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Rare Earths Supply at Risk Due to Growing Shift to Green Energy
Rare Earth Elements
Any global effort to save and prolong the life of Mother Earth, such as investing into and inventing technologies that use clean fuel and green energy are most welcome. But with the world still yet to determine a suitable, dependable and reliable source of rare earths outside of China, these efforts could prove detrimental to the rare earths supply chain.
Production of two rare earths metals, dysprosium and neodymium, critical components used to aid technologies in manufacturing wind turbines to generate electricity and make electric vehicles, have been found to have increased by only a few percentage points per year, according to www.clickgreen.org.uk. Versus projected global demand seen to grow by 700 per cent for neodymium and 2,600 per cent for dysprosium over the next 25 years, it is believed the supply of the precious metal could not keep up given that the two metals are most especially available almost exclusively in China.
Citing a publication in the ACS journal Environmental Science & Technology authored by Dr Randolph E. Kirchain, inventions of green technologies would definitely carry out a proposed stabilisation in atmospheric levels of carbon dioxide, the main greenhouse gas, at 450 parts per million.
However, to meet the objectives of these green technologies would mean a parallel growth in the supply of rare earths.
“To meet that need, production of dysprosium would have to grow each year at nearly twice the historic growth rate for rare earth supplies,” Mr Kirchain said.
“Although the rare earths supply base has demonstrated an impressive ability to expand over recent history, even the rare earths industry may struggle to keep up with that pace of demand growth,” the author said.
In order to keep up, shortfalls in future supply could be mitigated “through materials substitution, improved efficiency, and the increased reuse, recycling, and use of scrap.”
Rare earth metals are essential for clean energy technologies, such as PVs; hybrid and electric vehicles; high-efficiency wind turbines; smart grid technologies; compact fluorescent lights; fiber optics; lasers and hard disk drives, defense guidance and control systems; global positioning systems; and advanced industrial, military and outdoor recreation water treatment technology.
Rare earth metals are not really rare. It is the mining procedure and operations that make them rare. Unfortunately, majority of the world’s rare earth metals, about 97 per cent, are mined in China, which have considerably slashed export quotas in 2010 and 2011 for domestic consumption and manufacturing purposes.
These “economically important metals are at risk of supply disruption due to human factors such as geopolitics, resource nationalism, along with events such as strikes and accidents,” www.energytrend.com said, citing a report by the British Geological Survey.
In December 2011, the U.S. Department of Energy (DOE), in its 2011 Critical Materials Strategy, said “many clean energy technologies depend on raw materials with potential supply risks” as it assessed the 16 elements considered most critical.
Dysprosium, neodymium, terbium, europium and yttrium were included in the short-term critical supply list. On the medium term were lithium and tellurium.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
By: Esther Tanquintic-Misa
Source: http://community.nasdaq.com/News/2012-03/rare-earths-supply-at-risk-due-to-growing-shift-to-green-energy.aspx?storyid=125795
Obama’s Rare-Earths Case With WTO Won’t Ensure Security: View
Photograph by Doug Kanter/Bloomberg
The Cold War had Americans worried about a “missile gap.” Should the rise of China have us nervous about a neodymium gap?
It’s a question President Barack Obama is taking seriously, as he showed Tuesday in asking the World Trade Organization to look into China’s manipulation of the global market in so-called rare-earth elements. We wish the U.S. Defense Department would show an equal amount of concern.
Neodymium is one of 17 rare-earth metals that have become vital to industrial production and national security in our high-tech age. Its unique magnetic properties are integral to computer hard drives, hybrid-car motors, aircraft turbines and those Beats by Dr. Dre headphones your teenager apparently can’t live without.
One thing neodymium isn’t is rare — it is as commonplace in the earth’s crust as prosaic metals like copper, and scattered around the globe. Much the same can be said of praseodymium (used in Hollywood’s arc lights), samarium (guided missiles) and lanthanum (night-vision goggles). Yet, despite this abundance, China produces more than 90 percent of the global supply of rare earths.
Mining Isn’t Easy
There are many reasons for this: The ore is usually found in small quantities that aren’t cost-effective to mine and refine. Because it is often in seams of thorium and other radioactive or harmful substances, extraction can create an environmental disaster. Opening a new mine in the U.S. can cost upward of $1 billion, and can take as long as 15 years before it becomes operational. These difficulties give an advantage to China, with its vast rare-earth deposits in Inner Mongolia and elsewhere, state-financed mining operations, and lax environmental and worker protections.
It’s never good to have a single supplier develop a market stranglehold, and the problem is compounded in this case because China is a commercial and military rival with no qualms about pressing every advantage. It places quotas on exports and sets prices for rare earths far lower for the domestic market — a ploy to get Western manufacturers to move factories inside China. According to a study by Bloomberg Government, the average Chinese export price of neodymium oxide was $321 per kilogram in the summer of 2011, 66 percent higher than the domestic price and a 563 percent increase compared with the same period in 2010.
The stakes go beyond commerce: In 2010, after Japan detained a Chinese fishing captain near some disputed offshore islands, Beijing played some power diplomacy by placing an embargo on rare-earth exports to its island neighbor.
In response, Japan has been shaping a national strategy on rare earths, centered on increasing stockpiles, recycling from discarded electronics and finding new sources (its scientists believe they may have found large deposits under the ocean). Yet the jury is out on Japan’s approach, and such steps may not lend themselves to the U.S.’s military-industrial structure. Congress is rightly leery of intervening in the market through creation of a large-scale defense stockpile, and most electronic devices contain too little rare-earth metal to make recycling financially worthwhile.
On new sources, however, things are looking up. Molycorp (MCP) of Greenwood Village, Colorado, has recently reopened its Mountain Pass mine in California’s Mojave Desert, which is particularly rich in so-called light rare earths such as lanthanum, cerium, praseodymium and neodymium. Mountain Pass was shut down more than a decade ago because of radioactive discharge. This time around, however, Molycorp seems to be saying and doing all the right things environmentally, and plans to be at full production later this year.
A Market Success
Congress had considered providing loan guarantees for Molycorp’s efforts to reopen Mountain Pass. In the end, the market worked just fine. The company raised nearly $400 million in an initial public offering last July and this month reached a $1.3 billion deal to purchase Canada’s Neo Material Technologies Inc. (NEM), a major refiner of rare earths. (Although this is mostly good news, Neo Material has two plants in China, raising the troubling possibility that ore from Mountain Pass could be exported there.) Meanwhile, the other major Western company in the field, Lynas Corp. of Australia, is running into local opposition in efforts to build a refinery in Malaysia.
Still, given the importance of rare earths to the U.S. economy and national defense, the government has a role to play in the success of Molycorp and its smaller domestic rivals.
The complaint to the WTO is justified, but is hardly certain to succeed. This is a tougher issue than a 2009 case on broader raw materials that China lost, as Beijing will probably cite concerns over the environmental impact of rare-earth mining as reason for restricting exports.
Better to concentrate on increasing non-Chinese supplies. Representative Mike Coffman, a Republican who represents the Colorado district where Molycorp is based, has been pressing the Pentagon for years for a report on its rare-earths strategy. Defense officials, who have blithely dismissed the idea of a rare-earth security threat in the past, are expected to give Congress a classified briefing on the issue this month.
At the very minimum, the Pentagon needs to have its Defense Logistics Agency conduct an inventory of rare earths on hand and its potential needs over the next five years, and develop a plan should Beijing officials jack up prices or turn off the supply. It could also look at long-term purchasing contracts with Molycorp, smaller U.S. companies and even foreign, non-Chinese firms like Lynas to assure diversity of supply. These minerals could eventually be sold off to military contractors and other manufacturers.
Thirty years ago, Deng Xiaoping presciently said: “There is oil in the Middle East, there is rare earth in China.” The U.S. has seen the ill-effects of dependence on Middle Eastern petroleum. We have a chance to avoid a similar fate with neodymium.
Source: http://www.bloomberg.com/news/2012-03-13/obama-s-rare-earths-complaint-before-wto-won-t-ensure-u-s-security-view.html
Dodd-Frank, Australian Cuts Threaten Tantalum
CAPE TOWN, South Africa — Markets for tantalum metals used primarily in electronics could face short supplies by as early as 2014 in part because of reduced Australian primary production and impending restrictions from the US Dodd-Frank Wall Street reform law aimed at curbing trade of illegal and artisanal produced minerals from the Democratic Republic of Congo that are the source of the metal.
“Consequently the establishment of new tantalum sources outside the DRC we believe is imperative,” Lara Smith, managing director of Johannesburg-based Core Consultants told the Investing in Africa Mining Indaba conference here this week.
Smith said the 2008-2009 recession had caused a reduction in demand for electronics which had a knock-on effect on tantalum supplies but that studies done by her firm had concluded that if the market moves beyond a a conservative steady growth of 4% in the coming years a supply shortage could develop within three years. Consequently we believe that prices should ultimately move to reflect this circumstance.
Smith noted that tantalum reserves are dispersed around the globe with only 10% of proven reserved actually found in Africa, and only 2% located in Central Africa. “That being said, it has been estimated that since 2009 over 50% of the world tantalum supply originated from Africa and a significant portion of that is said to come from artisanal mining in the DRC,” she said.
Smith added that is probably more sensible to talk about the most likely resource base, recognizing that artisanal mine and illegal miners typically do not prove up their reserve base. “If you consider the most likely resource base then Africa would account for about 16% of global resources and Central Africa 9%,” she said.
New technologies leading to miniaturization of electric devices – which have become smaller, lighter and with more processing power – have resulted in increased usage of tantalum, Smith said, noting that in particular, tantalum-based capacitors are on the rise in automotive electronics, mobile phones, personal computers and wireless devices. Capacitors now account for 60% of tantalum consumption, compared to only 51% in 2004, she noted.
While tantalum consumption has increased by around 3.5 million tonnes since 2004, growth in tantalum demand has been relatively lackluster over the past 15 years or so when compared to other metals used in electronic sectors. But Smith said here analysis found that demand from the automotive sector could lead to three-fold growth in tantalum consumption from 2007.
On the supply side, production has traditionally been supplemented by secondary sources, including the US Defense Logistics Agency’s (DLA) stockpile sales, recycling, long-term contracts and sourcing from slags resulting from production of other metals. These secondary sources accounted for about 45% of supply in 2007, Smith noted.
But she noted that since 2007 there have been no DLA sales of tantalum. Additionally, recycling is becoming more difficult because of high costs and the miniaturization of electronic parts, which use less tantalum metal . Retrieval of tantalum from tin slag is also declining, she said, noting that another speaker at the conference had shown fore forecasts of tin supply projecting 0.8% of increased supply in 2012 and 0.2% for the next five years.
“Moreover tantalum is traditionally sold under long-term contracts as opposed to the spot market,” Smith said, noting that end-user companies have always engaged in preemptive buying. During the tech boom tantalum inventories were stored up by companies based on their projection of their demand for their products and when the tech bubble burst those stockpiles were prolonged further.
Similarly. in 2008 the economic recession and ensuing slowdown in consumer demand insured that tantalum consumers were long on supply, Smith said. “We conjecture that the reason the prices are not yet perspective of a deficit market is due to these stockpiles, which we estimate will be depleted over the next 12 months or so as consumer demand improves,” Smith said.
In terms of primary sources, in December 2008 Australia’s Talison Minerals Pty. Ltd., which since been renamed Global Advanced Metals, placed its two Australian mines on care and maintenance. The mines, Greenbushes and Wodgina, together annually accounted for 2.4 million pounds tantalum pentoxide or 38% of global tantalum supply.
Operations of the Wodgina mine restarted in January 2011 but the company indicated that they would only produce around 700,000 pounds per year, Smith said. “In reality we understand that they are producing closer to half a million pounds,” she added.
In addition to the global financial crisis, the other reason cited for halting production in Australia, was the influx of low-priced coltan minerals, from which tantalum metal is extract, coming from the DRC’s illegal and artisanal miners, Smith said.
The Dodd-Frank law enacted in July 2010 requires that companies who consume minerals from conflict zones, in particular tantalum, tin, tungsten and gold from the DRC, have to now show provenance of these minerals and demonstrate that they are not conflict or “blood” minerals.
“This could facilitate the issue of lower priced imports of coltan,” Smith said but noted that the implementation of the act has since been delayed a number of times, most recently in December.
Under the act companies are expected to be granted a grace period of 12 months to either demonstrate provenance or find alternative supply sources, Smith said. “This means that full implementation of this legislation will most likely not come into effect before the end of 2013,” she said. “Subsequently cheaper coltan from the DRC and Rwanda may continue to fill the supply gap and stabilize prices.”
Consideration of current and future tantalum project plans were used by Core Consultants in forecasting the outlook for supply demand and future price direction of this strategic metal, she said.
BY PHILIP BURGERT
Source: http://www.resourceinvestor.com/2012/02/10/dodd-frank-australian-cuts-threaten-tantalum?ref=hp
Critical Metals Vital to Our Lives in Tight Supply
Rare Earth Elements
We begin 2012 similar to how we started 2011 when it comes to rare earth, rare technical metals and rare industrial metals. China has over 90% of production and refining. The US and EU governments are scrambling to legislate, source, produce, open and reopen mines. The West has decided to continue down the road of the idea that the markets will take care of the supply and price of these metals. What is alarming is how easily the West was lulled to sleep by China´s ability to supply the world its metals cheaply and efficiently. The West concentrated on making money trading stocks and futures that dealt with these commodities. China concentrated on building the most extensive mining industry in the history of man. Here in 2012 the Department of Energy in the USA has approved a spending bill that includes $20 Million to focus on the supply issues of these metals.
The metals I am speaking about are so vital to our everyday lives. These metals are found in your mobile phones, computers, LCD and LED TV´s, hybrid cars, solar power, wind power, nuclear power, efficient lighting and medical technologies. Here is a list of metals that have been deemed critical.
- Indium RIM (Solar, Mobile Phones, LCD)
- Tellurium RIM (Solar, Computers, Semi-conductors)
- Gallium RIM (Solar, Mobile Phones, LED´s, Fuel Cells)
- Hafnium RIM (Processors, Nuclear, Lighting, Plasma Cutting Tools)
- Tantalum RIM (Capacitors, Medical Implants, Mobile Phones, Nuclear)
- Tungsten RIM (Nuclear, Armaments, Aviation)
- Yttrium REE (Lighting, Medical Technology, Magnets in Hybrids)
- Neodymium REE (Magnets in Wind power, Super Magnets, Hybrid Vehicles)
- Dysprosium REE (Computers, Nuclear, Hybrid Vehicles)
- Europium REE (Lighting, LED´s, Lasers
- Lanthanum REE (Hybrid Vehicles, Magnets, Optics)
- Cerium REE (LED´s, Catalytic Converters, Magnets)
RIM=Rare Industrial Metal REE=Rare Earth Element
The supplies of these metals could hold back the production of green technologies. According to the latest report by the Department of Energy, ¨Supply challenges for five rare earth metals may affect clean energy technology deployment in the years ahead¨. If Green technology is to become main stream, the costs of these technologies have to reach cost parity with traditional energy sources. As long as there are serious supply issues with these metals the costs can´t reach these levels. The other option is finding alternatives like Graphene and Nanotechnologies.
The US and EU need supply chains of the metals that include both mining and refining of these metals. Relying on sovereign states for critical metals such as these, leave a nation vulnerable to outside influence in both politics and economics. Environmentalists have succeeded in influencing politicians to close mines throughout the West. Politicians have legislated the mining industry into the position it is in today. The Western nations must start now to build its supply chain or continue to be at the mercy of the BRIC (Brazil, Russia, India and China) nations for its metal needs.
The best the West can do now is provide, enough metals to meet its own demands. China has reached a point where it can now demand that certain industries produce their products there. If a company decides to try to produce the product in another country China will make producing that item cost prohibitive outside of China by raising the prices of the metals.
The demand for the products these metals are used to produce, are showing few signs of slowing down even in a so-called recession. Governments are subsidizing Green technology, people are buying mobile phones across the planet and everybody wants a nice flat screen TV. Will 2012 pass without countries truly taking this opportunity to fix the problem or will they step up and make the hard decisions which can put the countries back in control over their own destiny?
Gallium Helping Us Stay Connected
- Rare Earth Metal – Gallium
The element so instrumental in the success of CIGS or Copper Indium Gallium Selenide solar panels garners little respect. If you do some research on Gallium you will see very few articles on this element. What you see is people talking about how to make melting spoons, and talk of the metal melting in your hand due to its low melting point of 85° F or 29.8° C. Here we are going to go over the history of Gallium and its uses in technology today.
Gallium has the symbol of Ga and the atomic number 31 on the periodic table of the elements. In 1875 Paul Emile Lecoq de Boisbaudran discovered Gallium spectroscopically. He saw Gallium´s characteristic two violet lines. Gallium does not occur free in nature. Lecoq was able to obtain the free element using electrolysis.
Gallium is found in bauxite, sphalerite and coal. It is primarily extracted from Aluminum and Zinc production. The exact amounts mined and recycled are very difficult to quantify. According to the United States Geological Survey the total amount mined in 2010 was approximately 106 t and the total recycled was approximately 78 t. Gallium supply is highly reliant on other Aluminum and Zinc mining for its supply, when the prices of the base metals fall the amount of Gallium available will be highly affected. Similar to other rare industrial metals, mining companies will not invest in the production of these metals because the markets are so small.
The uses of Gallium are found all around you. Semiconductors, LED´s, medicine, electronic components, CIGS solar and new tech like IGZO (Indium, Gallium, Zinc and Oxygen) LCD screens. The new iPhone 5 will have this kind of LCD. Over 90% is used in electronic components in the form GaAs (Gallium Arsenide). Recently CIGS solar panels reached an unprecedented 20.3% efficiency once again proving that CIGS is the most efficient form of solar on the market. The technology that will greatly increase the use of Gallium is smartphones. Analysts predict that smartphone use will grow at a rate of 15-25% over the next several years. Recently LED´s backlit screen TV´s and computer monitors have been all the rage. The LED screen market will continue to grow, further putting strain on the small Gallium supply.
The top producers of Gallium are China, Kazakhstan and Germany. Once again China has a strong position in the production of a rare industrial metal. The difference with Gallium is that almost 40% of the metal produced every year is coming from recycling.
With all of the new technologies coming along using Gallium what will the market for this metal look like in a few years? Unlike some metals like Silver and Gold, Gallium is not traded on the LME (London Metal Exchange). This makes the price of Gallium very stable. Rare industrial or technical metals are small markets with big possibilities. So if you are looking for an investment that is rarely talked about, Gallium could be a good option.
By: Randy Hilarski – The Rare Metals Guy
iPhone 5 to Possibly Have Sharp IGZO 4¨ Display
IGZO Graphic
Rumors are swirling around the net about what Apple is going to do about the new display for its iPhone 5. We know that it is going to be an IGZO (Indium, Gallium, Zinc , Oxygen) display. We also know that it will be 4 inches. What I do not know for sure is the manufacturer of the display. Some speculate Sony and Hitachi others say Sharp. From what I have been following it looks like it will be Sharp. Whoever makes the display the faithful are bound to be thrilled. These panels are also bound to be used in the next Apple iPad
According to Shuji Sako of Sharp, ¨The IGZO LCD panel´s performance outclasses anything attainable with conventional amorphous-silicon TFT panels.¨ IGZO transistors have mobility of its electrons up to 40 times higher than amorphous-silicon thin-film transistors. The IGZO transistors can also be made smaller and have the same performance. This helps the display save 30% in energy consumption and higher resolution over the traditional amorphous-silicon TFT panels. The display is said to perform at 330 dpi. The IGZO display would also enable the iPhone 5 to be thinner.
The demand for small and mid-size LCD panels is growing rapidly putting strains on the supply chain. What many tech blogs fail to say is that this amazing growth also puts strains on the natural resource supply chains. The technology needs Indium, Gallium and Zinc. Two of these metals have been deemed to be at Critical Levels according to the British Geological Survey and the US Geological Survey. Over 95% of these rare industrial or technical metals are supplied by China. Even if the prices of the metals go up 100% the end user will see a very small price increase because such a small amount of the metals are used in each device.
By: Randy Hilarski – The Rare Metals Guy
Rare Earth Elements are not the same as Rare Industrial Metals
Rare Earth Elements
Randy Hilarski has also released a video on this article that can be watched by clicking here.
I read articles from other writers who often refer to Rare Industrial or Technical Metals as Rare Earth elements. I would like to take some time and clear up the issue. I deal with RIM’s and REE´s on a daily basis. The two might both be considered metals but that is where the similarities end.
First we have REE´s or Rare Earth Elements. These metals consist of 17 metals, the Lanthanides plus Scandium and Yttrium on the periodic table of the elements. These metals are in a powder form, making them difficult to assay and store. One important factor that is often mentioned is that they are not rare. This is very true, but finding REE´s in large deposits is difficult.
In the mining sector REE mines are standalone mines, that focus on the mining and refining of REE´s exclusively. Currently around 97% of all REE´s are mined and refined in China. Historically REE mining and refining has been a dirty business, which has affected the environment around the mines. The elements Thorium and Uranium are often found along with the REE´s in the deposits causing the slurry to be slightly radioactive when processed. The use of highly toxic acids during the processing can also have serious environmental impact. Many companies are trying to open REE mines but they are meeting headwinds, as nations and people do not want these mines in their backyard.
Over the last few years China has dramatically cut its export of REE´s. This and the increased need for REE´s have caused a meteoric rise in the value of these metals. The one area that very few people talk about is the role of the media combined with speculators in raising the value of REE ETF´s in particular. For the last couple years REE´s were the rock stars of the metals. The news has calmed as of late, but the supply and demand factors that caused the metals to soar are still in place. Recently China closed it BaoTao mine until REE prices stabilize.
Rare Earth Metal - Indium
Rare Industrial Metals, RIM´s or Technical metals are another group entirely. The RIM´s are made up of metals used in over 80% of all products we use on a daily basis. Without these metals you would not have the world of the 21st century with our mobile phones, hybrid cars, flat screen TV´s, highly efficient solar energy and computers. Some of these metals include Indium, Tellurium, Gallium, Tantalum and Hafnium. These metals really are rare compared to the Rare Earth Metals which causes a great deal of confusion. These metals are in a metallic form, stable and easy to store and ship.
RIM´s are mined as a by-product of base or common metal mining. For example Tellurium is a by-product of Copper mining and Gallium is a by-product of Aluminum and Zinc mining. The mining of the RIM´s currently are for the most part at the mercy of the markets for the base or common metal mining. If the Copper mines of the world decide to cut production due to Copper losing value, this will have a huge impact on the amount of Tellurium that can be refined. Up until now, because of the previous small size of the RIM market, many companies do not feel the need to invest money into better technology to mine and refine these metals. The RIM´s would have to be valued much higher to gain the attention of the mining industry.
When China cut exports of REE´s they also cut exports of RIM´s. This put pressure on the value of these metals. RIM´s have increased in value, but nowhere near the meteoric rise of the REE´s. Most of the metals increased in value around 47% in 2010 and 25% so far in 2011. There is still a lot of room for growth in the value of these metals (not based on speculation like REE´s) as demand is exceeding supply now and in the future.
For Example, when REE´s and the stock market recently fell sharply the RIM´s came down slightly in value but have held their own extremely well. On a further note, according to Knut Andersen of Swiss Metal Assets, ¨Even though prices of the Rare Industrial Metals continue to go up in value, consumers will eventually only see a very small increase in the price of the end products, because there is so little of each metal used to produce these products. Also if the people can´t afford a smartphone they will still buy less expensive phones that still use the same Rare Industrial Metals¨.
The need for RIM´s has risen sharply over the years and will continue to grow at astronomical rates. China, India, South America and the whole of Africa with hundreds of millions of new consumers are now buying and using computers and mobile phones to name just a few products.
The future is bright for the technologies and the Rare Industrial Metals that make them work and for anyone who participates in stockpiling these metals now to meet future increased demand.
By: Randy Hilarski – The Rare Metals Guy
China Now Controls the Solar Industry
Solar Panels
Recently American solar companies like Solyndra, Evergreen Solar and Spectrawatt have filed for bankruptcy. These events may lead investors to believe that Solar is finished.
The US solar industry was hit hard by announcements out of Europe that some nations, like Italy, were scaling back their expenditures on solar due to their debt crisis. At the same time we have nations like India announcing a US $19 billion plan to produce 20GW of solar power by the year 2020.
Where will the solar panels for this market be manufactured?
India does not have sufficient rare industrial metal inventories or rare earth metal production to meet the demands of the government plan.
China has positioned itself as the country with 97% control over the majority of rare industrial metals and rare earth metals needed to produce high efficiency solar panels.
What does this mean for companies producing solar panels?
Among many other reasons for restricting exports of rare metals, China wants companies to produce the products in China to keep its workforce employed. If companies want to import metals from China in to produce the panels in other nations they will have to pay much higher prices for the metals due to taxes, shipping, export costs and other import costs. Accordingly, The US manufacturers will have a difficult time competing with the manufacturers in China.
The other issue that the companies do not want to talk about is government subsidies and tax breaks. Jason Burack the co-author of the, ¨Dragon Metals Report¨, and owner of www.wallstformainst.com recently said, ¨Message to all CEOs in solar, “Switch immediately to the best Solar panel technology using materials like rare earths, rare industrial metals and graphene and stop relying on the government for subsidies to produce inferior technology panels the market does not want, also a successful long term business model for any company should not be to rely on getting all of your revenue and contracts from the government, which is what many solar companies have done¨.
There are three, ¨Thin-Film PV¨ kinds of solar panels.
1. CdTe or Cadmium Telluride with an efficiency of 6%-11%.
2. a-Si or Amorphous Silicon with an efficiency of 6%-12%
3. CIGS or Copper Indium Gallium Selenide with an efficiency of 10%-20%
CIGS Advantages:
A. Highest energy yield
B. No environmentally hazardous materials
C. You can mold the panels to fit many applications
D. They can possibly bring the cost of solar energy panels down to below $1 per watt.
The other technology on the horizon is graphene composite solar panels. They are made of copper, molybdenum and graphite. Molybdenum and graphite have both been deemed highly critical to national security for many nations. Once again China has a powerful position because they control over 80% of the graphite market. So once again China has the foresight to see the technologies on the horizon and has positioned itself to prosper.
Currently 89% of the total installed solar panels worldwide are located in Germany, Japan and the USA. In the coming years we will see a growing demand from China for its own solar needs. Between China and India the demand for solar panels will far exceed our current ability to produce the panels. The costs of solar are coming down and the closer we are to grid parity, the more use of solar we will see. Since many of the metals used to produce these panels have been deemed critical to many nations national security, the prices of these metals are bound to stay elevated. China has shown that it will continue to restrict the exports of the rare industrial and rare earth metals further tightening the supply chains.
By: Randy Hilarski – The Rare Metals Guy
Chromium, are Nations Hoarding Natural Resources?
Chromium Crystals
Chromium is a topic that you rarely hear about, but in today´s environment of uncertainty and the, ¨Great Worldwide Resource Grab¨, chromium gets more attention. Recently we have the EU and USA going into Libya (oil, lithium), Iraq (oil), Afghanistan (oil pipeline, rare earths), West Africa (cobalt, tungsten, oil, gold, timber and many more). Let us not forget China and the contracts that they are signing all over the world for their natural resource needs. This all makes for some very interesting times for nations and investors alike. Rare industrial metals are no different. Chromium has been in the news so it is time to explain its uses and background.
Chromium was discovered by Louis Vauqelin in 1797. Chromium is a blue-white metal with great corrosion resistance. It has the symbol Cr with an atomic number of 24. Chromium can be polished to form a very shiny surface and is used to plate other metals to form a protective layer.
The main use of chromium is in the production of steel where it is used as a hardener, corrosion resister and helps fight decolorization. Iron and chromium form Stainless Steel which is strong and has a high resistance to heat and decomposition. The two form one of the most versatile and durable metals known in the world. Stainless steel contains approximately 10% chromium. Chromium is also used in paints, coloring in glass, and as a plating agent.
According to the USGS the top producers are South Africa, Kazakhstan and India. South Africa produces almost 50% of all chrome ore. The three countries account for 80% of all chrome ore mined. Approximately 95% of all known reserves are located in Kazakhstan and the southern tip of Africa to include Zimbabwe and South Africa.
The background of chromium is interesting, but today we have a hot topic. India is thinking about a ban on exportation of chrome ore. This is after news out of South Africa that the, ¨National Union of Mineworkers¨, called for restrictions of chrome ore exports to China. It has been speculated that China has been stockpiling chrome ore in order to control future prices. Does this sound familiar? We currently have to deal with the manipulation of the rare earths and rare industrial metals by China. As of October 2011 India and South Africa have not followed through with the plans. The next few weeks and months will be quite interesting, we are seeing an increase in the need for chromium, with a possible decrease in available supply.
Today our world is full of uncertainty. Every day brings us news of something amazing. Governments are under pressure, people are suffering, companies are folding, wonderful inventions, worldwide internet connectivity, and resources are becoming scarce. I have learned that in times like this you can either complain or build a grand future. Many fortunes were made during the US Great Depression. We are living through a worldwide recession, when we come out on the other side natural resources will be needed like never before. Where are you putting your money and future?
By: Randy Hilarski – The Rare Metals Guy
Bismuth, Stepping Out of Leads Shadow
Rare Industrial Metal - Bismuth
Today we hear much about the demise of lead and its uses because of its toxicity. This will have a huge impact on the value of the rare industrial metal we will discuss today. Enter bismuth, the brittle white metal an element symbol of Bi and atomic number 83. Bismuth was discovered in 1783 by Claude Geoffroy the Younger. This rare industrial metal is mined as a by-product of lead, silver, copper, molybdenum, tin and gold. The element is 86% as dense as lead. Bismuth is the most naturally diamagnetic metal meaning it is the most resistant to being magnetized. Mercury is the only metal that has a lower thermal conductivity. It also has a high electrical resistance. Bismuth has been classified as the heaviest naturally occurring element.
One of the most interesting aspects of bismuth is its crystalline structure that forms a spiral stair step structure. It is caused by a higher growth rate around the outside edges than on the inside edges of cooling bismuth. The beautiful colorations of the crystals are caused by variations in the thickness of the oxide layer that forms on the crystal surface which causes wavelengths of light to interfere upon reflection. When bismuth burns with oxygen present it burns with a blue flame.
Bismuths uses are growing all the time. Some of its largest uses are in cosmetics, pharmaceuticals, catalysts, metallurgical additives, galvanizing, solders, ammunition and fusible alloys. The one most people associate with bismuth is, Pepto Bismol. Lead-Bismuth Coolant is also used as a coolant for nuclear reactors.
There are a few issues that are causing alarm within the industries that use bismuth. The first is that China is implementing export controls over all rare earth elements and rare industrial metals. China produces about 80% of all the world´s refined bismuth. The second issue is lead acid batteries will soon be replaced by nickel-cadmium and lithium-ion. Lead mining is the main source of bismuth mining worldwide. Crude lead bullion contains approximately 10% bismuth which is taken out when lead is refined further using the Kroll-Betterton or the Betts process. This leaves us with 99% pure bismuth. The long-term sustainability is in jeopardy because of the lead storage battery. There is a distinct possibility that we will soon see this battery replaced. Overnight 80-90% of the lead market would be gone. This will be catastrophic for bismuth industries. The mining of bismuth would then have to rely on its other sources which provide much less metal. Recycling would have to be a major source of bismuth in the future. The problem with recycling bismuth is that many of its uses, almost 60% in pharmaceutical and cosmetic uses, would make it very difficult to meet the demand.
Once again we have the story about a rare industrial metal that is used in so many products that we use every day. How will this affect the end prices of these products? History tells us not much initially, but in the future the story could be much different. Bismuth with its many uses may be worth enough that mines open exclusively for this metal. Recently the British Geological Survey 2011 put bismuth on its list of at risk metals. Countries like Bolivia, Canada, Peru, Mexico and China will no doubt profit greatly if we have a significant rise in the value of bismuth. How will you profit?
By: Randy Hilarski – The Rare Metals Guy
Source: www.buyrareearthmetalschinaprices.com
The Rare Industrial Metals and the World
- Neodymium Magnets
Over the last year the markets have been up and down. One sector of metals has been rising steadily for years. This is the Rare Industrial Metals and Rare Earth sector. One way or another everyone on the planet is dependent on these metals. Imagine a world without them; no cell phones, no iPads, no LCD’s, no lasers, no jet aircraft, no electric vehicles, no alternative energies and no nuclear energy. National Geographic calls the rare earth complex of elements, ¨The Secret Ingredient of Almost Everything¨.
Something is happening under the radar that is having a huge impact on the price of many of the metals. China has a 90% control of all Rare Industrial Metals. China has decided to cut its exports of metals like tungsten, cobalt, indium, tellurium, tantalum and gallium. The Chinese believe that if they make the prices of these metals out of reach for European, Japanese and American industry the industries will have to bring their jobs to China. For example, this is already having an effect on the magnets industry. These magnets are critical for electric vehicles, wind power and many other applications. The USA, UK, EU, Japan and South Korea have all put the elements needed for the magnet industry and many others on their critical lists.
Over the last year, China has had a slash fest. In 2010 they cut a whopping 72% of their RIM export quotas for the last part of the year. In December, they again whittled 35% off the quota for the first half of this year and are talking about another 30% for the fall of 2011. Some speculate that the country will completely shut out the world by 2014 in order to secure their own demand and manufacturing dominance.
Obviously this is creating somewhat of an international crisis. Nations with technology backbones are currently taking heed and hedging themselves with alternative suppliers – and they are limited.
In the US, politicians are getting involved pointing out how critical RIMs / Rare Earth Elements (REEs) are to National security. Congressman Mike Coffman (R-CO) is proposing the RESTART Act of 2011 which essentially admits the US dropped the ball while depending on China to supply these vital resources. The act proposes to jumpstart a RIM/REE supply chain in the US over the course of five years.
There is no doubt other producers will pop onto the scene due to rising values. Many organizations are now making efforts to explore and exploit in light of recent economically feasible price ranges. Despite their efforts however, there are no indications the supply will outweigh demand in the short, medium or long term. With the exploding technology sectors and a push for clean energy, industry simply won’t let it happen.
What’s interesting is that RIMs are very inelastic. Their economic presence is so small in the supply chain that they barely affect end users. Take for instance indium, critical to flat panel TV’s, smart phones and solar CIGS (copper, indium, gallium selenide) solar cells. In 2003, the metals’ price was pegged at $60/Kg. Today, in a world with an average annual output over 1.2 billion smart phones and 200 million flat screens, Indium hovers around $800/kg in China before exorbitant export taxes and other duties, which in turn increases the price by 100% or more for the Western world. Despite this increase the public hasn’t felt a significant blow. In fact, many of these gadgets are getting cheaper.
As we eventually see more of an abundant supply in years to come, it will likely be allocated immediately. With emerging powerhouses like India and China growing at alarming rates, technology and clean energy advancing into the 21st century, it’s difficult to conceive how new sources will keep up. Nations will do their best to bring mines online to produce these critical rare industrial metals, the problem is that in the west these processes take years. The technology is there to produce metals much cleaner than in the past. Nations have a choice to make, either mine and have jobs in your jurisdiction or let China do the mining and have all the industrial production jobs.
By: Randy Hilarski – The Rare Metals Guy
National Defense and Tungsten
F22 Raptor
Recently we have heard a lot of news about the rare earth metals, and the supply issues these metals are having. There are a few highly critical rare industrial metals that are also having supply issues. China has a near monopoly with many of these metals. Currently China has up to a 95% monopoly on the mining and refining of many of the most important rare industrial metals also known as rare technical metals. The British Geological Survey has produced an interesting report called the Risk List 2011. Read over the list and see for yourself. The metals on this list and other lists like it are needed for over 80% of all worldwide industrial uses.
The rare industrial metal I would like to discuss today is tungsten. On the list it scored 8.5 out of 10. According to the USGS China mines 85% of all tungsten. Similar to rare earth elements China has decided to cut back on its exports of tungsten. The British Geological Survey ranks tungsten higher on its list, than it does rare earth metals. In 2010 recycled tungsten was a promising 37% of all metal used. When you have a tight supply chain and then the top producer cuts its exports, this causes huge ripples throughout the world’s economy. China is the largest producer and the largest user of tungsten. In order to protect its own supplies of tungsten, China has begun to invest in mining projects outside of its borders.
The national defense industry has grown to depend more on tungsten due to its extraordinary properties. Tungsten has the highest melting point of all metals, the highest tensile strength of all metals, and it is highly resistant to corrosion. Tungsten is one of the refractory metals, which means it has high resistance to heat and water. The other refractory metals include molybdenum, tantalum, niobium and rhenium. Here I am going to list some of the military applications of tungsten.
- Replacement for depleted uranium bullets
- Armor piercing bullets, anti-tank weapons, bunker busting systems
- Penetrators
- Shrapnel head
- Radiation protection (Submarines)
- Lubricants
- Armored vehicles
- Grenades
- Anti-vibration, counter and anti-flutter weights (Aviation)
- Superalloys for turbine blades, propellers, rotor blades and flight control surfaces.
According to the USGS the total tungsten mined in 2010 was approximately 61,000t. Total worldwide reserves are around 2,900,000t of which China has 2,000,000t. Canada, Kazakhstan, Russia and USA have significant tungsten resources. Many nations are attempting to invest in their mining industries. We have seen many news stories concerning countries like the USA, Canada, Japan, EU, Russia and Brazil investing large sums of money looking for new resources within their nations and abroad. There is much geo-political uncertainty throughout the world. Countries are seeing that they need to be independent or be at the mercy of other nations. This all means profits for rare industrial metal investors for the foreseeable future.
By Randy Hilarski – The Rare Metals Guy
www.buyrareearthmetalschinaprices.com
Why Buy and Store Metals Offshore
- Storage Facility in Zurcher Freilager AG free zone in Switzerland
One of the most common questions I hear in the metals business is, “where do I store my metals?”. This question is often posed by a person, foundation or trust that is looking to secure their investments. Usually we hear about buyers of gold, silver, platinum and palladium who want to protect their assets but now there is a growing number of clients who are looking to diversify beyond the core metals we all know so well. How do we best protect our assets today with all the uncertainty? Here I will discuss why a portion of your metals should be stored offshore, and in what form works best.
What kinds of Metals can an Entity Store Offshore?
The metals people most often store outside of the country are gold and silver although experienced metals buyers might also buy platinum and palladium. Recently clients have been able to buy other rare industrial metals like tellurium, cobalt, molybdenum, hafnium, indium and tantalum. A few years ago the average investor would not have had the ability to buy some of these metals unless they owned a company that produced items which needed these rare industrial metals.
Why is it Wise to Store Offshore?
In the 1930′s during the Great Depression the US government confiscated all privately held gold. US citizens were not able to possess their own gold again until the 1970′s. Will we have a similar situation this time around with the world in its current state of transition? How is the US government planning on fixing this situation? Many countries are choosing inflation, currency devaluation, low interest rates and austerity measures. When these techniques fail to rein in the problems will governments turn to gold and their populations’ assets? One thing I know is that indium, cobalt, tantalum, tungsten and many of the other rare industrial metals and rare earth metals are on the critical metals list of the USA, EU, Japan, Korea and China. The question is whether rare earth metals and rare industrial metals will ever be deemed so crucial to economic and industrial applications that a country may decide to control the purchase of these metals. We see what China is doing with these metals and one must ask ones’ self, “Could these control measures spread to my country?”.
The old saying, “don’t put all your eggs in one basket”, applies here. Clients commonly say, “I want to be able to touch my metals”. This is great, and encouraged but the stress of knowing so much of your assets are under one roof can be too much to handle for the average person. The metals can possibly become a liability and risk to you and your family’s safety.
Why would I not take delivery of Rare Industrial Metals and Rare Earths?
Some clients may wish to take delivery of their metals. This can be done just like gold and silver but the big difference is that these metals are used in industry. When the client takes the metals to the broker they will ask for the metals to be assayed. This is the process of taking a sample and sending it to a lab to verify purity. Also when dealing with rare industrial metals the amounts can be quite large and take up a good deal of space. Some elements like hafnium are controlled because of its use in nuclear technologies and it cannot be transported internationally. The metals trader stores the metals for the client and upon request resells the metals.
How do I Store the Metals Offshore?
When researching where to store your metals make sure to do thorough due diligence. There are many options for the investor. The most common choice is a safety deposit box in a bank. Safety deposit boxes are the most widely recognized. They are great for small allocations of metals. Storing in your second home offshore is also a common choice. This is also good for the client who has a small allocation of metals. Offshore bank vaults are also an option but can be rather expensive. The best option for clients with medium to large amounts of metals is an offshore private vault or depository. The prices are reasonable and they offer unparalleled privacy. A good example would be the Zurcher Freilager AG free zone in Switzerland.
What about Taxes?
This is a complicated issue that needs to be addressed by a tax professional. Every country has its own tax rules which are far beyond my expertise. As far as the Zurcher Freilager AG is concerned, as long as the assets are sold within the free zone it is a tax free event.
What are you doing about securing your future? Every day we hear more and more about an unstable financial market, geo political uncertainty, governments overreaching and bad economies. Wouldn’t it be prudent to have your assets spread out across the world?
What is holding you back?
By: Randy Hilarski – The Rare Metals Guy
Source: http://www.buyrareearthmetalschinaprices.com
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