Jack Lifton on the biggest move by the US Federal Government in the rare earths space

21 responses

1. 

   Rare Earths Investor

   Thank you for the interview. I was very interested by the comment about there being 4 or 5 other (I am assuming processing project) proposals underway in the US. This assumption is made as the comment appeared linked to the cited Lynas Blue Line processing project as an example of one possible supplier within the proposed new US rare earths chain. Maybe JL could comment on the knowledges/skill that Lynas does or does not possess re., HRE production capability. The CEO has said that Lynas has such HRE processing knowledge already, but they haven’t demonstrated this yet.

   In fact, how many processors will the US need? Is the US thinking, now with all the devastation we are presently going through about internal RE/related supply now going beyond just their military needs (if more manufacturing is really going to be brought back to the ROW)?

   I am sure there will be no major problem re., mining materials, so naturally the choke will be the processing. Also, magnet production with the patent problems will be another interesting problem for the US to deal with within such a potential chain.

   Again, I have made the point elsewhere re., politics/environment of why I think this has all got to be underway in the US in 2020, because of potential later 2021 on permitting problems; others disagree this will be a concern.

   March 26, 2020

   Reply
   1. 

      Jack Lifton

      Rare Earths’ Investor,
      The needs of the US Dept of Defense, the DoD, for rare earth permanent magnets is relatively small, compared to the consumer products’ industries demand, and the DoD needs a large variety of part numbers most of which have small demands (by numbers required). This has been the kiss of death for the D0D’s attempt to source domestically. No existing domestic magnet producer is able to economically produce such short runs of widely different useage specifications. The consumer products industry uses up to 10 times as much tonnage of rare earth permanent magnets as the DoD, but, just as with the DoD, these magnets are already part of components and assemblies when they reach the final product assembly points. Before anyone even considers making rare earth permanent magnets again in the USA they must coordinate with the next downstream supplier in the chain to make sure that they have a customer. That next customer in the chain is not the DoD or, for example, an automobile or cell phone maker. It is a component manufacturer, and they are today, almost without exception, in southeast Asia, mainly China! The US Government needs to invoke Title 7 of the Defense Production Act, the creation of a board of industrial specialist to address and solve a problem with supply.

      March 26, 2020

      Reply
2. 

   Jack Lifton

   Due to the coronavirus shutdown I cannot get an answer

   March 26, 2020

   Reply
3. 

   Letter to the Publisher

   Excerpt: “Jack, again you are spot on regarding your profound comments about single sourcing and the health and safety issues in China. I to totally agree with these cost issues you brought to light in this interview. I look forward to the next InvestorIntel interview, with you and Tracy, next week.

   If I can be so bold as to add one example (of many) to your comment regarding health and safety within China, relates to how the by product of sodium silicate “liquid glass” was disposed of after cracking zircon. The cracking process, used in China, generates a liquid glass solution which has a very high pH value. Of course this solution would also contain “NORM” from the zircon. Once the sodium silicate solution is generated, a truck from the municipal water treatment facility would load the truck and take the solution to the water treatment plant. This high pH solution would then be used to adjust the pH of the water prior to being treated and/or shipped out for use in the city. Any solids produced would then be shipped to a cement plant for further use.

   The point of this is, the NORM is now spread throughout their society either in the water for consumption or in the cement used to build various structures. Of course North America would NEVER allow this to happen. But, just like you said Jack, we are willing to buy the cheapest materials. I know you all can take this further.

   Again Jack, it is great that you and Tracy are bringing this double standard to light!”

   March 26, 2020

   Reply
   1. 

      Jack Lifton

      The readers need to know that NORM stands for “naturally occurring radioactive materials.” The costs accruing from the cleanup of a “spill” of NORM residues at Molycorp in 1998 were a principal cause of the company’s shutdown of its mining operations at that time. Note well that no such restrictions or even oversight of any kind were ever placed by the USA on Chinese operations. We do NOT know what the Chinese do with these toxic residues.
      Note also that MP, which bought the Mountain Pass mine from the bankruptcy mines and ships 50,000 tons of ore concentrates, annually, today from Mountain Pass to the processing facilities of Shenghe Resources in China. What happens to the thorium, radium, radon and uranium in the ore? Is it removed at Mountain Pass for the citizens of California to enjoy, or does it go to China to disappear? Do the US or California (progressive) governments even care now what happens to it? As is frequently said its a good thing that regulators have double standards or they’d have no standards at all. If I’m wrong will somebody please tell me where my facts are in error?

      March 27, 2020

      Reply
4. 

   Brad Gary

   If ore is not easily obtained locally, how about DRC who are very keen on development?
   Have a look at ASX/PM8, as the shares are dirt [excuse pun] cheap at the moment for a Tier-1 near surface resource with access, water and power.

   March 26, 2020

   Reply
5. 

   Refaat Sawires , NYC USA

   If Rare earth is so valuable and needed ,
   If China does not have much surplus to export especially after corona virus affected the production was affected by Coronavirus.
   So why Lynas Corp stock price is trading at $08.
   Why the aspiring Australia company
   Arafura ( Asx – ARU ) is traded at 4 cents?
   I am puzzled.
   Hope get an explanation from the experts.
   Thank you.

   March 27, 2020

   Reply
   1. 

      Refaat Sawires

      If Rare earth metals is much needed,
      If China production was affected negatively by the Coronavirus,
      So why most of the miners stock are depressed.
      Lynn’s Corp @ 80. Cents.
      An Aspiring Australian co
      Arafura – ASX ARU is traded at 5. Cents?
      I am puzzled!
      I hope I get an explanation from the Experts.
      Thank you.

      March 27, 2020

      Reply
   2. 

      Don

      Refaat, I feel the same way, Search Minerals has a excellent rare earth project but there shares price is only 3 cents. Something Seriously Wrong. If rare earths is so valuable than why haven’t some ,Big Wig , End User, Supplier , Etc , in North America or Europe stepped up to the plate and take some of these rare earth projects of the ground.

      March 27, 2020

      Reply
6. 

   Jack Lifton

   Why are the shares of non-Chinese rare earth miners as well as some good juniors priced so low is the core question being asked above. The answer is (always) economics. Lynas, for example, is the non Chinese world’s largest producer of (light) rare earths. Even so it has a very ambitious expansion and remediation program announced. One which will cost hundreds of millions of dollars. The problem is that it has not shown institutional finance that it can generate enough profit over the next few years to fund the program. In addition the global junior mining share market has been depressed for the last year by a general lack of interest. For Arafura the problem is worse. It will need a billion dollars to develop its deposit into a mine. Then it will need to build or partner with a processing operation to separate its mixed concentrate. Before it can sell any rare earths it has to prove it can produce them continuously. Thus the first ton sold will have a cost of one billion dollars. No private investors today will risk such a sum for an unknown payout many years hence. Many ask why the big miners, Rio Tinto, BHP, and Vale, for example do not enter the rare earth business. Its simple really. There’s not enough return on their capital to tie it up in such a small volume commodity. In order for the non Chinese rare earth supply chains to revive it will be necessary for buyers to make firm orders on a cost-plus basis upon delivery. Only governments can make such commitments, and only if and when they do will private equity consider such investments as they will then have guaranteed returns. Investors in rare earth ventures whether producing now or juniors need to look for the lowest cost producers with the best grades and distributions. I do not think that the Chinese are today the lowest cost producers unless you do not capitalize health, safety, and environmental management. If in fact the Chinese are the lowest cost producers why then are they buying the total output of the Mountain Pass mine (now MP, formerly Molycorp); the total output of all the mines in Myanmar; everything produced in Burundi by Rainbow, and all the monazite that the Russians will sell them?
   I do like Search Minerals, by the way, and I think its undervalued.

   March 27, 2020

   Reply
7. 

   Rare Earths Investor

   JL – Thank you for the detailed macro response. I think that the Chinese may also be buying up most of the rare earth material globally for the point you make re., financier questions. Why would financiers look to fund more mines or particularly processing, as presently almost all roads lie through China? The Chinese catering to all ‘this stuff’ makes the funders ask themselves that exact question why put cash into such projects when presently the Chinese have it all covered and basically control the sector? Yes, any future ROW chain moves will have to be coordinated/ sponsored/guaranteed by governments.

   Relatedly, the point you make about where is all the ‘waste’ going and why isn’t this question being asked more vigorously is vital? Again, I would make the point I have made in the past. It does matter from a metals investor perspective who is in the US office. Trump has reduced EPA requirements these last 4 years. However, if the Democrats take office you can almost guarantee that there will be a profound change in attitude. Biden/Sanders will be beholding to their left and permitting of ‘perceived’ hazardous mines/processors will be ‘buried’ (at best for an unknown time for ‘review’). Even the DoD will have minimal sway on preventing the ‘new’ left agenda (as shown by military budgets over the last two decades). Therefore, any strategic moves should IMHO see permits granted and spades in action within 2020. Further, US admin’ moves in MO also will impact ROW mine/processing emergence (i.e., Canada and AUS). Without such ROW moves IMO there will be relatively little for RE investors to smile about in the 2020s unless we get another impactful Black Swan (please no more).
   GLTA

   March 28, 2020

   Reply
   1. 

      Refaat Sawires

      Thank You Mr. Lifton for your thoughtful and informative response, after all, you are the Guru on the field of Rare Earth subject.
      China will dominate the market for a long time , their eagerness and understanding of the importance of this material specially in light of the increase of Electric Cars production World wide is clear.
      China subsidize and help their R. E. industry, the side effect is suppressing the ability of of the R E produces out side of China.
      As the economic and free market forces are not favorable to small miners-outside China , their
      future without Governments intervention is not promising.
      At this stage it essential to have the concerned Governments to step up to the plate and help the small produces to protect their country’s national security and vital industry .
      US Senator Marco Rubio, FL. was stressing the need for adopting R E national strategy, is a step in this direction.
      Australian government is also helping its RE producers through grants etc.
      For Arafura Resources ltd ,they are coordinating efforts with South Korea, Germany and Japan to establish its future customers and to facilitate the needed finance for the construction and operation of a separation plant capable of delivering apprx. 4,000 tonnes per annum of NdPr oxide.
      There are many forces are working in the positive direction, but not materialized as yet,
      as of the US DOD actions , the Impact of Elon Musk Battery Gigafactories , the Electric cars etc.
      I am optimistic that your prediction that the Rare Earth Stock will be rewarding to investors.
      I am a small investor of RE stock for many Years And have seen Lynas corp traded @ $3. and Molycorp stock rise and fall from $70.00 to 3 Cents.
      Thank You again Mr Lifton for your Guidance.

      March 28, 2020

      Reply
8. 

   Jack Lifton

   GLTA, The first question I asked in Washington last winter when this all become a “hot” topic was ”
   What will happen if Trump is not re-elected, and you get a President Warren?” The answer almost universally was that “it won’t matter,” because, I was told, “We recognize the true antagonist in all of this, China.” But as we all know, bureaucrats have to be bureaucrats, and they go with the flow. Right now I believe that the plan of the US and Canadian governments is to address this issue as soon as the coronavirus problems resolves itself or subsides. I was told that might be in 6 months. If you think that Washington and Ottawa are serious then the good rare earth miners and juniors are now at bargain prices. If not,….

   March 28, 2020

   Reply
   1. 

      Refaat Sawires

      Thank you very much for responding.
      I Guess we have to play it by the Ear.

      March 28, 2020

      Reply
9. 

   Refaat sawires

   Hi Mr. Lifton

   For the sake the Nation, The Environment, and the Rare Earth Investors.
   I wonder if we can help the situation by forming a type of Non -for- Profit organization to highlight
   and lobby to the US Government, the need to pay attention to the negative impact of the Chinese monopoly of the RE industry.
   The suggested entity can also serve as a liaison with potential financiers with some interest or lack of knowledge on the subject.
   It is true that without Government support , their is no much hope for the survival of the Rare Earth producers/ Miners out side China.
   Funds to carry the above tasks can be made through contribution by environmentalists and the organization members.
   The idea and the logistics are more complicated but It may worth thinking about it
   Regards.

   March 29, 2020

   Reply
10. 

    Julien V

    Hi Jack,
    Always a pleasure to read you and watch your interviews. Backing Joe O here, i would love to get your view on those separation technology improvements

    April 11, 2020

    Reply
    1. 

       Jack Lifton

       Joe O and Julian V,

       The development and application of non traditional separation processes for the rare earths is a topic I have followed for the last decade. I will post an article soon, but in am not going to make selections among them quite yet. There may soon be pre-production pilot plants for several new or newly applied (to rare earths) processes. There are also developments in rare earth metal and alloy making that could well be game changers. In May I will be interviewing a scientist whose company may well have perfected a process for producing critical metals, including rare earths, that eliminates the need for fluoride intermediates. That interview will be on the new website, The Technology Metals Show.

       April 11, 2020

       Reply
11. 

    Refaat Sawires

    To: Jack Liston
    We haven’t heard from you for awhile,
    What do you think of the recent multi Trillion program spending program to enhance the USA economy recovery ,
    Will it has an impact on the Race earth subject, especially ,
    on light of the new awakening of keeping our non reliance on China for the strategic materials.

    April 11, 2020

    Reply
    1. 

       Jack Lifton

       Refaat Sawires,
       I have been told that within 6 months a major push will be made in insourcing critical metals especially those for the supply of which we are dependent upon China.

       April 11, 2020

       Reply