Articles in Category: Minor Metals

The Rare Earths Monthly Metals Index (MMI) picked up one point, rising for a December MMI reading of 18.

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Lynas Considers Legal Action Against Malaysian Government

In last month’s installment of the Rare Earths MMI, we noted shares of Australian miner Lynas Corporation Limited got a boost on news that the Malaysian government would allow it to continue storing waste materials in the country.

However, this week the miner announced it was considering legal action, among other options, against the Malaysian government, which recently issued a statement regarding conditions for the miner’s license renewal.

According to a Lynas statement, the two conditions for renewal on Sept. 2, 2019, from the Malaysian government are: 1) the export of Water Leach Purification residue before Sept. 2, 2019, and 2) submission of an action plan for the disposal of Neutralization Underflow Residue (NUF) (which has valid approval through Feb. 5, 2019).

As readers know, China overwhelmingly dominates the global rare earths sector; however, Lynas represents the biggest rare earths miner outside of China.

Rare-Earths Elements in Mining Waste?

Given the demand for rare earths, particularly vis-a-vis high-tech applications (e.g. electrical vehicle batteries), every little bit of supply helps.

According to doctoral research cited by phys.org, it may be possible to extract quantities of rare earths from quarried ore.

“The problem is that the minerals we want are hidden in the waste heaps in very small quantities, and we do not have efficient methods for extracting them,” Wenzhong Zhang, a doctoral researcher in the Department of Chemistry at the University of Helsinki, was quoted as saying.

His research focuses primarily on recovery of rare-earths elements, namely scandium, from aluminum.

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Actual Metal Prices and Trends

Yttrium rose 1.3% to $32.68/kilogram, while terbium oxide rose 3.6% to $432.16/kilogram.

Neodymium oxide jumped 2.8% to $45,903.70/mt. Europium oxide was up 1.3% to $42.13/kilogram, while dysprosium oxide rose 9.5% to $180.13/kilogram.

The Renewables Monthly Metals Index (MMI) picked up a point this month, rising for an MMI reading of 102.

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DRC Declares Cobalt ‘Strategic’ Substance

The Democratic Republic of the Congo (DRC) — where a majority of the world’s cobalt is mined — declared cobalt to be a “strategic” substance, according to a Reuters report citing a government decree.

So, what does that mean, exactly?

Operating in the country is going to be pricier for miners like Glencore. The royalty rate for the coveted material will rise to 10%, nearly triple its previous rate, according to the report.

The decree was signed by Prime Minister Bruno Tshibala Nov. 24 and made public this week.

Cobalt is coveted for its application in batteries used in electric vehicles. However, the price of cobalt on the LME has plummeted this year, from $95,000/ton in late March to $54,750/ton this week.

2018 LME cobalt prices. Source: LME

The DRC ushered in a new mining code earlier this year, which saw an increase in royalty rates for a number of metals, including cobalt.

Glencore, a major mining player in the country, in October reported cobalt production of 28,500 tons, up 44% year over year, through the first three quarters. Its full-year guidance called for approximately 39,000 tons of production (plus-minus 2,000 tons), which would mark an increase from last year’s 27,400 tons.

Speaking of cobalt and tension with the DRC government, Bloomberg reported the government had begun an audit of cobalt produced by a Glencore unit in the country was found to have traces of uranium.

Tokyo Steel Announces Plate Price Hike

As we noted last month, Tokyo Steel announced plans to hike steel plate prices in the final month of the year.

“Plate prices have always had their own price dynamics separate from the other forms of flat rolled steel (such as HRC and CRC). Plate prices in the U.S. have remained fairly well-supported compared to the other forms of steel, so it should come as no surprise that in markets with strong construction demand, like Japan, mills would announce price increases,” we noted in a post last month.

“Interestingly, Chinese plate prices have started to slip, but those dynamics could change based on environmental curbs, whether the Japanese plate price increases stick and Chinese demand. U.S. metal-buying organizations will want to pay close attention to these price dynamics in Japan and China.”

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Actual Metal Prices and Trends

Japanese steel prices fell on the month, down to $757.12/mt. Korean steel plate fell 2.5% to $640.18, while Chinese steel plate dropped 7.5% to $637.71/mt.

U.S. steel plate rose 2.1% to $1,022/mt.

Chinese neodymium jumped 2.6% to $58,469.10/mt, while silicon rose 1.3% to $1,496.23/mt. Cobalt cathodes rose 1.3% to $96,601.10/mt.

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Before we head into the weekend, let’s take a look back at the week that was and some of the metals storylines here on MetalMiner:

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The Rare Earths Monthly Metals Index (MMI) held flat this month, again hitting an MMI reading of 17.

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China Denies Report it is Limiting Rare Earth Output

China’s dominance in the rare earths sector is well-documented.

The country’s sway in the market is significant — one should look no further than the U.S.’s $200 billion tariff list instituted in September.

An original list of Chinese products targeted for tariffs included rare earths — but when it came time to finalize the list, the rare earths were removed.

As such, as the world’s biggest producer and supplier of rare earths, China has considerable influence in the market; anything Beijing does with respect to output of rare earths is important.

According to a Reuters report citing the Shanghai Securities News, the Chinese government recently denied claims that it has slashed rare earth output in the second half of this year.

Reuters had previously reported data suggesting China was slowing exports in an effort to boost prices.

China’s Ministry of Industry and Information Technology, however, denied the claim, according to the recent report.

Lynas Gets a Boost

Meanwhile, outside of China, Australian rare earths miner Lynas saw its shares rise on news that it would be allowed to continue to store waste materials at a Malaysian facility, the Financial Times reported.

The company’s shares rose as high as 8.5% on the news before tracking back for a more modest 0.9% jump, according to the report.

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Actual Metal Prices and Trends

The price of yttrium fell 1.5% to $32.26/kilogram. Terbium oxide also fell, dropping 2.0% to $417.27/kilogram.

Neodymium oxide fell 3.0% to $44,667.10/mt.

Europium oxide fell 3.2% to $41.58/kilogram. Dysprosium oxide fell 1.6% to $164.54/kilogram.

The Rare Earths Monthly Metals Index (MMI) stood pat this month for an MMI value of 17.

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Pentagon Reviews Critical Materials Dependence

Tariffs have been flying left and right this year, impacting a wide range of products, from steel and aluminum to everyday consumer goods.

Last month, the Trump administration imposed an additional $200 billion worth in tariffs on Chinese goods, marking a significant escalation of trade tensions between the two countries (the U.S. had already imposed a total of $50 billion in tariffs on Chinese goods).

But one sector that has avoided tariffs is perhaps not so difficult to guess: rare earths.

Given China’s overwhelming dominance of the market and the U.S.’s position as a relative non-factor in the industry (the U.S.’s only rare earths mine closed in 2015), the U.S. is thus dependent on China for many critical rare earths.

According to the U.S. Geological Survey, 78% of the total amount of U.S. rare earths imports from 2013-2016 came from China, followed by: Estonia (6%), France (4%), Japan (4%) and other sources (8%). The value of imports of rare earth compounds and metals reached $150 million in 2017, up from $118 million in 2016.

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Rare earth exporters in India have lodged protests after the government snatched their rights to send these precious elements abroad.

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Rare-earth metals are a group of 17 elements, which are found in geological deposits. Some of the most abundant metals in the world are neodymium, cerium, and lanthanum.

All rare earths are classified into two groups: light rare earths (LREs), and heavy rare earths (HREs).

Just 20 years earlier, the Government of India (GoI) allowed the private sector into beach sand mining. Now, it issued a notification, wherein the right to export these rare-earth metals have been taken away.

Instead, the GoI has introduced a canalization system.

The primary aim of canalization of exports through Indian Rare Earths (IRE), according to the Financial Express, is to curtail direct private sector export of beach sand minerals and derivatives like ilmenite, rutile and zircon.

Canalizing means putting quantitative restrictions on exports.

But the move has obviously not gone down well with rare earths miners. Miners have said these checks would curtail beach sand mining activities and deprive India of a developing sector.

According to a new research report by Global Market Insights, Inc, the rare earths market size will exceed U.S. $20 billion by 2024. It’s well known that the majority of the global rare earth production capacity is in China. However, China has not shown much inclination of sharing those resources with other nations.

Thus, the focus is on countries like India and Japan — specifically India, which has a sizable reserve.

Driving this sector is the demand for magnets in automobiles, and requirements in defense and energy generation. Electric cars, for example, rely on some of rare-earth metals.

Beach sand minerals and their derivatives find diverse applications in paints and other decorative materials, papers and plastics, and high-tech applications. At present, much of India’s share of domestic production, as well as exports, are done by private sector firms.

The GoI notification said export of beach sand minerals had been brought under the STE and shall be canalized through IRE. Beach sand minerals, permitted anywhere in the export policy, will now be regulated in terms of the new policy. One of the other sources of angst for private firms in the business is that they have already made huge capital investments by way of technology and production facilities.

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According to the Financial Express report, beach sand minerals mining activity commenced in India in 1908. In addition, until 1998, other minerals were restricted only to public sector companies (except for garnet), but just after that the GoI embarked on a path of liberalization that allowed participation by the private sector.

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The Rare Earths Monthly Metals Index (MMI) fell one point for an August reading of 18.

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Rare Earths and Trade Tensions

Much has been said about the rise of trade tensions around the world, particularly between the U.S. and China.

Those tensions began to manifest in the form of the Trump administration’s steel and aluminum tariffs this past spring, which, in addition to China, have affected U.S. allies.

But what about the impact of trade conflict on rare-earth metals, a market overwhelmingly dominated by China (at approximately 90%, according to most industry estimates)?

The U.S. is threatening a potential additional $200 billion in tariffs on Chinese imports (on top of the previously announced $50 billion, of which $34 billion has already gone into effect), while China has indicated it is prepared to respond in kind.

But, as The New York Times reported last month, China could strike back in other ways, too, including disruption of supply chains that depend on rare earth metals for an end product (e.g. smartphones).

As the report notes, some rare-earths metals appeared on the Section 301 product list drawn up by U.S. Trade Representative Robert Lighthizer at President Trump’s direction.

Those metals and related compounds included:

  • scandium and yttrium, whether or not intermixed or interalloyed
  • mixtures of rare-earth oxides or of rare-earth chlorides
  • yttrium materials and compounds containing by wt. >19% but < 85% yttrium oxide equivalent
  • compounds, inorganic or organic, of rare-earth metals, of yttrium or of scandium, or of mixtures of these metals, nesoi
  • cerium compounds

With very little in the way of alternative supplies — that is, supplies of rare earths outside of China — the end result could simply be that U.S. companies will have no choice but to pay more for the metals, as an editorial in the South China Morning Post explains.

China’s dominance in the market and concerns over that fact are nothing new, nor is the situation likely to change anytime soon.

As the U.S. Geological Survey (USGS) noted earlier this year, rare earths were not mined in the U.S. at all in 2017. According to USGS, the estimated value of rare-earth compounds and metals imported by the U.S. in 2017 was $150 million, up from $118 million in 2016. According to USGS, the distribution of rare-earths imports by end use was as follows: catalysts, 55%; ceramics and glass, 15%; metallurgical applications and alloys, 10%; polishing, 5%; and other, 15%.

Outside of China

Despite China’s dominance in the rare-earths sector, that hasn’t stopped business interests from probing for new sources around the world.

Within the U.S., Alaska is one such place considered potentially viable for rare-earth mining.

Alaska Sen. Lisa Murkowski, who chairs the Energy and Natural Resources Committee, expressed concerns during a July hearing on the issue of China’s dominance of the market and the impact of potential tariffs.

“My concern, among many concerns, is if China ultimately responds to tariffs by restricting our supply of rare earths, or any number of other minerals, the U.S. could be in serious trouble. We’ve heard testimony in the past about the dangers of the concentration of supply from a handful of countries that control the supply chain,” she said, as quoted by the Anchorage Daily News. “I’m hopeful that we aren’t about to experience those dangers firsthand and will continue to urge action to reduce this significant vulnerability.”

As the report notes, at the current stage, much work remains to be done before assessing the viability of rare-earth mining in the state, including the Bokan Mountain prospect, considered to be the most promising of Alaskan sites, per the report. But availability and viability are two different things; particularly in light of the specter of potential tariffs, it is certainly worth keeping an eye on developments in rare-earth mining efforts in The Last Frontier.

Actual Metal Prices and Trends

It was a down month for many of the metals in the Rare Earths MMI basket.

The price of yttrium fell 2.8% month over month, down to $33.03/kg. Terbium oxide dropped 2.8% to $3,009.10/kg.

Neodymium oxide dropped 4.3% to $46,971.30/mt.

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Europium oxide plunged 21.5% to $46.24/kg, while dysprosium oxide fell 3.4% to $168.80/kg.

The U.S. Department of Commerce. qingwa/Adobe Stock

Before we head into the weekend, let’s take a look back at the week that was and some of the metals storylines here on MetalMiner®:

Need buying strategies for steel? Try two free months of MetalMiner’s Outlook

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

Chris Titze Imaging/Adobe Stock

Cobalt is a product we don’t often talk about, partly because of its relative scarcity but also because of the specificity of its industrial application.

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With that said, the industries it does draw interest from are high-profile ones, including the growing electric vehicle (EV) sector.

Given cobalt’s relative scarcity and the sometimes volatile state of its supply chains, even small shifts in supply can have massive impacts. According to a report by S&P Global Market Intelligence, global mined cobalt production in 2017 fell to 115,071 tons from 116,272 tons in 2016. Much of the drop came as a result of halted operations at the Lububashi Slag Hill operation in the Democratic Republic of the Congo (DRC).

A majority of the world’s cobalt is mined in the DRC (at 60.5% in 2017), meaning the cobalt price is subject, in many cases, to the political instability of the country, often leading to production stoppages.

According to the the Herfindahl-Hirschmann Index (HHI), which helps to assess the level of competition between companies in an industry, the cobalt sector is, unsurprisingly, very concentrated.

According to the S&P report, a reading greater than 0.25 indicates a concentrated market. As of 2009, the cobalt HHI stood at approximately 0.25 and, in the ensuing years, has risen to approximately 0.38 in 2017.

Per the report, that market concentration is likely to increase in the coming years, as the S&P report claims there is “very little likelihood that the DRC will cease to be the most important source of cobalt globally.”

Outside of the DRC, the S&P report indicates cobalt production has increased at Vale’s Voisey’s Bay operation in Canada. As we recently noted, Vale inked a deal with two Canadian companies worth a total of $690 million. That, combined with the approval of an underground mine at Voisey’s Bay, will provide a “significant source” of cobalt from outside of the DRC, with the mine life possibly extending into the 2030s, the S&P report states.

As for political considerations, elections in the DRC are scheduled for the end of 2018. The country has been entrenched in a state of political limbo after President Joseph Kabila refused to step down at the end of 2016 (the end of his mandate). Kabila assumed power in 2001 shortly after the assassination of his father, Laurent-Désiré Kabila, and was elected in 2006 and re-elected in 2011.

According to the S&P analysis, post-2016 unrest “has not had a significant effect on the historically restive Lualaba and Haut-Katanga provinces hosting the Roan copper-cobalt belt,” but that there has been “lingering concern that the violence and disturbance could spread throughout the country.”

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Large multinational miners have still, nonetheless, looked to cash in on the country’s cobalt reserves, despite the challenges to the business environment posed by political instability. In addition, miners have attempted to grapple with a revamped mining code, signed into law by President Kabila in April. The new code calls for higher royalties due to the government from minerals sales. With respect to cobalt, the revamped code called for a royalty increase to 10% (up from 2%).

The Rare Earths Monthly Metals Index (MMI) stood pat this month, holding for a reading of 19. 

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The Search for Rare Earths

As we noted in an MMI post earlier this year, the discovery of a large deposit of undersea rare earths approximately just over 1,000 miles off the shores of Japan generated much excitement in the world of rare earths. Rare earths are coveted for their application in a wide range of modern technology, ranging from cellphones to laptops.

China overwhelmingly dominates the rare earths market, so the discovery of a new major source of rare earths elsewhere could pose a challenge to China’s dominance — that is, if the discovered deposit were accessible.

The undersea cache of rare earths is not accessible via current extraction technology. As a result, companies like Toyota are teaming up with scientists in order to develop the extraction technology needed to get at those valuable materials deep under the sea, according to a report by the Nikkei Asian Review. Per the report, the amount of terbium in Japanese waters is equivalent to about 11,000 years’ worth of domestic consumption (significant amounts of yttrium and dysprosium were also detected).

According to the report, the University of Tokyo’s Rare-Earth Rich Mud Development Promoting Consortium is leading a project that aims to make the discovery a commercial reality. The group is leveraging the abilities of big companies like Toyota, Shin-Etsu Chemical and JGC, and Modec, according to the report.

Ucore, Trump Administration Officials Talk U.S. Dependence on Chinese Rare Earths

Speaking of China’s dominance in the rare earths sphere, officials from Ucore Rare Metals, a Canadian rare earths firm, met with Trump administration officials in late June to discuss the U.S.’s dependence on China for the increasingly coveted metals.

According to a Ucore release, the company officials shared details on the company’s plans for a “domestic Strategic Metals Complex (SMC) in Southeast Alaska,” in addition to “the viability of development of domestic REE supplies in the Appalachian Coal District.”

“Near complete dependence on potentially unreliable foreign sources of rare earth materials remains a major national security vulnerability and one the Trump Administration is publicly committed to ending,” Ucore President and CEO Jim McKenzie said. “This vulnerability is also recognized in the U.S. Congress by the House of Representatives in its version of the 2019 National Defense Authorization Act (NDAA). As an example, Section 873 of the House NDAA prohibits the acquisition of sensitive materials, such as samarium-cobalt and neodymium-iron-boron magnets from non-allied foreign nations. If enacted into law, this requirement for a secure supply of rare earth magnets creates synergy with the forthcoming SMC construction by increasing demand for non-Chinese rare earth products.”

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Actual Metal Prices and Trends

Yttrium dropped 3.3% to $33.97/kilogram. Terbium also fell 3.3%, dropping to $460.53/kilogram.

Neodymium oxide dropped 2.5% to $49,071.90/metric ton.

Europium oxide fell 3.3% to $58.89/kilogram. Dysprosium oxide fell 3.1% to $174.78/kilogram.