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In World War I severe material shortages played havoc with production schedules and caused lengthy delays in implementing programs. This led to development of the Harbord List – a list of 42 materials deemed critical to the military.
After World War II the United States created the National Defense Stockpile (NDS) to acquire and store critical strategic materials for national defense purposes. The Defense Logistics Agency Strategic Materials (DLA Strategic Materials) oversees operations of the NDS and their primary mission is to “protect the nation against a dangerous and costly dependence upon foreign sources of supply for critical materials in times of national emergency.”
The NDS was intended for all essential civilian and military uses in times of emergencies. In 1992, Congress directed that the bulk of these stored commodities be sold. Revenues from the sales went to the Treasury General Fund and a variety of defense programs – the Foreign Military Sales program, military personnel benefits, and the buyback of broadband frequencies for military use
American Silver Eagle
The American Silver Eagle is the official silver bullion coin of the United States. It was first released by the United States Mint on November 24, 1986 and is struck only in the one troy ounce size.
The Bullion American Silver Eagle sales program ultimately came about because the US government wanted, during the 1970s and early 1980s, to sell off what it considered excess silver from the Defense National Stockpile.
“Several administrations had sought unsuccessfully to sell silver from the stockpile, arguing that domestic production of silver far exceeds strategic needs. But mining-state interests had opposed any sale, as had pro-military legislators who wanted assurances that the proceeds would be used to buy materials more urgently needed for the stockpile rather than merely to reduce the federal deficit.” Wall Street Journal
The authorizing legislation for the American Silver Eagle bullion sales program required that the silver used for the coins had to be from the Defense National Stockpile. By 2002 the DNS stockpile was so depleted of silver that if the American Silver Eagle bullion sales program was to continue further legislation was required.
On June 6, 2002, Senator Harry Reid (D-Nevada) introduced the Support of American Eagle Silver Bullion Program Act to “authorize the Secretary of the Treasury to purchase silver on the open market when the silver stockpile is depleted.”
2002 – 10,539,026 Bullion American Silver Eagles were sold.
2003 – 8,495,008 Bullion American Silver Eagles were sold, silver averaged $4.88 an ounce for the year.
2004 – 8,882,754 Bullion American Silver Eagles were sold. For 2004 the average cost of an ounce of silver was $6.67.
2005 – 8,891,025 Bullion American Silver Eagles were sold. Silver averaged $7.32 an ounce.
2006 – 10,676,522 Bullion American Silver Eagles were sold. Silver averaged $11.55 an ounce.
2007 – 9,028,036 Bullion American Silver Eagles were sold.
2008 – 20,583,000 Bullion American Silver Eagles were sold. Silver averaged $14.99 an ounce and almost 80% more Bullion American Silver Eagles were sold then in any previous year.
The US Mint suspended sales of the silver bullion coins to its network of authorized purchasers twice during the year.
In March 2008, sales increased nine times over the month before – 200,000 to 1,855,000.
In April 2008, the United States Mint had to start an allocation program, effectively rationing Silver Eagle bullion coins to authorized dealers on a weekly basis due to “unprecedented demand.”
On June 6, 2008, the Mint announced that all incoming silver planchets were being used to produce only bullion issues of the Silver Eagle and not proof or uncirculated collectible issues.
The 2008 Proof Silver Eagle became unavailable for purchase from the United States Mint in August 2008.
2009 – 30,459,000 Bullion American Silver Eagles were sold
On March 5, 2009, the United States Mint announced that the proof and uncirculated versions of the Silver Eagle coin for that year were temporarily suspended due to continuing high demand for the bullion version.
On October 6, 2009, the Mint announced that the collectible versions of the Silver Eagle coin would not be produced for 2009.
The sale of 2009 Silver Eagle bullion coins was suspended from November 24 to December 6 and the allocation program was re-instituted on December 7.
Silver Eagle bullion coins sold out on January 12, 2010.
The average cost of an ounce of silver in 2009 was $14.67
No proof Silver Eagles were released through the first ten months of the year, and there was a complete cancellation of the uncirculated Silver Eagles.
Production of the 2010 Silver Eagle bullion coins began in January instead of December as usual. The coins were distributed to authorized dealers under an allocation program until September 3.
In 2010 the US Mint sold 34,700,000 Bullion American Silver Eagle Coins.
According to the USGS’s most recent Silver Mineral Industry Survey, silver production fell to 37 tonnes in October – compared to 53 tonnes year over year (yoy).
In 2011, the United States produced approximately 1,054 tonnes of silver – down from 2010’s production of 1,154 tonnes and down from 2007’s production of 1,163 tonnes.
In 2011 the US Mint sold 39,868,500 Bullion American Silver Eagle Coins.
2011 was the first year in which official coin sales will surpass domestic silver production.
Jeff Clark of Casey Research writes “For the first time in history, sales of silver Eagle and Maple Leaf coins surpassed domestic production in both the US and Canada. Throw in the fact that by most estimates less than 5% of the US population owns any gold or silver and you can see how precarious the situation is. A supply squeeze is not out of the question – rather it is coming to look more and more likely with each passing month.”
The US Mint is required by law to mint the bullion Silver Eagles to meet public demand for precious metal coins as an investment option. The numismatic versions of the coin (proof and uncirculated) were added by the Mint solely for collectors.
United States Mint Authorized Purchasers (AP’s) ordered 3,197,000 Bullion American Silver Eagle Coins on January 3rd, the first day they went on sale. That opening day total catapulted January Bullion Eagle sales higher than half of the monthly totals in 2011.
As of January 25th 2012, 5,547,000 Bullion American Silver Eagle Coins had been sold.
Bullion Silver Eagles are guaranteed for weight and purity by the government of the United States and because of this the US government allows bullion Silver Eagles to be added to Individual Retirement Accounts (IRAs).
The twin policies of zero interest rates and the continual creation of money and credit being enacted today, by all governments and central banks, means that the purchase of precious metals is the only way to protect the value of your assets.
“Mark my words, if the interest rates on U.S. government debt truly reflected both the real level of inflation in this country and the rising risk of some form of default, rates would already by sky-high and the U.S. would resemble a massive Greece.” John Embry, Chief Investment Strategist, Sprott Asset Management
Investors are currently risk adverse and mining stocks are not well understood by the general investing public, but at least one thing is going to become very apparent to most – the best way to hedge yourself against inflation could be owning silver.
Junior resource companies offer the greatest leverage to increasing demand and rising prices for silver. Junior resource companies are soon going to have their turn under the investment spotlight and should be on every investors radar screen. Are they on yours?
If not, maybe they should be.
*Post courtesy of Richard Mills at Aheadoftheherd.com where he covers the junior resource sector.
Soraa, Bridgelux, and Osram battle for the LED substrate crown.
A four-way LED substrate battle is shaping up among sapphire, silicon carbide, silicon, and gallium nitride materials.
The prize is much cheaper LED chips and lighting products.
Soraa’s recent unstealthing added gallium nitride (GaN) to the active contender list with its GaN-on-GaN device. On the silicon (Si) front, Osram Opto CTO Ulrich Steegmueller presented the company’s Si research at a recent lighting event. Bridgelux, also researching silicon, raised $25 million in funding from China.
There are some dark horses, including glass, germanium, and aluminum nitride (AlN).
Nitride Solutions of Wichita Kansas closed an oversubscribed $2.5 million round A this month for AlN substrates, with an ultraviolet market emphasis.
High brightness LEDs (other than red) are derivatives of gallium nitride. As with semiconductors, generally, you want to build on a stable substrate with an accurate crystal lattice, but gallium nitride is unstable and defect-ridden. The stable alternatives have a lattice spacing mismatch with the GaN and the result is shattered wafers and efficiency loss. A variety of coping techniques have evolved, such as buffer layers. (For a readable backgrounder on the topic, see here.)
The status quo is sapphire. But the cost of making LEDs out of synthetic gemstones has drawn in the other contenders.
- Sapphire: the defender. Users are almost everyone but Cree; Lattice mismatch: 13 percent; Advantage: Stable, mismatch well researched; Disadvantage: Too expensive for what you get; Bottom Line: Will never meet DOE’s 20X cost reduction goal.
- Silicon Carbide: the Macintosh of substrates. Users are mainly Cree; Lattice mismatch: 3.5 percent; Advantage: Very stable. Low mismatch aided by cancelling thermal mismatch, highest thermal conductivity; Disadvantage: Priciest, almost proprietary; you may have to buy it from your toughest competitor; Bottom Line: Relatively less costly and difficult if you’re Cree, costlier and harder if you’re anyone else. Cree was a silicon carbide company before becoming an LED company.
- Silicon: Users — Research maturing in Osram Opto, Bridgelux, China; Lattice mismatch:17 percent (plus a 56 percent additive thermal mismatch); Advantages: 80 percent substrate cost reduction potential, ubiquitous, big wafers; Disadvantages: Lattice and thermal expansion mismatches from hell.
- Gallium Nitride: Users: Soraa; Lattice mismatch: 0 percent; Advantage: Lattice and thermal match from heaven, homogeneous material allows higher drive level by tuning the GaN for reduced droop; Disadvantage: Unstable, defect-ridden; Bottom line: Analogous to Cree and silicon carbide, relatively less costly and less difficult if you’re Shuji Nakamura, Steve DenBaars, and Jim Speck, much worse if you’re anybody else.
Soraa is performing a bit of a head fake by not selling LEDs, shipping only a finished MR16 halogen reflector where their compact die is able to win with superior beam concentration. However, that is essentially how all LEDs compete with high pressure sodium lamps to this day.
While we shouldn’t get ahead of ourselves, new substrates could turn some non-adapting companies into stranded whales. Cree may have a particular hazard here, with a unique, almost emotional, commitment to silicon carbide. On the principle that any new substrate will only be adopted if it has a cost or performance advantage, the battle of the substrates will, in the end, only accelerate and enhance the inevitable transition to solid-state lighting.
By: DOUG WIDNEY
Light from three ancient stars at the edge of the Milky Way indicates that the stars contain tellurium, a brittle, superconducting element that is rare on Earth.
The cosmic discovery, which also spotted traces of other heavy elements, supports the theory that these elements were synthesized in the rapidly collapsing cores of rare supernovas (stellar explosions).
“You can make iron and nickel in any ordinary supernova, anywhere in the universe,” said Anna Frebel, an astrophysicist at the Massachusetts Institute of Technology and a member of the research team. “But these heavy elements seem to only be made in specialized supernovas.”
According to the theory, heavy atoms form during rapid nuclear fusion at the heart of some supernovas. Called r-process, it sets in when a supernova core collapses, bombarding atomic nuclei with a fierce onslaught of neutrons. The result is the production of atoms heavier than iron, which then get hurled into space, enriching the cloud of gas and dust that eventually collapses to form another star.
And if the theory is right, some of those atoms ought to end up in stars like those analyzed by Frebel and the rest of her team. [Supernova Photos from Star Explosions]
To analyze the chemical composition of the three stars at the Milky Way’s edge, the researchers studied data gathered by the Hubble Space Telescope’s spectrograph, an instrument that splits incoming starlight into a spectrum of wavelengths. If an element is present in a star, the atoms of that element absorb starlight at specific wavelengths, leaving telltale dips in signal in the spectrograph’s data.
The scientists detected dips in the ultraviolet region of the spectrum at a wavelength that matched tellurium’s light absorption, signifying the presence of the rare element in the 12-billion-year-old stars. Furthermore, the abundance of tellurium relative to that of other heavy elements, such as barium and strontium, was the same in all three stars. According to Frebel, the matching ratios support the theory that a rare type of supernova may have created the elements in the bottom half of the periodic table, including tellurium.
The finding helps flesh out one chapter in the cosmic history of the elements, an ongoing effort of astronomers and nuclear physicists to understand the formation of the 94 naturally occurring types of matter.
According to Jennifer Johnson, an associate professor of astronomy at Ohio State University who was not involved in the new research, tellurium has been a “tough” element to detect because it absorbs light in the ultraviolet spectrum. UV signals tend to be flooded by sunlight and are impossible for ground-based telescopes to spot.
“If you look at the periodic table, tellurium is right in the middle of these elements that are hard for us to measure,” Johnson said in a statement. “If we need to understand how [the r-process] works in the universe, we really have to measure this part of the periodic table. It’s really cool that they got this element in this sea of unknown-ness.”
Frebel and her colleagues are attempting to fill in other spots in the periodic table, too, by looking for signs of other heavy elements in starlight. “There are still quite a few holes,” she said. “Every now and then, we can add an element, and it adds another data point that makes our work easier.”
The researchers have published their findings online in Astrophysical Journal Letters.
This story was provided by SPACE.com, a sister site to LiveScience
HONG KONG (AP) — China is poised to overtake India to become the world’s biggest gold market this year as rising incomes fuel demand for the precious metal and a weak rupee diminishes Indian purchases, an industry group said Thursday.
The amount of gold bought in China rose 20 percent in 2011 over the year before to 770 metric tons, the World Gold Council said in its annual report. That put China behind only first-place India, where 933 metric tons were bought.
Worldwide, the amount of gold purchased rose 0.4 percent to 4,0671 metric tons worth $205.5 billion.
The council said it’s “likely that China will emerge” as the world’s largest gold market for the first time in 2012.
Rising incomes in China, which is the world’s No. 2 economy, have resulted in a surge in demand for gold jewelry and other luxury goods. China became the world’s largest market for gold jewelry in the second half of 2011 as demand rose in every quarter, the report said.
Gold bars, coins and other gold-backed products are also popular because of a lack of other investment options in China.
The long-term rise in the price of gold has also made it a popular hedge against inflation — gold hit a record nominal high of $1,891.90 an ounce in August, though prices have fallen since then. Gold futures for April delivery ended trading in New York on Wednesday at $1,728.10 an ounce.
Central banks, many in developing economies, also boosted gold sales as they sought to diversify their growing piles of foreign currency reserves. They bought 439.7 metric tons of gold last year, up from 77 metric tons the year before and the highest amount since 1964, the report said.
The poor performance of China’s stock and property markets — the other two main choices for Chinese with money to invest — is boosting the popularity of gold as an investment, said Albert Cheng, a managing director at the London-based World Gold Council.
The Shanghai Composite Index is down 20 percent over the past year while house prices are starting to fall after authorities put in place curbs to cool an overheated market.
Strong Chinese demand for gold also helped sales leap 33.5 percent last year in Hong Kong, a popular destination for wealthy mainland shoppers because of lower taxes in the semiautonomous Chinese territory.
Demand for gold jewelry in India, meanwhile, fell in the second half of 2011 because of the weakening rupee, which made gold more expensive.
Indians also grappled with high inflation last year that ate away their purchasing power, so they bought smaller amounts of gold, Cheng said.
Lemnis Lighting is taking a foot-in-the-door approach to LED lightbulbs.
The startup company today announced a new line of bulbs, priced at $4.95 and $6.95, respectively, aimed at getting consumers to try out LEDs for general lighting. The bulbs, though, have some limitations.
The Pharox Blu line comes in 200-lumen and 350-lumen versions, both of which give off less light a 40-watt incandescent bulb’s 450 lumens. That means that the bulbs, which consume less than 5 watts and 8 watts, respectively, won’t give off enough light for many uses, such as lighting a whole room.
The Blu line also has a one-year warranty, versus a three-year warranty for existing Pharox line. They don’t work with a dimmer, a move to save money on manufacturing.
Lemnis is deliberately taking a no-frills approach to get consumers familiar with LED lighting, said Lemnis Lighting co-founder Warner Philips. “Customers want higher-lumen products, but they also want a model that gets them in the game and starts them testing LEDs,” he said.
In the past two years, large lighting companies have introduced LED bulbs able to give off as much light as a 60-watt or 75-watt incandescent priced around $35 or $40. They use about 80 percent less power than incandescent bulbs and are designed to last 15 to 25 years, depending on usage.
Based on online reviews, consumers who have bought LED bulbs are generally happy with the performance of the products. And costs have fallen significantly over the past several months, aided in some places by state or utility rebates.
But most consumers are not willing to do the math on how quickly LEDs pay for themselves in energy savings, Philips said. That’s causing concern in the lighting industry over how strong consumer demand is for general-lighting LEDs.
Even though they give off relatively little light, Philips suggested that the new Blu bulbs can be used for downward directional lighting in offices or in recessed cans in a kitchen. Both will be sold only through the company’s Web site, with sales yielding a low-margin profit, Philips said.
Lemnis is working on brighter LED bulbs too. In the second quarter, it plans to introduce three higher-priced models with a lighting range between 400 lumens and 800 lumens, or roughly from that of a 40-watt to a 60-watt incandescent. Prices for those will start around $10, be dimmable, and have a longer, three-year warranty, Philips said.
By: Martin LaMonica
CAPE TOWN, South Africa — Demand for cobalt used in cellular phones and electric vehicle batteries is expected to remain strong but the sector could be plagued by supply disruptions due to logistics and infrastructure problems at its principal mining source in the Democratic Republic of Congo ((DRC) and a looming threat of export quotas from China where most ores are shipped for refining.
Lara Smith, managing director of Johannesburg-based Core Consultants told the Investing in African Mining Indaba that the sector will see continued strong demand for cobalt driven by penetration rates of cellular phones in developing countries, as well as other portable devices, as well as lithium batteries for electric vehicles and robust demand from the superalloy industries.
Over 50% of world cobalt reserves are in the DR but In 2011, as previous, less than 5% of cobalt was refined in the Central African region, Smith said. “Most of it was going east to China for refinement and, in fact China remains the largest exporter of cobalt to the United States,” she said.
Cobalt has numerous uses, including superalloys and catalysts, but its growth in battery applications has outpaced all other end uses and now accounts for 27% of overall consumption, compared to only 11% in 2002, Smith said.
“If you have a look at mobile phones, with respect to batteries, 3.6 grams of cobalt is used in just about every single cellular phone and since 2005 the number of mobile phone subscribers has increased from 2 billion to 5.8 billion in 2011,” Smith said. “If you consider the average global penetration rate of cellular users was 85% in 2011, then we believe that there are still substantial gains to be had in Africa and Asia, where the penetration rates are much lower. In Africa, the penetration rates are only 42% and in Asia they are still hovering around 75%.”
One year when Smith previously spoke the a Mining Indaba audience, those figures were calculated at 34% for Africa and around 68% for Asia, Smith said. “So you can see the startling growth in only a year in this market,” she said
For laptop and tablet computer growth since 2009 has increased 35% and production is expected to double over the next five years, requiring an estimated 11,000 tonnes of cobalt, Smith said. The most exciting development in the battery market is, however, expect to be in electric vehicles. A good approximation of use, she said, is four kilograms of cobalt for a hybrid electric vehicle and six kilograms for an electric vehicle battery.
“Based on announced plans by leading automotive manufacturers, we believe that you should see about 12 million to 13 million hybrid and electric vehicles on our roads by 2020,” Smith said. “This will necessitate as much as 20,000 to 30,000 tonnes of cobalt.”
Additionally, China is expected to produce an estimated 80 million electric bicycles by 2015 and if existing technologies are adopted for these, this would place further upward pressure on cobalt.
The use of cobalt in superalloys – which are frequently used in jet engine applications – remains a major demand industry for cobalt. She noted that Boeing Co. had recently revealed the largest commercial deal in history worth $19 billion with Southwest Airlines placing an order for 208 single-aisle aircraft. Boeing has also forecast demand for 33,500 new aircraft over the next 20 years, while Airbus has speculated that the US will require almost 6,000 new passenger aircraft by 2030 and Asia will require 8,500 aircraft over the same period, Smith said.
In terms of cobalt supply, there are a number of new projects in the pipeline, but those projects are by and large contained in the DRC, “a region where geopolitics has been and could become again tumultuous,” Smith said. “Moreover, transport logistics in Africa as a whole is in need of a continental overhaul and is extremely problematic.”
This could bring supply disruptions, she said, noting that her firm had last year presented an analysis of the DRC’s logistical challenges to the industry’s Cobalt Institute. One of Smith slides from that analysis, which accompanies this article, calculates that given announced copper, cobalt and zinc projects being developed, all which compete for the same logistical infrastructure, a future mine rate of 550,000 tonnes is expected by 2016.
“And assuming that all projects come to fruition, and no upgrades to the current infrastructure, this would result in over 500 trucks queuing at the border on route from Kolwezi by 2016 and over 700 trucks thereafter,” Smith said.
In addition to the transport constraints, she noted that cobalt consuming industries are placing increased emphasis on diversifying production away from the DRC. Japan and the European Union have adopted strategies aimed at securing strategic metals though partnerships, trade agreements and acquisitions.
The US has also facilitated diversification through creating a national stockpile and financing domestic production projects, she said. “There is the looming threat, that as China accounts for the lion’s share of cobalt refinement and indeed leads the supply of cobalt imports to the United States that China could potentially restrict exports of cobalt, as they have done with numerous other commodities, including rare earths … and tungsten,” Smith said.
Such a move by China could lead to greater price volatility and increased risk of supply disruption, she added.
BY PHILIP BURGERT
Last summer, Alta Devices announced a record in the efficiency of an individual solar cell, at 27.6 percent conversion of the sun’s energy to electricity. The same company has now set an efficiency record for an entire solar panel, at 23.5 percent. The record was independently confirmed by the National Renewable Energy Laboratory (part of the Department of Energy).
Alta Devices makes solar panels using gallium arsenide cells, a more efficient material than the generally cheaper silicon-based cells. To keep prices down, though, the company uses very small amounts of gallium and arsenic, creating a layer of gallium arsenide only one micron thick. They are still only in a pilot production stage for the new panels, but are apparently starting to plan for full scale, commercial production.
The efficiency records are impressive, but translating some of the best ideas to a growing market is never an easy task. As we’ve seen before, records falling don’t necessarily change the solar market overnight. And yet every incremental improvement is an important step toward bringing solar power into a truly competitive range with fossil fuel electricity.
The president and CEO of Alta Devices, Chirstopher Norris, said in a press release last summer: “We are committed to using new scientific understanding, such as internal light generation and extraction, to push the limits of solar cell and module efficiencies while simultaneously driving production costs down through other important developments. The goal of achieving the $1 per installed watt target set by the Department of Energy has energized our entire company.”
The DOE goal he mentioned is part of the SunShot initiative. The idea is to bring solar down to six cents per kilowatt-hour by the end of the decade, which would put it right in the range of coal and natural gas. Achieving this will require improvements in a range of solar tech, from ideas like these thin gallium arsenide cells to solar thermal technology. But it would have a huge impact: according to the DOE itself, if the SunShot is achieved it “will enable solar-generated power to account for 15–18 percent of America’s electricity generation by 2030.” This will be quite a feat, as we’re still hovering below one percent today.
By: DAVE LEVITAN