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Jack Lifton is a commentator on the market fundamentals and future use trends of the technology metals.
Recent Activity
In response to an inquiry from a European correspondent about Toshiba’s recent announcement that they have developed a dysprosium-free samarium-cobalt (Sm-Co) magnet to replace heat-resistant neodymium magnet in motors, my colleague, Dr. Gareth Hatch wrote to me, earlier today: “As I posted online recently, this is an "Interesting" announcement from... Continue reading
Posted Aug 21, 2012 at RareMetalBlog
The Thursday night before Good Friday the DoD released its latest and long-awaited (by a very few people, most of whom were stock promoters) “report” on the military’s appraisal of its situation with respect to the supply of the rare earth elements it has determined that it needs for its current weapons systems. This kind of “report” is usually issued on a Friday night so that it will be forgotten by Monday’s news cycle. But this being a holiday weekend even release times purposely chosen to minimize the readership and the impact had to give way to the very few religious people in Washington who still believe in God and the DoD even had to pretend to respect the vast majority of the mainstream newspersons who believe in taxpayer funded holidays for servants of the people. I am trying to say that releasing the document on the eve of Good Friday/Passover was equivalent to not releasing it at all with regard to the impact it would (and in fact did (not)) have on the news cycle for Easter/Passover weekend. Continue reading
Posted Apr 15, 2012 at RareMetalBlog
Rollo, Just as an example I wonder if you're aware that the manager of the project and supplier of the components for the new San Francisco - Oakland Bay bridge across San Francisco Bay is a Chinese engineering company? See I advise you to just Google ""Chinese contractors" and America" or some such similar set of terms. Nancy Pelosi's homeys chose the lowest cost competent supplier, so they say. Jack Lifton
Veritas Bob, I am speaking of rare earth miners who are after HREEs. Molycorp doesn't have any better prospects of producing them than anyone on my list and probably a lot lower prospect. Constantine Karyannopoulos is no virgin nor are his scientific and engineering team. That is my answer. \ By the way: For Molycorp's Neo deal to go through it will probably need to sell bonds. That may not be so easy. If Molycorp falters in the financing then I bet someone else will grab Neo and Molycorp may well be cooked at that point. Thanks, Jack
Bob, Please just consider "expertise" to be the last word in the sentence. Jack
Congratulations to Great Western Minerals Group Ltd (TSX.V:GWG). Shame on the numerologists who see patterns in share price and market cap numbers determinative of actual production success. I prefer as my market “technicians” the astrologers who are probably more often right about these things. The market’s technicians apparently didn’t like... Continue reading
Posted Mar 25, 2012 at RareMetalBlog
The pilot plant is for Arafura, and it is the pilot plant for their full scale installation.
Constantine, Thank you for the corrections; they are always welcome, and I appreciate them. Thank you also for making the point that "Chinese" business is often based on FDI, foreign Direct Investment, so that many "Chinese" customers may well be classed as multinational. I doubt very much whether any other non-Chinese REE business has the depth of experience that you and your group have in the domestic Chinese market. I for one just wish that Neo Materials Technology had bought Molycorp rather than the other way around. Thanks for reading Jack
4now, I need to wax philosophical for a moment. The Soviet Union had a category of criminal conduct called "cosmopolitanism." Those guilty of this would be Soviet citizens who placed the good of a group, a person, or a political cause ahead of the good of the Soviet Union. Globalization has now created a class of businessmen, global-cosmopolitans, for whom making money is more important than the good of their country or the way of life or standard of living of those others who live in the same country as the global-cosmopolitans. This is unenlightened self-interest. The recitation of spells and incantations such as "I did it to maximize shareholder value" or depreciating the technical ability of a globalist's countrymen, because they can't cut the mustard against the others anyway,so we might as well do what we're doing, is pure self-serving bullshit. The rare earth total supply chain with all domestic American components and the same in the European Union and in Japan will be in place by 2015. All of those countries and regional groupings will do fine with or without Molycorp. I wonder if the Molycorp board has ever thought about what the Chinese think of global-cosmopolitans?
Jake, At TMS2012 I was at a table with, among others, Ian London of Avalon. he brought up a very good point. He said, "The rare earth companies are reaching the point where the current CEOs will have to fire themselves and be replaced with operational managers." We were not talking about GW, but I think Ian's point is well taken and that GW is just doing what a company should do as it progresses from exploration and fund raising to actual development of production capability and capacity. I am disappointed at the market "technicians' as many numerologists refer tot themselves who tell me that avoiding share dilution is more important than credibility, integrity, and actual production. The GW team has done a great job moving a concept towards sight of being actualized. Most of their competitors are share pushing hustlers who worry not to offend the market technicians. GW is shortly to become a genuinely vertically integrated prodcuer of rare earh metals and alloys. Jim Engdahl did his job well, and he probably isn't going anywhere too far from GW. Jack Lifton
I am a capitalist, and I have visited China many times in the last few years either to speak at or attend conferences on technology metals or to act as a consultant on business development and marketing of technology metals involved or related businesses such as mining and refining. .... Continue reading
Posted Mar 14, 2012 at RareMetalBlog
99.99999% of Americans will not be attending TREM2012 in Washington, DC, tomorrow (March 13,2012). To be fair it is a “policy” themed conference and is focused on what is best for America, and so it will not be as lively as the TMS2012 held in Toronto two weeks ago, which... Continue reading
Posted Mar 12, 2012 at RareMetalBlog
99.99999% of Americans will not be attending TREM2012 in Washington, DC, tomorrow (March 13,2012). To be fair it is a “policy” themed conference and is focused on what is best for America, and so it will not be as lively as the TMS2012 held in Toronto two weeks ago, which... Continue reading
Posted Mar 12, 2012 at RareMetalBlog
There is a large section of the punditry that seems to believe that the global rare earth space is whatever Molycorp wants it to be. The evidence of their senses is apparently not enough evidence for them. Molycorp has now become a “global player” says one. I thought it was... Continue reading
Posted Mar 10, 2012 at RareMetalBlog
Jason, I am in total agreement with you. I am being sarcastic and cynical about free market capitalism, which as you point out has not been practiced anywhere for some time. Thanks for your well cogent and well-foundedcriticismof contemporary capitalism. Jack
Jake, I agree with you, but the issue for both companies right now is to prioritize their individual efforts. I predict that both GW and Ucore will be around and that both will be be vertically integrated by 2015. There is indeed synergy to be gained from their working together. Im confident that both companies are aware of the advantages that working with the other could bring. Jack
The question is: Who is going to own the separation technology and even so would it be applicable or adaptable? Sent via BlackBerry from T-Mobile
Bob, That the 64 trilliion dollar (this years global GDP) question. Im out of my office right now, but Ill post a reply to you tonight. Jack Sent via BlackBerry from T-Mobile
The following essay was written over New Year’s weekend, 2011-12. My theme is that the rare earths supply frenzy has exposed an irreversible shift in the demand/supply picture for all technology materials, not just the metals, but also the energy minerals, and the minerals necessary for agriculture. The only mining... Continue reading
Posted Jan 2, 2012 at RareMetalBlog
Rare Metals in the News: JP Morgan and Decoupling the MCP engine from the Rare Earth Sector mining sector JP Morgan today, Sept 20, 2011, downgraded Molycorp (MCP) from overweight to neutral. The market reacted by selling off one billion dollars of MCP’s market capitalization as the share price lost... Continue reading
Posted Sep 20, 2011 at RareMetalBlog
I am today inaugurating an occasional column for the RMB, which I call “Rare Metals in the News” I am a natural resources news junkie, I admit it. I am also addicted to economic news and analysis, and I often find synergy between the two news streams. These days it’s usually economic news coming out of China that affects or correlates with the markets for rare metals. Continue reading
Posted Sep 12, 2011 at RareMetalBlog
Steeplechase, You have asked a very good question. Unfortunately Molycorp's interchangeable IR people and PR flacks are not good at answering questions of a technical, business operations,or best practices (in business operations) nature. To be charitable i don't think they have any answers. I am personally quite surprised at the very low interest by the main stream press either in Molycorp's announced "profits" or in the demise of the "mine to magnet" meme, which, as I recall, was to be the key to profitably in the business model described in the SEC filing for the Molycorp IPO. I am even more surprised at Hitachi's decision to move 20% of its rare earth permanent magnet production to mainland China. I think Hitachi's decision to move production to China and the "suspension of negotiations" with Molycorp are two sides of the same coin. I think Hitachi is telling us that they value security of supply NOW more than a possible supply some day in California. I believe that Hitachi also recognizes that without a supply, and an assured supply, of dysprosium there is no point at all to the mine to magnet meme. I work with Japanese investors, Japanese industrial concerns, and Japanese government agencies. I am shocked by the Hitachi move of production to China, and I am surprised that (Japan's) Showa Denko has also agreed to increase production of rare earth magnet alloys in China. I think Showa's action is directly opposite to the wishes of the Japanese Ministry of Industry. I think that Hitachi is telling us that it has concluded that the Chinese are going to be dominating the supply chain for rare earth magnet metals for some time and that they, Hitachi (and Showa), do not want to risk the capital to build a rare earth permanent magnet manufacturing facility in California. Of course, it might have been Showa Denko's decision that drove Hitachi's decision. One thing only is certain. Molycorp's wishes were not a positive factor in the decisions made by Hitachi or Showa Denko. I personally think that Molycorp's unbelieveable, and. frankly unattainable, production targets for REOs, REMs, REPM Alloys, and REPMs, with each phase being the largest of its type ever built and built and operated by people who have never before done almost any of it at any level, probably drove Hitachi away. I think that Molycorp must feel like a bride who knows that waiting at he altar for the missing bridegroom is a losing proposition. By the way I think that Molycorp has no plan for capital expenditures for Silmet, because they don't know what to do with it, or even if it will fit in whatever their non-mine to magnet plan is now. I suspect Molycorp was blindsided by Hitachi. The spin now begins. Jack Lifton I've written an Op-Ed on this general topic, and I hope it will appear soon.
Robin, Thank you very much for the reference to my conclusions at the Rare Earth & Strategic Metals Conference, 2011, about the permanent rarity of some metals. I specifically define a metal as rare if its production rate is below a figure that I calculate each year from the previous year's data. In 2009 I used 25,000 MT/annum and that made lithium a rare metal; in 2010 I used 32,000 MT, to reflect the economic improvement,but this kept lithium in the "rare" category. I suspect that when I do the 2011 calculations that lithium will no longer be rare by my definition, by the way. That having been said I note that the rate of growth of the production of some key technology metals has been leveling off even in the face of steadily increasing demand. There are many factors contributing to this leveling off, and I enumerate and analyse those factors in my writing. I hold that when the rate of growth of the production of a metal cannot be increased beyond a few percent per annum, let's say 5%, and that same metals are produced anyway at a volume less than a figure at which their production can allow the growth of their current end-uses and the implementation of new technologies based on them then those metals are permanently rare. One such metal is, for example, tellurium, which is why, for example, I do not believe that cadmium telluride thin film photo-voltaic cells have any future as a mass produced wide use technology. I am working on a book on the global metal economy and my research is very sobering. I am not a "peakist." I am I hope a realist. Those nations that do not identify and secure supplies of technology materials sufficient to maintain their quality of life and their national GDP are going to be in for some rude shocks as China moves towards economic superpower status by doing exactly that. I return to Australia on November 11 as a keynote speaker at a symposium opened by Mr Martin Ferguson, Australia's Minister of Natural Resources, whose office was kind enough to invite me. I hope to see you again then. Best regards Jack Lifton
I don't know Andrew Lubin, but I find it hard to argue with his economic logic. It's interesting that he has pegged the "prices or costs" of rare earths from the Mountain Pass operations at 20-30 percent more than those from China. I suspect those figures to be conservative. Even so it is necessary to balance Mr. Lubin's sckepticism of Molycorp's future operating margins with the fact that Chinese rare earth mining is now faced with unknown costs for environmental remediation and increased safety. I'm not sure that the cost differential between Chinese and American production is as high as Mr. Lubin states, but I am sure that it will be so in the future after China remediates and modernizes its mining sector accross the board-as it has now said it will undertake to do. The joker in the deck is the value of the Reminbi, the Chinese currency, in terms of the US Dollar; if the RMB apprecites it will automatically increase the prices of the rare earths from China in dollar terms. This may solve the problem that Mr. Lubin sees, because any metals purchased in China must be bought and paid for directly in RMB. I have twice been in China in the last month, and I have met miners and refiners of many rare metals in Chengdu (Sichuan), Beijing, and Shanghai. They are all wondering what Americans would like to see happen. I repeat here as I have said elsewhere that I have been directly told in China that China welcomes non-Chinese production of rare earth elements both to supply non-Chinese customers, and thus relieve China of the problem of not wanting to interrupt a customer nation's economy, such as its largest export customer, Japan, and also to supply China itself in case remediation or shortages there create a supply crisis in China itself. The CNN report like so many others is poorly researched and economically unitelligent. China does not have 97% of the world's rare earths; it produces 97% of them. Why so? Because of economics in the past. I was called by CNN to be a live TV feed last night as part of that news show. I was unable to do it because I had just flown in from Shanghai and there was no time to get to the studio. I'm glad I missed it. I was on a CNBC show last year, and I thought the moderator, Erin something-or-other was an airhead; I'm not putting the CNN people in this report on any higher plane. I'm tired of the uninformed commentary on the rare earth supply "crisis." It is an ECONOMIC problem, as Mr. Lubin correctly states; is it NOT a problem of a shortage of material or minable concentrations of the rare earths. When mines become bankable they get developed; it's really as simple as that.
Toggle Commented May 25, 2010 on MEDIA: CNN Reports On Rare Earths at RareMetalBlog
I just saw this report today, May 14, 2010, and I was also struck by the length of time it took to be published. I think this report fits into the "What I did on my field trip" category rather than into the "Economic and strategic value of the Pea Ridge deposits" category. It is anecdotal rather than scientific; it is promotional rather than informational; and it is of the "Our deposit is just like a (good) deposit elsewhere." type used commonly to generate small investor interest. Before reading this report I did not know with any certainty where were the largest deposits of rare earths in the world or of "magnetic" iron ore in the USA. I certainly am no better informed now. Doctor hatch says: "Wings Enterprises was active last year in promoting the concept of developing of a centralized rare earths refining capability for North America, with the proposed project to be funded by the US government. Although the initiative got little traction at the time, other entities such as Dacha Capital are now promoting this idea, albeit with a view to using private funds. The RESTART Act, recently proposed to Congress as a means of reviving the US rare earth supply chain, includes a mechanism for providing loan guarantees for these and similar projects. Of course it remains to be seen if such projects are technically feasible." I believe the paragraph should read: Wings Enterprises was active last year in promoting the concept of developing of a centralized rare earths refining capability [in the United States]for North America, with the proposed project to be funded by the US government. Although the initiative got little traction at the time, other entities such as [Canada's] Dacha Capital are now promoting this [the] idea [of building such a universal refinery in Canada], albeit with a view to using private funds. The RESTART Act, recently proposed to Congress as a means of reviving the US rare earth supply chain, includes a mechanism for providing loan guarantees for these and similar projects [providing they are done in the United States by American owned enterprises for the benefit of American workers and the public, in general]. Of course it remains to be seen if such projects are technically feasible [in any way that is economical without requiring permanent subsidies]. With the additions above I would agree with Doctor Hatch's conclusions. I think that the idea of a universl refiniery is poorly thought out and is orders of magnitude more complex than either Mr. Kennedy or Mr. Wong believe them to be. Thus it would be impractical and uneconomical at best. Lastly, I'm a bit perplexed by the fact that in a world where the prices of iron ore are skyrocketing someone would want to mine only the rare earths from a depsoit of iron ore stated to be the largest in the USA while at the same time the USA is importing iron ore. Jack Lifton