Modern Camaro Forums banner

1 - 6 of 6 Posts

Supporting Super Moderator
5,668 Posts
Discussion Starter #1
I have seen a few news stories over the past few years about China buying up all the rare earth industry/companies in the US.

I just came across this story. It makes me wonder if going to EV is trading one foriegn dependancy to another.

Only a relatively small group of engineers and traders have heard of “rare earth” metals such as neodymium, terbium, dysprosium and lanthanum. To one extent or another, these are all used to make magnets and/or batteries to go with hybrid or electric cars and with generators needed for electricity-producing windmills.

Supplies of rare earth metals from places like China, Vietnam, Canada and even the United States are becoming scarce. China has already put controls on exports as it consumes its own supply. If you think or have been told we are currently dependent on Arab oil or dirty coal, just be prepared to expect rare earth dependency on whomever has these critical items, and very soon.

An example: The hybrid Toyota Prius requires about 66 pounds of lanthanum per vehicle produced in its best fuel economy/extended range vehicle. Toyota intends to produce 1 million units a year after 2010, using 66,000,000 pounds of lanthanum per year.

I can only imagine what the price of hybrid electric vehicles and windmills will grow to very soon, as rare earth material demand rises. If oil is plentiful and speculation in oil prices can drive it up to about four times its real market value, prices of truly scarce materials in the rare earth group will far exceed what a little speculation did with plentiful commodity.

The problem with so much of the opinion page stuff on energy use, cost, pollution, material and sources, etc., is that most opinions aren’t coming from sources that are fully informed in science, geography, trade and economics. Who has cracked a thermodynamics or physics text to see about energy formation and conversion or to study losses in transmission or use? The cost of copper for heavy transmission lines is not inconsequential. Or who has made a study of materials and their sources to produce so-called “green” products?

Also China has 97% of the rare earth market and recently proposed to ban exports of rare earth materials.

China's Electric Car Market
China in the spotlight at the Frankfurt Motor Show
By Brian Hicks
Wednesday, September 16th, 2009

As you read this, the future of transportation is taking place in a convention hall in Frankfurt, Germany.

It's called the Frankfurt Motor Show. . . and insider reports indicate electric cars are taking over the world like an army of robots, hell-bent on revenge against their flesh masters.

Every company represented at the show is featuring their version of an electric/hybrid automobile. Even high-end brands like Porsche and Ferrari are going electric.

But while SAAB, BMW, and Mercedes size-up each others' electric motor, the Chinese are the ones that are the talk of the show.

The bottom line: China's car market is the Holy Grail.

While the U.S. and European dealers have to create tempting incentive plans to get cars off their lots, Chinese dealerships literally have waiting lists of customers who want to buy cars and are willing to take a spot in the queue.

The potential numbers are mind-boggling.

In China, only 2.9% of the population owns cars. That's only about 38 million cars on the streets of China's cities and villages.

Compare that to the United States, where 238 million vehicles are on the road.

Catch my drift now?

The growth in China is going to be awesome.

According to a Wall Street Journal article on September 9:

China's auto industry continued to post strong growth, with sales of passenger vehicles rising 90% in August.

Passenger-vehicle sales in China rose to 858,300 units in August, up 90% from a year earlier, the China Association of Automobile Manufacturers said in a statement Tuesday. China's overall auto sales rose 82% in August to 1.14 million units.

Mr. Liu said he expects sales of small cars to continue to outperform the industry. . . "Customers right now are becoming younger," he said. They only need and can only afford smaller cars, he said.

As the breakneck pace in sales growth eases, it will help to spur consolidation in China's auto industry, which currently has more than a hundred vehicle manufacturers, Mr. Liu said.

You read that correctly. . . 100 different car manufacturers!

And this brings me now to draw readers' attention to the real opportunity from this electric car bull market: rare earth metals.

Rare earth metals are vital in the clean energy markets of electric batteries for cars, solar panels, wind turbines. . . even weapons!

Metals like neodymium, indium, lithium, dysprosium, and terbium are essential to green energy technologies.

Without these metals, there would be no Toyota Prius.

According to Jack Lifton, a commodities analyst and leading authority on rare metals, "The Prius automobile is the biggest user of rare earths of any object in the world."

How much are we talking?

Lifton says there is 1 kilogram (2.2 lb) of neodymium in the Prius hybrid's electric motor between 10 and 15 kg (22-33 lb) of lanthanum in the car's battery pack. Those figures would likely rise if the car were fitted with a larger battery pack and motor for higher fuel efficiency.

And guess what? China accounts for 97% of global production and about 60% of consumption of rare earth metals.
In a recent article titled "China's Plan to Dominate Rare Earth Metals," Sean Brodrick writes:

China plans to curb its exports of the metals. China has announced that export quotas for the first half of 2009 are being reduced by approximately 34% over the same period last year.

Not surprisingly, Toyota is said to be searching for additional suppliers of these materials outside China.

But it might not help. You see, the Chinese are on a buying binge for rare earth properties.
According to Brodrick. . .

Two Australian companies, Lynas Corp. and Arafura Resources, are planning to open mines in the next couple years that have combined production equal to a quarter of annual global production of rare earth metals.

But then the global financial markets collapsed last year. Both companies lost their financing. Guess who stepped in with new financing?

The Chinese, that's who!

Mining companies wholly owned by the Chinese government showed up with the cash needed to finish construction of both companies' mines and ore processing factories. In exchange, the Chinese companies received 51.7 percent of Lynas and 25 percent of Arafura.

And that's not all. . . Remember when Chinese oil company CNOOC tried to buy U.S.-based Unocal a few years ago? Unocal owns is the Mountain Pass mine, a potentially rich rare earth mine in California.

China's Unocal bid fell through, and Chevron bought the company instead. Who shows up at Chevron's doorstep but the Chinese, cash in hand, asking Chevron to sell them the Mountain Pass mine separately from Unocal.

Instead, Chevron sold the mine to Molycorp Minerals, a private American group, which plans to reopen the mine by 2012.

Rare earth stocks are rallying . . . and will continue to rally for years to come.

My research team will be releasing a report on the investment opportunities in this tight space.

But if you want to play rare earth metals now, you can play my favorite junior mining stock: Argentex (AGXM - OTCBB).

I recommended Argentex nine months ago. . . and the stock has done nothing but go up for my readers.

Argentex has a potentially significant indium resource. . . but this past Monday, the company released its silver estimate that blew away its original estimate.

Argentex's first-ever Pinguino mineral resource estimate yielded 180 million ounces of silver equivalent.

Argentex announced the completion of the first-ever mineral resource estimate for Pinguino, the company's 100%-owned polymetallic property in Argentina's Santa Cruz province.

The mineral resource estimate reports 180 million ounces of silver equivalent in the inferred and indicated categories. Specifically, the inferred resource of 35.4 million tonnes is estimated to contain 141,600,000 ounces of silver equivalent. The indicated resource of 7.3 million tonnes is estimated to contain an additional 40,150,000 ounces of silver equivalent.

Mineralization at Pinguino remains open in all directions and only 15 of more than 47 veins mapped on the property have been tested by drilling. There is excellent geological potential for the delineation of additional mineralization, which would be reported and modeled to increase and upgrade the resource estimate.

I had a chance to talk to Ken Hicks (no relation), CEO of Argentex, on Monday. His exact words to me were, "We've just scratched the surface. Less than 10% of our Pinguino property has been worked on. This is huge. . . we have a lot of work to do. . . "

Argentex is going to $2 a share by the start of 2010. Buy it on the dips.

Rock it ou

Japan on alert over China’s plans to restrict metals exports

Japan is readying itself for a potential showdown with China at the World Trade Organisation as Beijing considers plans to strangle global supplies of rare earth metals — the “green” lanthanide metals used in hundreds of environmental and military technologies.

Global supply of the rare-earth metals, which are vital to the mechanisms of hybrid cars, wind turbines, iPods, lasers, super-efficient light bulbs and radar systems, is 95 per cent controlled by China.

The country’s dominance of the market is the result of a deliberate, 20-year bid by Beijing to cast itself as the “Opec of rare earth metals”. China’s apparent plans to tighten the leash on world lanthanide supplies come on the eve of a landmark decision by the Australian Government on the future of Lynas, one of its leading rare-earth mining companies. The Foreign Investment Review Board is debating whether to allow the state-owned China Non-Ferrous Metal Mining to buy a 51 per cent stake.

A senior member of Japan’s Rare Earth Metal Association observed that in a world before everyone had a mobile phone and wanted to drive fuelefficient cars, China’s rare earth monopoly was less meaningful — now it has created a dominance of globally strategic importance. Others, particularly those within the Japanese automotive sector, believe that the rare earth metals will become the centrepiece of numerous international trade wars.

Related Links
Japan prompts 'green mineral' war with China
China tightens grip on rare-earth metals
China takes charge of keys to future
The document that has sent shockwaves through Japanese industry and government is a White Paper produced by the Chinese Ministry of Industry and Information Technology, which proposes an export ban on rare earth metals including the particularly critical dysprosium. Although the paper’s proposals, published only days ago, have yet to be acted on, the draft document has proved incendiary and spurred Sumitomo into accelerating a project in Kazakhstan to secure a non-Chinese supply.

The Chinese threat of an export ban on minerals critical to the modern world may end a phase of polite negotiation between Tokyo and Beijing on the issue. A senior Japanese official told The Times that if China does ban some rare earth metal exports by 2015, Japan may use the WTO to block such an action.

Chinese export quotas of rare earth metals fall below Japan’s demands, forcing even the largest consumers there to rely on smuggled material to meet about a quarter of their annual needs. A draft of the Chinese plan has been seen by senior executives at several of Japan’s largest trading houses and has sparked fears that China is aiming to step up dramatically its programme of quota reductions. Beijing has cut export quotas by about 6 per cent annually over the past decade. China’s rare earth monopoly arises from a combination of aggressive empire building by Beijing and long complacency on the part of the big consumers. The metals occur naturally in China, but Australia, the United States and South Africa all used to produce rare earth metals with a refining process that is dirty, mildly radioactive and expensive. It is widely believed in the industry that by skimping on costly clean-up provisions, China has been able to undercut all its competitors, forcing them out of business and earning itself its 95 per cent monopoly.

An attempt by China to further constrain — or ban — lanthanide exports would effectively force companies to re-open rare earth mines around the world or develop new ones. Sumitomo’s joint venture with Kazakhstan’s largest nuclear power company — revealed in The Times this month — is expected to unleash a land grab for rare earth mines in the former Soviet country. A Sumitomo spokesman said that the draft proposal from Beijing had “speeded-up our project there”.

But China is not keen to let its dominance slip. Lynas Corporation, an Australian miner, had been poised to open a new rare earth refinery project in Kuantan in Malaysia, which would eventually have met a large portion of demand from Japan and elsewhere. The credit crunch derailed Lynas’s funding plans for that project and has opened the door for China to step in with a bid that would give a state-owned company effective control of the Australian company. “Nobody else has come along with a deal on these terms,” a Lynas spokesman said

China Produces 99% of Two Rare Metals Needed for Hybrids

China Produces 99% of Two Rare Metals Needed for Hybrids
Posted on 03 September 2009
Tags: DAI, F, GM, HM, TM
Toyota Motor Corp. (TM) has the best-selling Prius, General Motors Corp. (GM) will soon roll-out the highly anticipated Volt, while Honda Motor Co. (HM), Ford Motor Company (F), Daimler AG (DAI) and every other large automaker either has hybrids on the market or is planning to introduce them – but a key component of the electric motors in hybrids is almost completely controlled by China.

The New York Times today published a story titled “China Tightens Grip on Rare Minerals.” It is a little known, but increasingly important fact, that China produces “more than 93 percent of so-called rare earth elements,” and specifically more than 99 percent of two particular elements, dysprosium and terbium, that are key components in hybrid cars.

Despite increasing demand, China appears to be ready to tighten worldwide supply in a move to get manufacturers into China as well as ease the incredible environmental burden China has so far allowed its mining practices to take:

China’s Ministry of Industry and Information Technology has drafted a six-year plan for rare earth production and submitted it to the State Council, the equivalent of the cabinet, according to four mining industry officials who have discussed the plan with Chinese officials. A few, often contradictory, details of the plan have leaked out, but it appears to suggest tighter restrictions on exports, and strict curbs on environmentally damaging mines.

Beijing officials are forcing global manufacturers to move factories to China by limiting the availability of rare earths outside China. “Rare earth usage in China will be increasingly greater than exports,” said Zhang Peichen, the deputy director of the government-linked Baotou Rare Earth Research Institute.

The move to tighten control of rare earth metals, is also, according to some, born of sheer necessity:

“Sometime in 2011 to 2012, Chinese domestic demand will surpass Chinese domestic production,” says Jack Lifton, an analyst and consultant who specializes in what he calls the “technology metals” and advises mining industry clients developing rare earth projects in North America. “This means no more Chinese exports of rare earths, other than in finished goods made in China that they allow to be exported.”

A Toyota Prius requires between 2 and 4 pounds of rare earth metals for its electric motor – a requirement that may become increasingly difficult if not impossible to meet. Concern about a crippling shortage may seem overly dramatic, but the United Kingdom’s Times notes that about 20% of Japan’s imports of rare earth metals are already believed to enter through the black market because supply is so scarce.


10,420 Posts
1 - 6 of 6 Posts