proportion of the GDP. However, the number of jobs dependent critically on the properties of the rare earth metals required to manufacture green, clean, communication as well as entertainment technologies, is not trivial. China’s central planners’ dilemma is that it must keep rare earths cheap in order not to drive rare-earths-based component jobs offshore to lower-cost countries such as Vietnam or India. Its own entrepreneurs are already doing this, by the way.

The result for junior miners with rare earth claims is that the race is on to produce more of what China needs to be produced outside of China, to relieve the pressure on its two-tier pricing economy for commodities such as rare earths.

The Chinese government maintains strict overall control of China’s economy from Beijing. Chinese businessmen, however, have the same mindset as any other businessmen, maximize profit and reduce costs. In today’s China, the government wins. It just may use a meat ax rather than a scalpel to enforce its decisions, such as with the rare earths recently.

Final thoughts

But to think that Chinese economists and central bankers do not see the problem is foolish.

I believe that the selling prices outside of China of the rare earths will continue to be robust until, and if, there is significant non-Chinese production of rare earths. Then if demand exceeds supply, which I think is likely, there will be a massive culling of those companies not in production, or of those that are too large, or have too high costs, or are too skewed to light rare earths.

So long as China continues to maintain that its supplies are being exhausted, the prices of the heavy rare earths must continue to be strong and even climb. If China does not find domestic new supplies of dysprosium and terbium then it will become increasingly dependent on its “near shore (to China)” suppliers such as Myanmar and need to cultivate “friend shoring” from places like Brazil, which, in case you didn’t notice, is happening right now!

Be cautious when investing in the rare earth sector. Very large forces are intersecting in it and could make prices very volatile in the near term, or even permanently.