Friday, December 18, 2009

Rare Earth Metals on PBS's NewsHour and "Rare Earths strategic supplies more important than price" (AVL.TO; GWG[TSXV]; NEM.TO; RES.V)

I watched this segment a couple days ago and thought "This is about as mainstream as I care for the subject to get".
Here's their piece "Are Rare Earth Minerals Too Costly for Environment?":

Here are some quotes from the transcript:
"But, without rare earth, Copenhagen means nothing. You buy a Prius hybrid car and think you're saving the planet. But each motor contains a kilo of neodymium and each battery more than 10 kilos of lanthanum, rare earth elements from China."

"MARK SMITH, CEO, Molycorp Minerals: If the purpose is to lower our dependence on foreign oil, and all We're doing is asking that we put hybrid cars on the road that need Chinese rare earth materials, aren't we changing, you know, inter-trading one dependence for another?"

"...ZHAO ZENGQI: Although China has the largest reserves, we only have 50 percent of global deposits. We are supplying too much rare earth, and it's not sustainable, so we must restrict export.

LINDSEY HILSUM: The writing on the wall says: Become the leader of the world in rare earth industry.

But China can't produce enough for everyone anymore, and if governments are serious about low-carbon technologies, other countries will have to start producing.

MARK SMITH: I think that, if we don't get a couple of projects up and running very, very quickly, there's going to be very severe shortage of rare earths in the world, and all of these clean-energy technologies that we're legislating and trying to implement through policy changes are not going to be possible...."

And from Mineweb:

With China, which currently controls or produces virtually all global rare earths metals supplies, needing these for its own industries and limiting supplies, Jack Lifton reckons the West needs to consider its own production options, even if pricier to mine and process.
"Price may not be as important as security of supply [for Rare Earth metals]" says Jack Lifton, an independent consultant with more than 45 years of experience in sourcing nonferrous strategic metals. In the U.S., our dependence on rare metals is undermined by the simple fact that we're not producing any. Given that China now controls 95% of these 'technology metals' and the world is projected to eat 200,000 tons of rare earth metals near 2015, we need to jumpstart our own domestic supply chain and, more importantly, build the refineries to process them-rather than sending them to China for refining, which is our only option currently.

The Gold Report: Jack, we hear you're starting on a documentary, "On the Green Road." Tell us a bit about it, and what you mean by "Green Road."

Jack Lifton: I came up with that title because no matter what the attitude of the individual is towards being "green," there really isn't any other path for us now. My proposed documentary "On the Green Road" will follow the path that a rare earth metal takes from the mine to the market, so that the consumer can see the necessary steps required to make the technological devices upon which our quality of life depends. If the Green Road is the path to the future we need to get on it and stay on it right now.

Six hundred million people in the Western world are enjoying a life increasingly dominated by technology that we don't understand. In particular, we don't understand how it is made. What I see in America is a reluctance to admit that the green road starts in the black earth. We have to mine and refine the minerals and metals into forms which can then be fabricated into forms which can then be made into parts which can then be assembled into the technology devices we use to conserve energy. Everything starts at the mine or at the oil or gas well.

In the West, electronic devices using electricity produced by a huge network of generating devices control our transportation, communication, and our environment. We've got a grid that we talk about as if we understand it, but it's an extremely complicated system. We ignore the fact that we produce and distribute oil and its by-products, metals and their compounds and alloys. Nobody pays attention to that. All we do is say we've got to stop doing this and stop doing that. We have to start educating everyone as to how a metal becomes a radio or how a metal becomes a battery, how a battery propels a car.

TGR: I heard you speak recently at the Hard Assets Conference about supply issues in terms of expanding wind and solar technologies. Can you explain some of those supply constraints?

JL: Yes. In the United States, Canada, and Western Europe we are consuming most of the supplies of the technology metals. Now we're facing six billion people in the rest of the world whose standard of living is growing rapidly and we do not have ten times the amount of materials used to create the good life in the West to create the same standard of living for the entire world.

I don't mean to be a doomsayer, but if the Chinese government wants its own people to have the standard of living that people in Los Angeles have today, it's going to mean that China must use all of its own natural resources to improve its standard of living and its quality of life, which will mean that our standard of living will have to decline. Why? Because there are some materials-for example, the rare earths-that China controls 100% of the supply of today. And as China's economy is growing, China is requiring more and more of these materials for its own domestic economy.

Ten years ago China exported 75% of its production of rare earth metals to the rest of the world. Today it exports less than 25%, even though the production in the last 10 years has more than doubled. So that should tell you what's going on here. This is not a conflict. This is economic reality....MUCH MORE
When we started posting on rare earths they were a curiosity for the general public. No more.
Here are some of our posts:
Shortage of Rare Metals for Hybrids Is Overblown
No one said there was a shortage. The question is geopolitical and strategic. It is the same situation with lithium. There isn't a shortage in the foreseeable future. In Li, The potential problem arises from the fact that Evo Morales controls half the world's known reserves of lithium. The calculus of signing agreements with him is closer to that required when dealing with Hugo Chavez than that required when dealing with the Japanese....
Canadian Firms Step Up Search for Rare-Earth Metals (AVL.TO; GWG[TSXV]; NEM.TO; RES.V)
These are EXTREMELY speculative issues that have had big run-ups since the rare earths began* to be spoken of in polite company. Be careful out there....
Wind/Rare Earth Metals: "China Non-Ferrous Barred From Taking Control of Lynas" And: "China Investment Corp to launch own rare earth mining firm"
Wind: Why rare earth metals matter
China tightens grip on rare earths
With a Name Like Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., it has to be good ( 600111:Shanghai)
Rare Earth Metals: "California metal mine regains luster" (GS)
Molycorp May Invest $400 Million to Expand Rare-Earths Mine
Wind: "China, Japan on collision course over rare-earth metals"
Wind: China to support three domestic enterprises for rare earth development. And: Baotou Steel Rare-Earth net loss hits $9.83 mln in H1
Rare earths offer unique investment opportunity

And many more.