Let me begin by saying that I believe the premise of this question is mistaken. It is quite incorrect to think that fossil fuel resources are finite. It may be true that there is a finite quantity of such resources in the earth's crust, but that does not mean that we will ever run out.
Rare Earth Mining News
Shares in Africa-focused Globe Metals and Mining shot up on Monday after it released positive rare earth exploration results. Chinese state-owned firm East China Minerals Exploration and Development Bureau last month became the largest shareholder in Globe when it bought a 53.7 per cent stake.
This is what happens when you corner a market the way China has done with rare earth elements: Statistics collected in Hong Kong show exports of rare earth metals have shrunk by half over the past year. Over the same period, the value of these exports jumped 10-fold. It’s hard to argue with these kinds of numbers. After the stocks prices of the few big players pulled back from recent highs investors saw it not as evidence of sobriety returning to the market, but simply as a buying opportunity.
China's biggest rare earth producer, Baotou Steel Rare Earth (Group) Hi Tech , has won local government approval to start an exchange to trade the increasingly lucrative metals used in many high-tech goods, state media reported on Friday. The regional government of Inner Mongolia, where the Shanghai-listed company's mining and processing operations are based, gave the "green light to the establishment of a rare earth exchange in the city of Baotou," the Xinhua news agency reported, citing city officials and an earlier statement from the Baotou Steel Rare Earth (Group) Hi Tech.
Canadian financial commentator Michael Campbell does a Q&A with Dr. Michael Berry of Discovery Investing. In the column, Campbell and Berry discuss the U.S. debt crisis and the Greek situation, before focusing on strategic metals as an area of interest for investors. Berry points to a critical metals bill, introduced this week into the U.S. Senate, as an important signal for investors. The bill devotes $106 million to the development of cobalt, helium, lead, lithium, phosphate, potash, and rare earths.
A Conference Board of Canada report says high energy and metals prices "are prompting resource companies to invest billions in iron ore projects, nickel processing and offshore oil developments" in Newfoundland and Labrador, generating the largest growth in real GDP this year of all the Canadian provinces." The board's Provincial Outlook - Spring 2011 report issued Wednesday also forecasts that Saskatchewan "will benefit from tax breaks and a hot mining industry."
Endurance Gold Corporation (EDG - TSX.V, "Endurance") is pleased to announce that further compilation of historic data on the Bandito REE-Ni Project has resulted in the identification of new targets and expanded the size of the altered rare earth enriched nepheline syenite and altered host rock to approximately nine square kilometers in size. Within this large alteration system, eleven target areas have been defined that have potential for significant enrichment in rare earth minerals.
Shifting technology, energy and defense needs along with volatile global economic and political pressures are changing the supply-and-demand equation for rare earth and strategic metals, opening opportunities that didn't exist a few years ago. The Cambridge House Critical Materials Investment Symposium June 3 and 4 will bring together industry experts, representatives of financial institutions, investors, end-users/manufacturers and the media to talk about solutions going forward.
Australian rare earths company Arafura Resources has successfully completed the hydrochloric acid regeneration program, a key part of its wider, previously reported technology program. The process involves taking calcium chloride residues from the phosphate circuit and re-acting them with sulphuric acid to produce re-useable hydrochloric acid, a key raw material in Arafura’s pre-leach circuit, and calcium sulphate (gypsum), a potential saleable product into various end applications.
China's rare earths exports in April were 53% down on a year earlier and 12.6% from the March figure, yet export value per tonne rose ten-fold, customs data showed on Monday. China, which controls about 97% of rare earth output, has angered customers in Japan, the United States and Europe by clamping down on production and sale of the 17 rare earth elements, citing a need to clean up highly polluting production processes and to stop illegal exports.
The prices of rare earth oxides are blasting through the stratosphere. Manufacturers are driving prices in their haste to involve the materials in production of hybrid vehicles, wind turbines, and the most high tech applications of which many sophisticated investors are unaware. These producers need the rare earth ore and are willing to pay for it on the world markets.
Latin America used to be known for its economic and political instability. But it fought off the global financial crisis with relative ease. Poverty is now falling, the middle classes are growing rapidly and asset […]
In separate transactions announced in April 2011, Molycorp reported it had acquired a 90.023% controlling stake in AS Silmet, an Estonia-based rare metal and rare earth metal producer, and a 100% interest in Santoku America, Inc., a leading producer of high-purity rare earth alloys and metals based in Arizona. The Silmet transaction was valued at about $89 million; the Santoku America transaction was valued at $17.5 million. Silmet has changed its name to AS Molycorp Silmet. Santoku America has been renamed Molycorp Metals and Alloys, Inc. Read more
As the chart below demonstrates commodity prices are driven by different factors. The precious metals prices have been the hyperbolic driver of headline commodities news relative to the broader based commodities index and oil. The latter two are more geared to industrial use as gold’s commercial use is limited. The chart highlights the divergence in the components of the commodities index. iShares S&P GSCI Commodity-Indexed Trust (GSG) tracks 24 different commodities including energy (67%), industrial metals (16%), livestock (7%) and precious metals (3%).
Advances in energy and agriculture are creating demand for previously ignored metals such as scandium, tellurium and indium. In this exclusive interview with The Energy Report, Mining Analyst John Kaiser, editor of Kaiser Research Online, explains the science that could exponentially increase the value of overlooked stocks.
While China continues to make asset driven economic decisions and now looks like a traction control experiment where the economy is like a car that is driving on ice that doesn't yet know it, QE2 ignited the bunsen burner for commodity price speculation. Last I checked, Ben Bernanke has decided to continue on with QE2 but has decided that QE3 is probably a bad idea because the true positive impact of additional money coming into the economy would be more than offset by inflation. In my opinion he's making the right call, but this call is likely going to put downward pressure on commodities and other assets.
QE, of course, only happens when interest rates hit the zero bound, so it’s impossible to disentangle the effects of QE from the effects of G3 interest rates all coming down to 1% or lower. But the effect of all these investment flows is clear: if you look at commodities as an asset class, total commodity assets under management have risen from just over $150 billion at the end of 2008 to over $400 billion today.
After sitting idly by and watching China monopolize the industry – the country is responsible for upwards of 95% of global supply – a rush to bring rare earth mine to production is on: There are now 251 rare earth projects being undertaken by 165 different companies in 24 countries. While prices have been rising rapidly, rare earth production is an expensive and complex undertaking. Very few projects can be developed for under $1bn and as the rest of the world shuttered rare earth mines metallurgical skills languished along with it.
United States Magnetic Materials Association: Defense bill calls for a competitive, multi-source rare earth inventory plan
The United States Magnetic Materials Association (“USMMA”), a trade association dedicated to restoring a competitive, secure, end-to-end rare earth supply chain to support the domestic manufacturing of rare earth permanent magnets, welcomes the inclusion of important and timely rare earth-related language in the Fiscal Year 2012 National Defense Authorization bill (H.R. 1540) that was passed by the House Armed Services Committee last night. The USMMA lauds the leadership of Representative Mike Coffman (CO-6), whose amendment recognizes current supply-chain vulnerabilities, focuses the Department of Defense on establishing an inventory of required materials, and encourages domestic manufacturing in this critical area.
Soaring demand for rare earth metals - used in the production of everything from smart phones to computer hardware to energy-efficient lights - is generating new but risky opportunities for mining companies in Canada and around the world, Ernst & Young says. "Rare earth metals are feeding the production of high-tech and green products. Demand is expected to jump more than 60% in the next five years alone," says Zahid Fazal, partner and leader of Ernst & Young's mining practice in Quebec. "The problem is China accounts for virtually all rare earths production, and their export restrictions are driving prices higher. What's more, Chinese domestic consumption of rare earth materials is predicted to outpace supply between 2012 and 2015."
Colorado Rare Earths reports analytical results delivering high contents of heavy rare earth elements
Colorado Rare Earths announced today that initial sampling during claim staking has returned high levels of the Heavy Group Rare Earth Elements (HREE). The results, based on grab samples from the Company’s claims at Iron Hill, a.k.a. Powderhorn, and Wet Mountains locations in Colorado, were analyzed by Actlabs, www.actlabs.com, of Ontario, Canada. A United States Geological Survey report, released in December 2010, “The Principal Rare Earth Elements Deposits of the United States,” identified the Iron Hill Complex and Wet Mountains Area as the only two rare earth elements deposits located in Colorado.
The Montreal Gazette reports on an Ernst & Young report released this week that points to opportunities for rare earth companies in Canada and elsewhere, as a result of REE export restrictions imposed by China: China’s clampdown on exports of rare earth metals used widely in smartphones and other electronic products, is opening up huge opportunities for the Canadian and international mining industry, consultants Ernst & Young said Wednesday.
The Canadian province of Quebec plans to develop its huge frozen northern reaches into a powerhouse of mining and renewable energy, targeting C$80 billion ($83 billion) of private and public investment. Quebec's 25-year "Plan Nord," launched on Monday, envisages funding for infrastructure, mines and the development of renewable energy, taking advantage of an improving investment climate as the earth warms and polar ice melts.
Dow Jones Newswires reports: Rare-earth mining company Molycorp Inc.'s (MCP) first-quarter loss narrowed due to higher sales volume and a jump in rare-earth prices, although the company's adjusted profit and sales growth missed analysts' expectations. Shares fell 5% to $63.13 in after-hours trading, after closing the regular session down 7.2%. The stock is up 33% this year through Tuesday's close.
Hudson Resources commenced its 2011 drill program at the company's Sarfartoq Rare Earth Element (REE) Project in Greenland. The objective of the program is threefold: (i) upgrade the resource at the ST1 Zone from the "inferred" category to the "indicated" category; (ii) expand the size of the ST1 deposit; and (iii) test several additional REE targets within the Sarfartoq Carbonatite Project.