Rare Earth News Briefing 3.2013


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The London Commodity Markets rare earths review collects news from around the world related to the rare earth elements industry.

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Rare Earth News Briefing 3.2013

  1. 1. LCM Rare EarthsNews Review March 2013 The LCM Rare Earths News Review is a monthly report compiled for London Commodity Markets to provide a snapshot of the state of the global rare earths industry.London Commodity MarketsCitibank Tower, 25 Canada Square, Canary Wharf, London E14 5LQTel: 00 44 (0) 203 514 600 Fax: 00 44 203 514 6001 3/15/2013
  2. 2. New boss signals new ‘era’ for Lynasas non-Chinese rare earths supplier Australian rare earths mining company Lynas Corporation Ltd recently announced that its current CEO, Nick Curtis, will be replaced by the end of March. Eric Noyrez will take over the rare earths giant from CEO Nick Curtis, the company said in a statement. Lynas said that the replacement was planned and reflects the company’s shift from development to production. Sydney-based Lynas, the second-best performer on Australia’s benchmark stock index last year, is set to become the first newsource of supply outside China in at least two decades with the start up this year of the A$535 million Mt. Weld project, theworld’s richest deposit of rare earths according to Lynas.Curtis will remain on the Board as non-executive Chairman and in that capacity will continue to focus on strategy developmentand remain integrally involved in the development and implementation of Lynas’ Shared Value program.He will also continue to represent Lynas at the World Economic Forum and Co-Chair the WEF’s Global Growth Companiesgroup, the company said.The Lynas board also said that Liam Forde be appointed Deputy Chairman. Forde has been a Director of Lynas since 2007.“Nick has been the inspirational force driving Lynas for the past 12 years,” Eric Noyrez said.“It was his experience in China that provided the pioneering vision to see the potential of the rich Mount Weld deposit, and itwas his foresight and resilience that has ensured Lynas is now well capitalised and entering a new era as the first significantnon-Chinese supplier of rare earths to original equipment manufacturers.”Nick Curtis said: “Achieving our first rare earths production last week is a significant transformational milestone, and a fittingtime for us to allow Eric to take over all executive responsibility.”The announcement came just days after Lynas revealed that its controversial Malaysia had produced its first rare earthsproducts for customers.Photo © Nick Curtis Photo Michael Armstrong-Lynas CorpLynass Nick Curtis builds fortunewith bet on Rare EarthsNick Curtis made a A$5 million ($5 million) contrarian bet in 2002 to develop an Australian rare earth mine, aiming to challengeChina’s control of global supply of the metals. His company, Lynas Corp., now has a market value of $3.5 billion.Curtis, 53, saw his gamble start to pay off last year when China slashed rare earth exports, causing prices to surge as much as13-fold and setting off a scramble to lock in alternative sources of the metals used in missile guidance systems, iPods and hybridcars.Page | 1
  3. 3. With China controlling more than 95 per cent of the world’s rare earths, Lynas’s stock jumped almost fourfold since June 30 asinvestors sought more secure future supply.“The dominance of China in rare earths was unsustainable,” Curtis, chief executive officer of Lynas, said in an interview. “I’dpictured the need for order in the industry, that these were important metals that would ultimately need a stable, secure non-China supply chain,” Curtis said.Mining PriorityChina made rare earths production a priority in the early 1990s under Deng Xiaoping, dominating the market, pushing downprices and rendering mines elsewhere uneconomical. The government introduced its export quota system in 1999.Rare earth shortages followed the government’s directive in 2006 to create larger domestic companies while curbing outputand exports.About 50 per cent of global rare earth demand comes from customers outside China and they are looking elsewhere forsupplies, Deutsche Bank AG said in a report last year. Global demand for rare earths is forecast to rise to $11.2 billion by 2014from $7.8 billion last year, Lynas said in a presentation last month.“Nick’s always been an entrepreneur,” said Warwick Grigor, an equity analyst at BGF Equity Pty Ltd. in Sydney, who’s trackedthe “exceptional” Mt. Weld deposit since the mid-1980s. “He saw an opportunity there. It’s probably an understanding of themarket he’s picked up from dealing with the Chinese.”Full story and source: By Elisabeth Behrmann for Bloomberg.comBill aimed at securing rare earthsupply reintroduced to US CongressUS Representative Hank Johnson has reintroduced the Resource Assessment of Rare Earths (RARE) Act of 2013 to Congress.It is a bill aimed at securing rare earth supplies and reducing China’s monopoly on the market, has been reintroduced to.Critical to high-tech clean-energy and defence manufacturing, rare earth elements (REEs) are strategic minerals used in theproduction of cutting-edge technologies such as wind turbines, advanced batteries, powerful magnets, and military radarsystems.China accounts for 97% of global rare earth element production and has demonstrated a willingness to restrict REE exports. TheChinese monopoly is a strategic vulnerability for the United States that could undermine national security and competitivenessin the defence and clean-energy sectors.“Like President Obama, I am committed to a future powered by clean energy,” said Johnson. “Without secure access to rareearth elements, we will be unable to lead the world in clean-tech. The RARE Act will dramatically advance our ability to accessrare earths worldwide.”The USGS global assessment, conducted with geological surveys of partner nations around the world, will identify and quantifyindividual rare earth elements in known deposits, improve understanding of the distribution and formation of rare earthelement deposits, assess likely undiscovered deposits worldwide, analyse the state of the complete rare earths supply chainfrom mining to manufacturing, and recommend further research and steps to improve our understanding and ensure access.Rep. Markey (D-Mass.), Ranking Member on the House Natural Resources Committee, said that if America is to keep pace withChina and Germany in clean energy technology, access to rare earth elements will be crucial.“From wind turbines to solar panels to energy efficient light bulbs, America needs a reliable supply of rare earth materials tomanufacture our clean energy future,” said Markey. “Unfortunately, we have gone from self-reliance in the production of ourrare earth materials to 100 per cent reliance on imports, mostly from China. This bill will help reverse that troubling trend andgive industry the tools and information to get America back in the rare earths business.”Page | 2
  4. 4. In a letter to Rep. Johnson, U.S. Magnetic Materials Association President Ed Richardson wrote: “This bill represents animportant piece of a much-needed comprehensive approach to understanding current and future domestic and internationalsupply of and demand for rare earth elements.”Source: HankJohnson.House.GovPhillipines set for rare earth plantIf things go according to plans, the Philippines may start producing rare earths by 2014.Sumitomo Metal Mining Co. Ltd (SMM) is building a scandium recovery plant in Palawan later this year, and expects the pilotfacility to operate in 2014.“For some time, SMM has been working to develop a scandium recovery method at its Niihama Research Laboratories in EhimePrefecture,” the company noted on its website. “This effort has now led to the attainment of technology enabling efficient recovery of scandium from the nickel-cobalt mixedsulfide production process,” SMM said.Source: GMA NEWS OnlineUS miner’s loss bigger than expectedMolycorp Inc. (MCP), owner of the largest rare-earth deposit outside China, reported a wider-than-expected loss after thecompany missed a production target and prices for the commodities declined.The fourth-quarter net loss was $359.6 million, or $2.91 a share, the Greenwood Village, Colorado-based company saidyesterday in a statement after the close of trading. The company reported net income of $26.6 million or 26 cents a year earlier.Full story and source: By Sonja Elmquist for Bloomberg.comPage | 3
  5. 5. About London Commodity MarketsWith over a century of combined experience in the rare earth elements and alternative investments market, our team atLondon Commodity Markets have a proven track history of delivering excellent consultation as well as an unrivalled service toall our clients.As a result of this unrivalled standard of service, quality advice and ethical approach to the marketplace, London CommodityMarkets have become the globe’s fastest growing rare earth elements and alternative investments company.http://londoncommoditymarkets.com/HEAD OFFICECitibank Tower, 25 Canada Square, Canary Wharf, London E14 5LQTel: 00 44 (0) 203 514 6000 / Fax: 00 44 (0) 203 514 6001Email: info@londoncommoditymarkets.comHome Counties OfficeSuite 1A, Park Street, Maidenhead, Berkshire SL6 1SLT: 00 44 (0) 203 393 3176Disclaimer:This document is issued by London Commodity Markets for the sole purpose of assisting the recipient in deciding whether to proceed with further analysis of this potentialproject and opportunity. The information in this document is general and informational only and is not intended to constitute professional or investment advice, or to beconstrued as an offer or solicitation for the subscription or purchase or sale of any securities, or as an invitation, inducement or intermediation for the sale, subscription orpurchase of securities. This document does not take into account the recipient’s particular investment objectives or financial situation. Before making any investmentdecision, the recipient should conduct its own investigation and analysis of the project, as well as any data, pricing and projections described herein. London CommodityMarkets does not give any warranty or representation as to the reliability or accuracy of the information contained herein, nor does it guarantee that the stated pricing andprojections will be available to the recipient.London Commodity Markets are neither registered nor regulated by the FSA, and are not authorised to carry out regulated activities. All markets relating to Rare EarthElements, Oxides and Metals are not regulated by the FSA, and as such anyone investing in these markets would not have access to the Financial Ombudsman Service (FOS) orFinancial Services Compensation Scheme (FSCS).The information contained herein is for information purposes only, and is not intended for trading purposes or deemed to be investment advice or constitute a service.London Commodity Markets, directors or any of its staff, agents, creators and administrators of londoncommoditymarkets.com website shall not be liable for any errors ordelays in the content of these pages, or for any actions taken in reliance thereon. As with any Investment there is a risk of losing money. Rare Earth Products are alternativeinvestments and such should be regarded as high risk.LONDON COMMODITY MARKETS IS NOT REGULATED BY THE FSA OR SEC.Page | 4