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Current Trends for Rare Earth Market in Japan


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Mr. Shigeo Nakamura presents the current trends on the Rare Earth market in Japan at the Critical Metals Investment Symposium Jan 21, 2011

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Current Trends for Rare Earth Market in Japan

  1. 1. Current Trends of RareEarth market in Japan Critical Metals Investment Symposium In Vancouver January 21-22, 2011 AMJ Shigeo Nakamura 1
  2. 2. ContentsHistory of the RE trade Vietnam Rare Earth deposit 1Ion exchange Ore mine. Vietnam Rare Earth deposit 2Senkaku Issue and RE trade Mongolian RE depositJapanese RE import trend Mountain Pass MOLYCORPChinese share for Japan Mt. Weld project by LYNASInfluence for Japanese market Thor Lake project( Canada)from Chinese restriction Holidas Lake (Canada)US$1.25Billion budget to the Olympic Dam (Australia)new rare earth market. AMR Project (Turkey)Supply and Demand balance Lovosero mine (Russia)for world market Other Rare Earth projectRare earth reserves Mineral reserves Develop inRare Earth project Map Japan and Conclusion 2
  3. 3. The history of Rare Earth TradeI started rare earth trading from China in 1977I developed Long nang Ore and Xunwu Ore from China in 1979.I established J/V Pacific Ocean Rare Earth company(Taiwan) in 1986.I imported Yttrium Oxide from China and shared two by third of Japanesedemand a year in 1987.I established Far East Rare Metals (Hong Kong) in 1988 for RE development.I stopped Rare Earth trading from China after Beijing Tiananmen Squareincident in 1989.I started CIS Rare Earth business in 1989.(Solikamsk, Silmet, Irtish chemicaland Kirgizstan)Rare Earth business hit the record in 1997.Advanced Material Japan established and takes the exclusive right fromGRIREM Rare Earth transaction in 2004.AMJ established Rare Earth Joint Venture with Hitachi Metals and SumikinMolycorp with GRIREM in 2007.AMJ started the development of Vietnam Rare Earth project in 2010. 3
  4. 4. Ion Exchange RE mining in Jiangxi China
  5. 5. Intrusion into territorial waters of the Senkaku IslandsAfter the senkakuincident, China hasbanned the export ofrare earth. 5
  6. 6. Rare Earth Import Trends from 2000 till 2010 Nov end. 41,407Mt 39,724Mt 34,330Mt 30,515Mt 18,263Mt 26,460Mt As MaterialEnd of Nov.2010 became 23,724Mt and it will become 26,000Mt . 6
  7. 7. Rare Earth import share from China to Japanese Market45000400003500030000 Share25000 90% 90% Others20000 90% China1500010000 88% 86% 85% 5000 81% 77% 0 V 03 04 05 06 07 08 09 NO 20 20 20 20 20 20 20 10 20 Chinese import share increase year by year till 2007 then going down. 7
  8. 8. Chinese Export License Trend 8
  9. 9. Back Ground of Chinese Rare Earth Trade PolicyExport License framework of RE established from 1998.Refund of VAT (13%) discontinued from 2005.Rare earth material processing deal was prohibited from 2005.10% export tax set up for Rare Earth trading in 2006.Rare Earth metal also need export tax in 2007.15-25% export tax increased in 2008.Rare Earth Alloy export tax to set at 20%.EL supplied to only 20 companies from 47 companies in 2009.In 2010, EL frame become 30,000 tons from 50,000 tons (down to40% from previous year)Separation and refining company preparing consolidated.EL frame decreased 35% for 2011 first half planning on Dec.28.2010. 9
  10. 10. Impact on Chinese trade restrictions to the Japanese rare earth marketThe result of economic recovery in 2010, import volumeincreased 2.4 times in comparison to August 2010 andAugust 2009.(18,101 Mt from 7,582 Mt)Chinese government reduced export licence frame from500,000 Mt to 300,000 Mt (40% reduction) on July 7th in2010 level, then rare earth market has been confused.Market conditions are getting worse because of thesubstantial export ban of the Chinese government from2010 September.After the Senkaku issue, China has banned the export ofrare earths to Japan.Market is inflated over 3 times for last 2 months.Although it stopped the embargo from China in Nov.24market has remained strong till now. 10
  11. 11. The stock market reflected in therare earth market supply anddemand balance 11
  12. 12. US$1.25Billion budget to the new rare earth marketJapanese Government decided Integrated policy of US$1.25Billionbudget to the new Japanese rare earth market12 billion yen (US$150M) budget is decided to technologicaldevelopment of the substitution and decrease of the quantityconsumed.Three billion yen (US$38M) is planned to the new rare earthrecycling promotion budget.39 billion yen (US$490M) was planned for capital investment for theimprovement of the rare earth industry.30 billion yen (US$370M) was prepared for the mining venture tosecure the stable supply for Rare Earth reserves.The budget of 14 billion yen (US$180M) was planned for the guaranteeof the mining development debt. The budget of two billion yen(US$25M) is planning for the resource country.100 billion yen (US$1.25B) in total was planned including the statestock of rare earth. 12
  13. 13. Rare Earth market will be growing from 2010 till 2015. Estimation By AMJ 2010 2011 2012 2013 2014 2015 NdFeB 26,000 27,300 28,700 30,100 31,600 33,000 Ni-H 22,000 23,000 24,000 25,000 26,000 27,000Fluorescence 8,500 8,700 8,800 9,000 9,200 9,400 Catalyst 24,500 25,200 26,000 272,000 27,500 28,400 Ceramic 7,000 7,070 7,140 7,200 7,280 7,370 Polishing 19,000 19,300 19,600 19,900 20,200 20,500 Glass 11,000 11,050 11,100 11,150 11,220 11,280 Other 7,000 7,050 7,100 7,150 7,200 7,250 Total 125,000 128,670 132,450 136,500 140,200 144,200 Growth Rate from 2010 till 2015 is around 15% 13
  14. 14. Mineral reserves develop support in Japan(1)Basics investigation for Joint exploitation of resources To contribute to the exploitation of resources of the developing country with their public organization(2)Strategic mineral resources security business Investigate satellite image analysis technology and offer geological feature for information of high potential area.(3)Overseas joint geological feature structure investigation When Japanese companies explore metal and mineral fields in abroad, JOGMEC participate its project with its expense to avoid or reduce the risk. This support system is mainly involve to an excellent deposit and a large scale deposit case. 14
  15. 15. Rare Earth Reserves 15
  16. 16. Rare earth project Map Holidas Lake Stepnogorsk Great western Kazakhstan mineralSumitomo Corp 3,000Mt-5,000Mt 3,000Mt Green land Lugingol,Mush Greenland Mineral gai Khudag 20,000Mt Mongol 10,000Mt Thor Lake Avalon venture Dongpao 10,000Mt Vietnam Mt.Pas Sojiz/toyota Molycorp 5000-7000Mt 40,000Mt Nolans bore Arafura 20,000Mt Stenkanbskural Orissa South Africa India Mount Weld Toyota Great western Lynas 16 4, 000Mt mineral 22,000Mt 2,700Mt
  17. 17. Vietnam Dong Pao Rare Earth depositDong Pao deposit was researched by JOMEC from 2001and Bastenasite ore boby contained 3,170,000Mt at REO7.06% to 10.63%. Sojiz and Toyota tsusho is developing. 17
  18. 18. Vietnam RE Deposit Yen Phu deposit is located Yenbai state and 2 major deposit contained mainly middle rare earth ore at 0.1% to 7% REO. Nam Xe deposit is located Laichau state near China border and Bastenasite ore body contained REO 4% to 5% Muong Hon deposit is located Laokai near Chinese border and total 9 mining area contained 0.78% to 3.02% rare earth content. 18
  19. 19. Mongolian Rare Earth deposit Khalzan Burged Mushgai khudag Khan BogdOther REE deposits Lugiin gol 19Mushgai Khudag REE deposit
  20. 20. Kazakhstan Rare Earth Project JOGMEC sign contract for technicalassistance of Rare Earth recovery from Uranium residue of Kazatomprom. Sumitomo Corporation established the Rare Earth Joint venture company with Kazatomprom for 3,000Mt REO base project. 20
  21. 21. Mountain Pass MolycorpSumitomo corporation will studyUS$ 130 million investmentwith JOGMEC for stable supplyto Japanese market of REmaterials. Molycorp will increase production plan from 20,000Mt to 40,000Mt (REO). 21
  22. 22. Mt. Weld project Australia Australian Lynas willproduce 22,000Mt ofRare Earth from 2013.Sojiz and Rynas agreed90,000 Mt of RE supplyfor 10 years to Japanesemarket. Separation and refining process in Malaysia after floating ore dressing in Australia. JOGMEC and SOJIZ takes 30% of the share from Lynas in 2010 November 22
  23. 23. Thor Lake Project Canada 1Avalon Venture take over the Thor Lake Project in 2005 from Heclamining. Project confirms that heavy REE deposit (Tb and Dy) and lightREE deposit, at North T-zone. Lake zone contained more big number ofREE reserves. 23Strange Lake project in Nova Scotia was stopped.
  24. 24. Thor Lake Project Canada 2Y La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Lu55% 0.1 0.02 0.1 0.2 1.8 0.7 11.6 2.5 15.6 3.1 5.4 0.6 2.2 0.7 24
  25. 25. Hoidas Lake Project CanadaHoidas Lake project wasexplored by Canadian GreatWestern Minerals that is rareearth deposit near Uraniumcity in Saskatchewan Canada.This project starts from 1999and feasibility study will befinalized first half of 2008.Great western minerals willstart the production ofCerium, Lanthanum andNeodymium in 2009 or 2010.Company reported1,364,000Mt of the rare earthdeposit contained 2.59%TREO at JAK zone. 25
  26. 26. Olympic Dam AustraliaOlympic Dam project near Adelaide south Australia was developed by WMC and nowbelongs to BHP Bililiton.All the mines are about 82,000,000t reserves, and produce copper 2.4%, uranium 0.7%,gold 0.6g/t, silver 4.3g/t as a product, also there is iron rare earths deposit here.It contained Bastonesite, Florensite (a small quantity), Monazite (a small quantity) and it iscontained light rare earths mineral, as La2O3, CeO2 and Nd2O3 are the main elements. 26
  27. 27. AMR Project Turkey General Location of Aksu Diamas Project 700,000 Ton TREOOPERATIONAL COST : US$ 2–2.50 per Ton
  28. 28. Lovosero in RussianLovosero mine at Kola peninsula in Russia developedLoparite which consist of Rare Earth, Ilmenite, Tantalumand Niobium. It developed by Ural kali in Solikamsk 28region.
  29. 29. Others Rare Earth ProjectNolans Bore by Arafura Resources Limited(Australia)Frontier Rare Earth project (South Africa)Great Western Minerals(LCM) western cape provinceVergenoeg Mining Company (south Africa)Greenland minerals and energy(Greenland)Pitinga mines( Brazil) Neo Material & Mitsubishi corporationKutessai by Summit Atom rare earth company(Kazakhstan) Kazatom prom and Sumitomo corporationChavara, Manavalakurichi (Indian rare earth)Ytterby(Canada) Benson(USA) Laocai(Vietnam) Mabelcreek(Australia) as Grass-root exploration by JOGMEC 29
  30. 30. Thank you for your attention. AMJ Shigeo Nakamura 30