Precious Metals - 29 Oct 2021
*prices before market open Oct. 29, 2021 |
Base Metals - 29 Oct 2021Copper US $9,572/t |
43-101 GeographyIn the past two weeks, there have been several projects with technical reports all over the world. The Prospector Portal Map allows you to see all the projects in the world for this week. Click here to view a map of all the world's technical reports. |
But this production capacity raises a question...where are all the metals going to come from? With $24 billion of investment into US domestic battery production to date, increased demand from the private sector for batteries is placing pressure on supplies of specialty metals, especially rare earth elements, causing concerns for defense officials. Prices for rare earths have doubled this year, creating a potential shortage for the United States. Prices of praseodymium-neodymium oxide (NdPr), two of the 17 rare earth elements that are used in magnets, increased to US$115,000 a metric tonne as of Thursday, the highest since November 2011, according to the website Shanghai Steelhome E-Commerce. In February 2021, President Biden signed an executive order directing a broad review of supply chains for critical materials, from semiconductors to pharmaceuticals, and rare-earth minerals. According to Reuters, a US department of defense official said that the United States and allied nations should mine and process more rare earths at a recent conference. "We know we cannot resolve our shared exposure to supply chain risk without a close partnership with industry...We want to work with (miners) to accelerate the transition from the lowest cost, technically acceptable sourcing, to one that reflects our values," said Danielle Miller of the Pentagon's Office of Industrial Policy at the Adamas Intelligence North American Critical Minerals Days conference. His comments in the Reuters article document the Pentagon's and the US Federal government's rising and apparent interests in public-private mining partnerships to counter China's status as the top global producer of rare earths, the 17 minerals used to make specialized magnets for weaponry, electric vehicles, and renewable power. Rare earths are not that rare, they are found across the globe, but the majority of mining and processing facilities are currently in China. China's share of global production, while still high, is declining as the metal's strategic importance is rising globally. It was above 92% as recently as 2010 but has fallen to 58% in 2020. China has a strong position in the global supply chain and is seeking to maintain this dominance through its state-run companies. China awards rare earth production quotas to six state-run companies: China Minmetals Rare Earth Co., Chinalco Rare Earth & Metals Co., Guangdong Rising Nonferrous, China Northern Rare Earth Group, China Southern Rare Earth Group, and Xiamen Tungsten. However, China plans to restructure three companies to create a state-owned company with a nearly 70% share of the domestic production quota. The move plans to accelerate the development of resources and processing technology, as well as strengthening Beijing's control over the mining sector in anticipation of extended trade tensions with Washington. China Minmetals Corp., China Aluminum Corp., and the government of Ganzhou City in Jiangxi Province, a region known for its rare earth deposits, are "planning a strategic reorganization" of its rare-earths companies, according to the listed subsidiary of CMC. By restructuring the country's rare-earth companies, the government hopes to maintain control from production to the entire supply chain, including exports. The move comes as the U.S. looks to create an alternate supply chain for rare earths. Driven in part by Beijing's “metallurgical saber-rattling”, the U.S. and allies such as Australia have ramped up mining, processing, and recycling of rare earths. In February 2021, the Pentagon announced a $30.4-million contract with Australia’s Lynas Corp., owner of the Mount Weld mine in Western Australia, to build a rare earth separation facility in Texas. The Pentagon’s award will fund construction of a facility to process light rare earths, the most common type of rare earths, commonly found in consumer goods such as cellular phones. In 2020, the U.S. Department of defense lent $28.8 million under the Defense Production Act Title III to Urban Mining in Texas. The company plans to provide a cleaner way of providing critical rare earth magnet components to reduce dependency on China by recovering rare earths from electronic waste. In November 2020, the Pentagon said it would invest $2.3 million in a California-based company called TDA Magnetics. The company doesn't manufacture magnets, but imports rare-earth-based magnetic material, often from China. In addition, the U.S. International Development Finance Corp., a state-funded lender, has invested $25 million in Ireland-based TechMet Ltd. for critical-mineral recycling projects. Reuters reported that the Pentagon also resumed its $9.6 million funding to MP Materials, owner of Mountain Pass mine in California, to create a facility there. A Chinese investor owns almost a tenth of MP Materials, creating some concern and a brief pause in funding. MP has to ship more than 50,000 tonnes of concentrated rare earths per year to China for final processing because equipment it inherited from its predecessor, Molycorp, is not operational. Chinese customers account for all of MP’s $100 million in annual revenue. The Wall Street Journal reported in April that the Pentagon said it may award up to $40 million for the minerals from Mountain Pass. The defense industry’s demand for rare earths and other metals is a much smaller fraction compared to the potential demand for rare earths in renewable technology applications. But rare earths is an example of the broader problem U.S. supply chains are facing as the new energy accelerates. It is just the beginning of a new battle for raw materials and industries. There are 80 Rare Earth technical reports on Prospector Portal. |