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American Resources Policy Network
Promoting the development of American mineral resources.
  • The Geo-Politics of Rare Earths: China Reported to Add to Stockpile

    ARPN readers know that one of the core tenets of the Resource Wars thesis is that the market for strategic and critical metals is never immune to government interventions. Witness today’s Bloomberg report: “China Said to Add 10,000 Tons to Rare Earths Stockpiles.”

    Bloomberg reports:

    “China may stockpile more medium-to-heavy rare earths this year such as terbium, lutetium and yttrium, which are used in applications ranging from lasers to nuclear reactors, said China Merchants’ Peng [Bo].

    “China’s own industrial sector, in its rudimentary form, isn’t yet able to make full use of the country’s output, Peng said. The government is likely to hoard these elements for future use, she said.

    “‘The mining and refining industry, hampered by a drastic slump in prices, sees the purchase as a life-saver,’ said Chen Huan, an analyst at Beijing Antaike Information Development Co. ‘Prices the government agreed to pay are much higher than the prevailing market price.’”

    In March, the World Trade Organization ruled in favor of the U.S., Japan and EU’s contention that China’s Rare Earths export quotas were not justified. As a source within one of China’s state-owned enterprises told Bloomberg:

    “‘China is facing imminent pressure to abolish the export quota, so stockpiling is part of the policy reaction to help prop up prices and keep more of the resources at home for future use.’”

    As a follow-on, ARPN will share any U.S. Government reaction to this move – if in fact there is a reaction.

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  • Tesla Motors’ Gigafactory to Drive Critical Mineral Demand

    The graphite, lithium and cobalt industries are set for major demand surges as Tesla Motors prepares to break ground on its super-battery plant, the Gigafactory, next month.

    The high-end EV manufacturer is looking to double the world’s battery output as it seeks to bring the production cost of battery packs down in a bid to spark mass EV uptake.

    The company is aiming to begin construction on the Gigafactory in June 2014 with an old airfield in Reno, Nevada rumoured to be the favoured site.

    One of the biggest impacts of the Gigafactory will be demand for the critical minerals that will fuel it. Lithium, graphite and cobalt are all set to be key raw materials to make Tesla’s lithium-ion batteries, but the question remains whether the company can get the volumes and consistent quality it needs in time.

    What follows is an analysis on the potential volumes of critical minerals Tesla would need for a Gigafactory operating at capacity, which is expected in 2020.

    Graphite demand up 152%

    Graphite will be the largest input raw material for Tesla. Should the company choose natural graphite, it would require as much as 126,000 tonnes of flake graphite each year in the form of 50,000 tonnes of the battery-grade material, spherical graphite.

    This is an increase of 152% on today’s battery demand for the mineral. It equates to 6 new graphite mines on the basis of today’s 30,000 tpa mine size average and the yield of suitable material gained from the mine.

    Graphite — both natural and synthetic — is used as the anode in a battery.

    China is the leading producer of flake graphite and the leading processor of battery grade spherical graphite today. But the country is aiming to consolidate operations which could see it withdraw somewhat from the international market place.

    Lithium demand up 50%

    Lithium, the second largest input mineral by volume, will see demand increase by 25,000 tonnes a year from a Gigafactory at capacity. This is an increase in demand from the battery sector of 50% on 2013 levels.

    Mined as a mineral and processed into a chemical, lithium is used as the cathode material in both hydroxide and carbonate form.

    Chile is the leading producer of battery grade lithium today.

    Cobalt demand up 17%

    Cobalt demand from the battery sector could rise as much as 17% on 2013 levels thanks to Tesla’s plans. This is the equivalent of 7,000 tonnes a year.

    The metal is also used as a cathode material in lithium-ion batteries.

    The leading supplier of cobalt is the war-torn country, DRC Congo, which supplies 55% of the world’s total. Tesla has stated it does not get its cobalt from the Congo; that highlights the lack of dedicated cobalt mines around the world, with most supply coming as a by-product such as is the case of copper mining in Africa.

    It is also important to note besides the Congo, there is no large producer of cobalt, but rather many countries producing very small amounts, varying from 3-7,000 tpa. Taken together, they collectively equate to the remaining 45% of global supply.

    Other less critical raw materials Tesla will need include nickel, bauxite(aluminium), and copper. The company will not be using rare earths, as its cars do not use a permanent magnet.

    A free special report, “Tesla’s $5bn question: What will Tesla Motors’ battery super-plant mean for critical mineral demand,” will be published next week via Twitter, Linkedin, and through ARPN and Industrial Minerals.

    Simon Moores is an American Resources Policy Network Expert. Learn more here.

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  • 3D Printing & the “New Rare Earths”

    “3D printing companies are the new Rare Earths.” Thus spake Twitter, a few hundred-million Tweets ago, giving birth to the new meme on what matters most in our constantly-evolving technology world. Meaning, of course, that the furor over Rare Earths sparked three years back — when China used its then-97% production monopoly as a weapon [...]
  • The Epoch Times on why the Pentagon wants “to buy rocks”

    The Epoch Times’s Matthew Robertson takes a closer look at the Pentagon’s request to Congress “for over a billion dollars. To buy rocks” – at a time when budget cuts should be the order of the day in Washington. He notes that while in previous years, the Department of Defense merely noted China’s near-total monopoly [...]
  • New NCPA report traces REE potential and related obstacles in the U.S.

    It’s time the United States overhaul its outdated and rigid permitting process and begin harnessing our vast rare earths potential while promoting economic and job growth – that’s not just something the American Resources Policy Network has been advocating for quite some time, it is also the finding of a new study released by our [...]
  • Alaska Senate passes resolution in support of REE exploration

    Alaska continues to be a state leader when it comes to formulating mineral resource policy. In line with Gov. Sean Parnell’s five-part strategy to support the mining industry, the State Senate has passed a resolution in support of in-state Rare Earths exploration, which urges state agencies and the federal government to lend its support to [...]
  • Antimony metal to be watched

    In a piece for DailyMarkets.com, analyst Jeb Handwerger zeroes in on Antimony. Antimony is a key component in fire retardants as well as batteries, ceramics, touch-screen technology, glass, and ammunition and has seen largely stable prices in unstable economic times. With China being its top producer controlling nearly 90 percent of global supply and other [...]
  • Study confirms occurrence of REEs in Germany

    Early last year, we highlighted new Rare Earth exploration efforts in Saxony, Germany, where a newly formed company called Seltene Erden Storkwitz AG was slated to kick off drilling operations in the East German state. They did kick off, and the long-suspected occurrence of Rare Earths in the area has now been confirmed by a [...]
  • New year, new players in the REE game?

    In an ongoing reaction to China’s restrictive mineral policies, countries are expanding their efforts to look for alternative supplies of sought-after commodities. Case in point is Japan, which in recent months has inked cooperative agreements with a number of other nations including India and Vietnam. Its most recent effort is focused on what is better [...]
  • The OPEC of Rare Earths – China’s Resource Stranglehold and its National Security Implications

    In his latest column for Real Clear World, American Resources Principal Daniel McGroarty zeros in on China’s dominance of the Rare Earths market. Invoking lopsided production numbers – in spite of international efforts to develop Rare Earths outside of China, China’s supply monopoly still hovers at 95 percent – McGroarty likens China’s REE control to [...]

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