Unraveling the Complexity of Critical Minerals: A Call for Expertise

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In recent years, critical minerals have become a buzzword, yet the concept behind them seems newly minted. Suddenly, everything is “critical” in the resource world. But amidst this surge of attention, a fundamental issue arises—what exactly makes a mineral critical? As someone who has spent a lifetime immersed in the technical intricacies of the chemical and metallurgical properties of technology metals, I can tell you: it’s a complex question.

I’ve noticed a disturbing trend in many of the analyses I come across. As a rule, I stop reading any technical report as soon as I find a glaring error because one mistake often compounds into several. Unfortunately, in the world of critical minerals, these mistakes are rampant, especially among analysts with little to no understanding of chemistry or metallurgy. And that is a major problem.

Understanding the Core: Chemistry and Metallurgy

To the average investor, understanding the form and function of metals might seem like minutiae best left to professors or scientists. But I argue that without a proper grasp of the basic chemistry and metallurgy of these elements, any analysis of their economic importance is flawed from the start.

Let’s get one thing clear: metals are not stable in their natural form. Unlike gold, which can be found as a metal in nature, most metals exist in oxidized forms. Producing usable metals from ores involves reducing this oxidation, a complex process that transforms a mineral into its least stable form—a metal. Only a deep understanding of these processes allows us to accurately assess the feasibility and costs of mining, refining, and utilizing critical minerals.

Analysts often fall into the trap of assuming that the mineral found in the ground is ready for industrial use. This couldn’t be further from the truth. Take, for instance, neodymium—a crucial element for permanent magnets. The raw mineral containing neodymium needs to go through numerous steps: extraction, separation, purification, and alloying, all before it becomes a usable material. Each of these stages requires expertise, technology, and money—far more than what a simple price-per-kilogram calculation might suggest.

The Economics of Misunderstanding

The sheer volume of misinformation in so-called critical minerals analysis is staggering. Many of the financial pundits predicting prices for rare earths, lithium, or other critical elements five or ten years from now lack a basic understanding of the science behind these materials. Predicting future demand or supply without a deep comprehension of their chemical nature leads to misguided conclusions.

In my own reading, I regularly encounter errors like confusing common elements such as germanium, gallium, or manganese with rare earth metals. This misunderstanding stems from a lack of basic chemical education and results in inflated claims about supply and demand.

A Call for True Experts

As a metallurgist and a chemist, I do not claim to be a financial expert, but I do understand metals and minerals at a fundamental level. After decades of working in the trenches, I’ve seen firsthand how the lack of scientific knowledge can lead to poor decisions and misguided investments.

I believe it’s time to start holding analysts accountable for the quality of their assessments. Let’s create a system where we can measure the credibility of these analyses, based on sound scientific principles. This industry needs more experts, not fewer. And until we raise the standards of analysis, we risk continuing to misinform investors, governments, and industries alike.

For now, I will continue to hold my metaphorical lamp, like Diogenes, searching for truth in a world increasingly cluttered with half-truths and misunderstandings about the critical minerals we need to power the future.

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8 responses

  1. Russell Fryer Avatar
    Russell Fryer

    An Excellent article!

  2. Rare Earths Investor Avatar
    Rare Earths Investor

    I believe it’s time to start holding analysts accountable for the quality of their assessments. Let’s create a system where we can measure the credibility of these analyses, based on sound scientific principles.

    Good luck with that one Mr. Lifton. Been shouting for years about so-called analysts’ and prognosticators’ claims for an individual stock or a date for a new goal/data point to be achieved.

    For RE retail investors, it comes down to doing your own ongoing DD and then still being prepared for Murphy’s law, etc., to smack you in the face.

    Thanks as usual for an interesting viewpoint. GLTA – REI

  3. David R. Hammond, PHD Avatar
    David R. Hammond, PHD

    Another super accurate discourse, Jack; I could not agree more. This is a classic summation of what has ailed the “critical minerals” sector for decades. Spot on as per usual!

  4. Ian Chalmers Avatar
    Ian Chalmers

    100% agree Jack. I’ve tried hard to suggest to financial analysts and company promoters over several years that having a few rock samples or drill results cannot be the basis for establishing an operation based on the revenue from future projected separated rare earth (or any ‘critical’ metal) products. There is no point wasting dollars proving a billion tonnes of resource, if there is no proven path for recovery of commercially viable products.

  5. Luc Gravel Avatar
    Luc Gravel

    Totally agree Mr Lifton
    But the problem is that it is the financial analysts who have been writing the price on the metal for several years and trading large quantities of metal on futures contracts without producing any of these metals you must certainly know the LME and the CME Today this market is part of their business model and the net profit of the Banks. Go see what happened on the nickel trading in London it will just improve your understanding of the metal valuation system, probably you will become a financial specialist too.

  6. Nelson Chipangamate Avatar
    Nelson Chipangamate

    Spot on Jack! I want to only add that the experts will need to work collaboratively. The danger of a polarized approach where the chemists and financial analysts work in silos could be as detrimental as the current era of misinformation.

  7. Hugh Sharman Avatar
    Hugh Sharman

    So right, once again, Jack! As usual, the word “Europe” was not mentioned once! Mainly because Europe, where I have ended up in my own old age, has become so totally powerless and irrelevant about this truly important matter!
    However, what happens to the Global, critical mineral/metal business, when the whole World wakes up to the simple fact that the “net zero” policies, pursued only in Europe and North America where only 14% of Humanity lives today, are completely infeasible and in any case unaffordable?
    Your answer will be much appreciated by all your readers, I am sure!
    Certainly by me!

  8. Jack Lifton Avatar
    Jack Lifton

    Hugh

    The one thing that you cannot give others is the perspective of time. We can write about it and talk about it, but we cannot gift any but the remotest amount of life experience to others and that only if they both listen and understand.
    You and I grew up during the Pax Americana. We thought at first, if we thought of it at all, as the permanent way of life of the world. When economic warfare finally sank Joe Stalin’s creation, The Soviet Union, the “philosophical writer, Francis Fukyama” wrote that it was the “end of history.”
    It wasn’t.
    Cut adrift from the Soviet yoke, the Chinese re-aserted their historical view of pre-eminence.
    They have achieved now what the Soviets never could, economic and manufacturing pre-eminence without control by an oligarchy.
    We in the Euro-civilization based West are mired in a stew of self-serving oligarch puppeteers with no intent to strengthen our society or support its original values.
    Maintaining our general standards of living and way of life is now in peril.
    Our societies are economically bankrupt. Yet we piss away capital borrowed from the future to line the pockets of the amoral and their political enablers.
    Critical minerals security is trivially inexpensive, but it cannot generate enough profits to be interesting.
    That is the real problem.

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