Rare Earth and Industrial Metals - Latest News Headlines

20-12-2011 - PwC survey says “Mineral, metal scarcity would deteriorate”

LONDON – Scarcity of metals and minerals will become more severe in the next five years, with the automotive, chemicals and energy industries likely to be hit hardest, according to a global survey of company executives by PricewaterhouseCoopers (PwC).
The survey of 69 executives across seven sectors, published on Wednesday, found that European companies were most concerned about a shortage, with 71% of respondents seeing scarcity as a risk, compared with 53% in Asia Pacific and 50% in the Americas.
“Put simply, many businesses now recognize that we are living beyond the planet’s means,” said Malcolm Preston, PwC’s global sustainability leader, in a statement.

Companies pinpointed growing demand for materials and political issues, such as China’s export restrictions on rare earth metals, as the main drivers of scarcity.
Those in the renewable energy, automotive, energy and utilities sectors said they currently faced supply instability, while
those in the aviation, high-tech and infrastructure sectors expected increasing disruption of supply by 2016.

The report suggested that some industries might use scarcity to their competitive advantage. Some 43% of respondents said scarcity offered an opportunity at present, while 59% said opportunities would increase in the next five years, with the automotive sector most positive.
“New business models will be fundamental to the ability to respond appropriately to the risks and opportunities posed by the scarcity of minerals and metals,” PwC’s Preston said.

Despite abundant material reserves in Asia, particularly in China, which produces about 97% of the world’s rare earth metals, Asian firms still expect substantial problems as explosive growth in emerging markets puts pressure on supplies.
PwC listed 14 materials as “critical”, including tantalum, which is used in computers and mobile telephones; fluorspar, found in cement, glass and iron; and lithium, used in wind turbines and batteries for hybrid cars.

Eighty-three percent of surveyed firms said their suppliers considered metal scarcity to be an important issue, but only 61% said they thought their customers were concerned about it.
In Europe, 96% of executives said their governments were aware of the problem, compared with 58% in Asia and 54% in the Americas.
Almost half of companies rated their preparedness for scarcity as ‘high’ to ‘very high’. The renewable energy sector had the highest percentage at 67% who were highly confident about their plans to combat a supply shortage, while just 33% of companies in the chemical and high-tech sectors rated their preparedness as “high” to “very high”.

13-12-2011 - Gallium nitride based devices set to bring substantial boost to power efficiency
13 December 2011

Gallium nitride has long been known to have useful properties when it comes to electronic components. Even so, its application has largely been confined to more exotic areas of the industry, particularly rf transistors.
But GaN is beginning to find application in what could be considered the mainstream, with some of its proponents suggesting its arrival could mark the beginning of the end for the traditional power mosfet.

One of the first companies to bring GaN technology to the embedded power market was International Rectifier (IR), which launched the GaNpowIR platform. But IR is not alone in exploring the application of GaN in the mainstream; a number of companies are now targeting the opportunities, including Efficient Power Conversion (EPC), whose chief executive Alex Lidow held the same role with IR.

Lidow, an unabashed GaN enthusiast, sees the technology offering a 'huge benefit' over silicon. But he realises that, to start the ball rolling, the industry needs to make a 'leap of faith'. "Since we launched EPC, we have won 350 customers," he said. "But we've also seen third parties – Texas Instruments, for example – introducing parts which work with our devices. There is always scepticism of new technology, but we are working with bigger companies as time goes on."

But why should designers consider using GaN based parts? "It's fundamentally superior to silicon," Lidow asserted. "This is because of two very important properties. Firstly, it's critical electric field is 10 times more than that of silicon; terminals can be closer together and this means smaller devices. Secondly, electron mobility is much better than in silicon because different physics is involved."

In silicon, said Lidow, electrons hop from crystal to crystal. "In GaN, electrons are confined in a 2d gas defined by quantum mechanics. There is one probability function which allows them to move easily along the surface at high velocity. When you put these two things together, GaN should be 10,000 times more efficient than silicon."

For the moment, GaN devices aren't showing that level of improvement; EPC's first generation parts showed a five to tenfold boost, according to Lidow. Why has the theory not translated into practice? "When power mosfets were introduced in 1978," Lidow pointed out, "they were 2.5 orders of magnitude away from their theoretical performance. It took time to work out how to squeeze the performance out. It's the same for GaN, but we'll get there."

One of the attractions of GaN, in Lidow's view, is that power mosfet technology is essentially mature. "Since the turn of the Millennium," he continued, "there have only been incremental, expensive improvements. Why use power mosfets when you can get at least five times better performance 'out of the box' with GaN?"

From his previous experience with power mosfets, Lidow says there are four barriers which stand in the way of the mainstream adoption of GaN technology: will it enable new applications?; is it easy to use?; is it cost effective?; and is it reliable? "As you begin to satisfy these questions," he said, "you gain more customers."

13-12-2011 - LG Leads Global Media Tablet Display Market
What do disparate media tablet devices like the Apple iPad, Amazon Kindle Fire, and the Barnes & Noble Nook have in common? They all depend on South Korea’s LG Display as the main supplier of their display panels—a coveted distinction that has made the company the world’s top supplier of media tablet screens, according IHS.

LG Display is the leader by a wide margin of the tablet display market, with a 51 percent share of global unit shipments in the second quarter of 2011. The company is well ahead of South Korean rival Samsung—which also supplies panels for the Apple iPad as well for its own Samsung Galaxy Tab—at a distant second with a 35 percent share. Third-place Chimei Innolux Corp. of Taiwan, another Apple supplier that also provides for the Chinese white-box market, controls a 9 percent share, as shown in the figure attached. The remaining 5 percent of the tablet display market is split among several smaller firms.

LG Display also enjoys a competitive advantage in terms of economy of scale, as it devotes more capacity than other manufacturers to making media tablet displays. Such generous capacity—as well as being Apple’s main supplier—has catapulted LG Display to a favorable position in the market.

Tablets reshape small/medium display business

From the time the iPad was introduced last year by Apple, tablet devices have becomeone of the main driving forces for growth in the market for small- and medium-sized displays, defined as screens smaller than 10 inches in the diagonal dimension.

Tablet shipments are expected to surge an astounding 273 percent this year compared to 2010. And at a time when sales of many consumer electronic items have stalled, media tablet shipments will maintain a robust compound annual growth rate of 45 percent from 2011 to 2015, showcasing the healthy prospects that lie ahead for the space.

Daunting specs

Companies hoping to enter the media tablet display space face a number of barriers. For one, displays hoping to merit consideration for inclusion in best-selling tablets must meet demanding specifications for size, pixel format, power consumption and response time.

The standard pixel format for 9.x-inch displays—the size category of the iPad, and the dominant dimension in the industry—is 1,024 by 768 at 132 pixels per inch.

Meanwhile, the standard pixel format for 7.x-inch displays—the size used by the new Kindle Fire and the Galaxy Tab—is at 1,024 by 600 at 170 pixels-per-inch. There is conjecture that Apple will implement its Retina display with resolutions of greater than 300 pixels per inch in the new iPad 3, which is expected to launch in 2012. If so, this will up the resolution trend in the media tablet PC space, challenging other tablet makers to follow suit.

Panel suppliers that cannot meet these exacting display standards or efficiently produce viable displays at such sizes and resolutions will find it very hard to compete in the market, IHS believes.

IPS competition

IPS LCD technology soon may encounter some stiff competition. Japan’s Sharp Corp. has introduced a new oxide material consisting of indium, gallium, and zinc called IGZO that supports high electron mobility—20 to 30 times faster than conventional amorphous silicon (a-Si) technology. Sharp plans to commercialize a TFT LCD using IGZO material by downsizing the transistor and increasing the light transmittance. This will make the display more power efficient and enable higher pixel densities.

IGZO production can be achieved on existing a-Si lines with little modification, making it cost competitive. Sharp plans to manufacture IGZO displays at its eighth-generation a-Si fab in Kameyama, Japan with production expected to start this year.

Another variant of the wide viewing angle technology very similar to IPS LCD is Fringe Field Sequential (FFS) LCD which continues to be used for tablet PC displays. The patent for FFS LCD resides with Taiwanese-based LCD supplier E Ink Corp. (Hydis). However, because of the lack of capacity at E Ink to manufacture larger-sized panels, E Ink licenses this technology to other LCD suppliers, including LG Display.

With the tablet wars ensuing in earnest, the technology that comes out ahead may well determine which display supplier shines brightest in the years to come.


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12-12-2011 - The Holy Grail of PV Solutions

Steven J. E. Pleging

Our future energy requirements depend on reaching the Holy Grail of electricity generation – a cost competitive alternative to coal and natural gas. Despite the environmental impact and waning supply of fossil fuels, the market continues to drive their widespread use as our overwhelming choice in generating more than 70% of our global electricity. The availability of an alternative energy source would also contribute significantly to energy self-sufficiency in North America.

Every hour more energy from the sun hits the earth than the world's entire population consumes in a single year. Given this abundance, solar energy is our world's most obvious energy choice. However, 2010 data indicated only 1% of our global electricity supply came from solar energy. The number is small, but the PV market has grown from a mere 1.75GW of installation in 2006 to an industry projection of 100GW in 2013 (EPIA Global Market Outlook for 2015). The continued reality of the imbalance between solar electric, coal and natural gas is pure economics.

In 2010, The National Academy of Sciences reported the real cost of using fossil fuels (pollution and greenhouse gas emissions) added another $120 billion to market cost, not to mention the long-term costs to our environment, some irreversible. However, in a market-driven economy, future impact is not the driving force, but rather the reality that the wholesale cost of electricity from natural gas and coal is substantially lower than solar energy today.

Primary Barriers
Despite the huge growth of solar photovoltaic (PV) installations in 2010 – with 129% growth, the global market reached16.6GW – the market continues to experience limitations involving either efficiency or expense. These limitations have prevented solar power from competing effectively with fossil fuels. Additionally, many of the cutting-edge thin-film technologies require rare elements that are a finite resource already in short supply. There simply is not enough material on the planet to make these devices for worldwide consumption.

"The biggest barrier to solar energy becoming the dominant source of electricity globally is expense," says Dr. Andras G. Pattantyus-Abraham, chief technology officer, Quantum Solar Power Corp. "The obvious lesson learned from the bankruptcy of Solyndra and Evergreen is the industry is focused on price. Currently, the most cost-competitive solutions are the thin-film PV technologies, CdTe and CIGS, but in the long term, given the short supply of indium and tellurium, an alternative solution will need to be developed within thin-film manufacturing in order to remain cost competitive."

In order for solar energy to meet current economic demands, it must solve three key issues that have previously limited its acceptance – efficiency, price, and the removal of rare elements used in production. Current solar PV technologies generate electrical power by converting solar radiation into an electric current using semiconductor layers made from either crystalline silicon or what is called a thin-film layer of exotic materials. Silicon PV technologies have been the standard approach since the 1950s, currently offering the highest efficiencies. Although silicon ingot prices have dropped in recent years, silicon PV remains more expensive than thin-film modules. While novel crossover approaches, such as amorphous silicon, have gained ground by applying silicon semiconductors at a thin-film level, the least expensive PV module is a cadmium telluride (CdTe) thin-film product. Despite thin-film's cost advantage and increasing efficiencies, it remains 3% to 7% less efficient than the leading silicon PV. The elephant in the thin-film room is, however, materials.

Strangling Solars Reach
The leading thin-film products primarily use rare elements to create their semiconductor layers at a very small scale (1µm to 8µm). Elements such as gallium arsenide, tellurium, and indium, have limited global supplies that are controlled by only a few countries. In the case of tellurium, used in the leading thin-film First Solar (CdTe), there is only two known high concentration deposits – located in China and Mexico. Tellurium is the second scarcest byproduct metal, next to gold, and is mainly a byproduct of copper ore production. With consumption steadily climbing, and only a little over 125MT being produced annually, tellurium prices have more than doubled since 2007. In fact, looking at First Solar's projections for reducing their $/watt manufacturing costs, materials are not mentioned as an area in which they see potential reductions. If thin-film is to emerge as a viable alternative, and is indeed the Holy Grail photovoltaic solution, it must overcome this rare element restriction.

In the fall of 2008, 4D LABS and a team of scientists began work at Simon Fraser University (SFU), a Canadian public research university in British Columbia, Canada.
Lastly, with China now a major producer of crystalline silicon PV, it is likely they will more strictly control exports of tellurium in the future as they move into thin-film markets. Hanergy, a Chinese solar PV company recently announced a $626 million investment in new 1.5GW thin-film production, research, and development facilities. Other Chinese manufacturers have hinted at moving in the direction of thin-film as well, and some already are. Seven out of the top 10 solar PV manufacturers are currently Chinese companies. The estimated 2011 production capacity of the top 10 manufacturers is more than 19GW. The Chinese represent 13GW of this amount. Therefore, as these companies begin to move in the direction of thin-film production, the issue of rare element supply becomes more serious.

Comparing Technologies
Quantum Solar Power Corp. is developing a solar PV device that will address all three critical success factors – high efficiency, low cost, and high scalability, with an abundance of non-toxic materials. Our approach focuses on eliminating the costly and sometimes exotic semiconductor absorbers used in the vast majority of PV. Utilizing widely available materials, the Quantum device aims at cutting thin-film material costs in half. If material costs represent 45% or more of PV manufacturing, a 50% reduction would be a monumental step toward solar becoming the obvious economic choice.

Leading silicon efficiencies in the industry are currently at 20% to 22% power conversion efficiency (PCE) for crystalline silicon PV and 15% to 17% for thin-film. Quantum engineer modeling demonstrates a potential to achieve efficiencies PCEs of more than 20%, thereby fulfilling another of the critical competitive factors related to the PV industry. Although cost is driving the PV market currently, long-term success is dependent on maintaining high levels of efficiency in order to maximize electrical capacity.

Quantum engineers evaluated the leading solar technologies and determined the limitations on solar were related to the methods used for absorbing energy. The device currently in development is expressly focused on this component of solar PV, with the goal of delivering a PV device that matches or exceeds the highest efficiencies currently available, while fitting into a thin-film manufacturing model that eliminates rare elements, and in turn, drastically cutting module costs.

Game-Changing Technology
In the fall of 2008, Dr. Gary Leach, lead scientist, Quantum, and director, Photonic Systems, 4D LABS, and a team of scientists began work at Simon Fraser University (SFU), a Canadian public research university in British Columbia. SFU was identified early on in the formation of Quantum Solar Power as a key resource, given their newly built, state-of-the-art research and fabrication facilities. 4D Labs opened in 2007 as a cutting-edge facility for optics and nanoscience research, and has edge tools and a 4,000ft2 cleanroom.

After a careful analysis of the limitations to PV technologies at that time, in concert with novel ideas of their own, the team hypothesized a completely new approach to solar cell design. In October 2008, they embarked on a proof of concept design for a new device. By March 2009, it became apparent to Leach and his team that their proof of concept was indeed viable. Dr. Andras G. Pattantyus-Abraham met Leach at a nanotechnology presentation at SFU in the summer of 2009. Pattantyus-Abraham was engaged in semiconductor nanoparticle research at the Sargent Group at the University of Toronto at the time. Convinced that Quantum's approach promised a true Holy Grail solution, he joined Quantum in late 2009 as CTO.

Since early 2010, Quantum's lab in Burnaby, British Columbia, Canada, with its team of 14 leading experts in nanotechnology, physical chemistry, optics, and physics, has been fine-tuning a prototype PV device. In June 2011, Quantum researchers entered their second phase of research, ramping up the device's output results. Future research and development will focus on key partnerships in research and manufacturing, as well as National Renewable Energy Lab (NREL) certification.

Solar Power's Role
It is important for our geopolitical future that we create a clean energy economy along with a strong energy policy. A sunny future for our children demands that we continue to create green sector jobs, replacing our dependency on fossil fuels with renewable energy through wind turbines, hydro-electric power, and solar PV technologies that make solar energy a globally-deployable, environmentally-smart energy source.

If the barriers to cost, efficiency, and scalability can be met with technology as promising as the developments at Quantum Solar, the solar industry could shift dramatically from making a marginal contribution on our energy supply to becoming the dominant force in coming years.

Any solar cell technology that can achieve matching or superior efficiencies to leading technologies, at a lower cost while remaining free of rare materials, is unquestionably a disruptive technology, and will significantly contribute to making solar PV the dominant electricity resource for our planet.

09-12-2011 - Silver is an amazing metal
Buy Silver…Now!

Published December 9, 2011 | By Swiss Metal Assets

Precious Metal - Silver
Silver is an amazing metal…which is why it’s likely to soar over the coming years…

You see, silver has more than 10,000 uses. It’s one of the world’s best conductors of heat and electricity. Inventors filed more patents on silver uses than any other precious metal in the world. And when silver is used for most industrial and technological purposes, it is used up forever… It simply costs too much to try to recycle the tiny bit of silver from every cell phone or casino chip.

I’m not saying industry is going to use up all the world’s silver. That simply can’t happen. But scarcity is a real issue.

Our rapid consumption of silver leaves very little to meet any uptick in demand from investors. A spike in interest will send prices spiraling higher…

Here’s a breakdown of the silver market. The table below shows the percentage of the total amount of silver consumed by each category over the past four years…

As you can see from the table above, only 12% of the silver supplied to the market made it to bullion in 2010. That means only a little more than 100 million ounces of silver became bullion for the entire investing world.

That’s a tiny fraction to sop up all the investment interest in the world.

Of that silver, about 43 million ounces went to exchange-traded funds like the iShares Silver Trust (SLV) and the Sprott Physical Silver Trust (PSLV).

That means you could buy all the extra silver bullion for about $2 billion. We could buy all the surplus silver bullion from the last four years for about $10 billion.

That’s the same as the market value of the iShares Silver Trust today. If you wanted to build another silver fund, you couldn’t. There just isn’t enough silver bullion out there to fill the order.

Even trying to amass that much physical silver would send the silver price soaring. It’s a simple market fact… When there is more demand than supply, it drives the price up.

And the economic problems confronting Europe and the United States have increased interest in precious metals… Silver gained a colossal 174% from August 2010 to April 2011.

In May 2011, however, the price collapsed 31% in just four weeks. The bull market simply ran up too far, too fast… and the decline wiped out many highly leveraged silver traders.

The big money is tiptoeing back into silver.

Last month, commodity trading advisors, pool operators, and hedge funds — the “big money” — weren’t interested in silver AT ALL…

But as they move back into the market, silver prices could soar. Let me show you what I’m talking about…

Jason Goepfert created SentimenTrader, a service that tracks investor sentiment toward various asset classes. According to Jason, silver just bounced off its most pessimistic reading in four years.

The so-called “commitment of non-commercial traders” hit 10,352. That’s incredibly low. The last time sentiment numbers were that low was in August 2007. Six months later, the price of silver was 59% higher. It rose from $12 per ounce to $19 per ounce.

I went all the way back to 2002 and found that silver sentiment bottomed near 10,000 six times… On average, the price of silver rose 33% in the next six months and 54% over the next year. This chart shows the last four times it bottomed…

Here’s how the silver price performed after each of the last four times silver sentiment bottomed out…

The best return came after Bottom No. 2, which coincided with the US banking/credit crisis. Silver soared an eye-popping 405%, including its parabolic rise in 2010.

As those numbers indicate, silver is one of the most volatile assets in the world. Over the last year, silver has seen massive price swings, including an 81% rally and two 30% drops. That forced many traders to liquidate their silver holdings in order to meet emergency short-term requirements. (Plus, the debacle at commodity broker MF Global has scared many folks out of the market.)

But the long-term drivers of gold and silver’s uptrends are still in place. Enormous and growing Asian economies like China and India are getting richer…and they have deep cultural affinities for precious metals. Plus, the Western world has lived way beyond its means for a long time…the debts and liabilities it has taken on can only be paid back with devalued, debased money. This is bullish for “real money” assets like gold and silver.

With sentiment so negative toward silver (and just beginning to turn back up), it’s a great time to take a position in this long-term bull market.

If gold and silver prices are nearly certain to rise over the next few years (and probably rise dramatically), the simplest way to play that trend is to buy bullion…real, hold-in-your-hand silver coins.

And I recommend everyone do just that… Buy some silver and store it away.


Matt Badiali ,
for The Daily Reckoning

Buy Silver…Now! originally appeared in the Daily Reckoning. The Daily Reckoning provides over 400,000 readers economic news, market analysis, and contrarian investment ideas.

09-12-2011 - Lithium, Cobalt Among Minerals Facing Chronic Shortage
Published December 9, 2011 | By Swiss Metal Assets

Cobalt a Rare Industrial Metal
Dec. 7 (Bloomberg) — Global manufacturers may face a critical shortage of 14 raw materials over the next five years affecting industries including chemicals, aviation and renewable energy, according to PricewaterhouseCoopers LLP.

Seven manufacturing industries may be seriously affected by a critical shortage of raw materials “which could disrupt entire supply chains and economies,” PwC said in a report today based on a survey of senior executives from 69 manufacturers.

“Many businesses now recognize that we are living beyond the planet’s means,” Malcolm Preston, PwC’s global sustainability leader, said in the report. “New business models will be fundamental to the ability to respond appropriately to the risks and opportunities posed by the scarcity of minerals and metals.”

Beryllium, used as a lightweight component in military equipment, cobalt, used in industrial manufacturing and lithium, used in wind turbines and hybrid cars, were among minerals identified in the report as facing critical shortages. Tantalum and flurospar will also face a shortfall, it said.

By: Jesse Riseborough

06-12-2011 - iPhone 5 to Possibly Have Sharp IGZO 4¨ Display
Rumors are swirling around the net about what Apple is going to do about the new display for its iPHone 5. We know that it is going to be an IGZO (Indium, Gallium, Zinc , Oxygen) display. We also know that it will be 4 inches. What I do not know for sure is the manufacturer of the display. Some speculate Sony and Hitachi others say Sharp. From what I have been following it looks like it will be Sharp. Whoever makes the display the faithful are bound to be thrilled. These panels are also bound to be used in the next Apple iPad
According to Shuji Sako of Sharp, ¨The IGZO LCD panel´s performance outclasses anything attainable with conventional amorphous-silicon TFT panels.¨ IGZO transistors have mobility of its electrons up to 40 times higher than amorphous-silicon thin-film transistors. The IGZO transistors can also be made smaller and have the same performance. This helps the display save 30% in energy consumption and higher resolution over the traditional amorphous-silicon TFT panels. The display is said to perform at 330 dpi. The IGZO display would also enable the iPhone 5 to be thinner.
The demand for small and mid-size LCD panels is growing rapidly putting strains on the supply chain. All you have to do is go to any electronics outlet and see the many LCD products available. What many tech blogs fail to say is that this amazing growth also puts strains on the natural resource supply chains. The technology needs Indium, Gallium and Zinc. Two of these metals have been deemed to be at Critical Levels according to the British Geological Survey and the US Geological Survey. Over 95% of these rare industrial or technical metals are supplied by China. Even if the prices of the metals go up 100% the end user will see a very small price increase because such a small amount of the metals are used in each device.

06-12-2011 - Gallium Helping Us Stay Connected
The element so instrumental in the success of CIGS or Copper Indium Gallium Selenide solar panels garners little respect. If you do some research on Gallium you will see very few articles on this element. What you see is people talking about how to make melting spoons, and talk of the metal melting in your hand due to its low melting point of 85° F or 29.8° C. Here we are going to go over the history of Gallium and its uses in technology today.
Gallium has the symbol of Ga and the atomic number 31 on the periodic table of the elements. In 1875 Paul Emile Lecoq de Boisbaudran discovered Gallium spectroscopically. He saw Gallium´s characteristic two violet lines. Gallium does not occur free in nature. Lecoq was able to obtain the free element using electrolysis.
Gallium is found in bauxite, sphalerite and coal. It is primarily extracted from Aluminum and Zinc production. The exact amounts mined and recycled are very difficult to quantify. According to the United States Geological Survey the total amount mined in 2010 was approximately 106 t and the total recycled was approximately 78 t. Gallium supply is highly reliant on other Aluminum and Zinc mining for its supply, when the prices of the base metals fall the amount of Gallium available will be highly affected. Similar to other rare industrial metals, mining companies will not invest in the production of these metals because the markets are so small.
The uses of Gallium are found all around you. Semiconductors, LED´s, medicine, electronic components, CIGS solar and new tech like IGZO (Indium, Gallium, Zinc and Oxygen) LCD screens. The new iPhone 5 will have this kind of LCD. Over 90% is used in electronic components in the form GaAs (Gallium Arsenide). Recently CIGS solar panels reached an unprecedented 20.3% efficiency once again proving that CIGS is the most efficient form of solar on the market. The technology that will greatly increase the use of Gallium is smartphones. Analysts predict that smartphone use will grow at a rate of 15-25% over the next several years. Recently LED´s backlit screen TV´s and computer monitors have been all the rage. The LED screen market will continue to grow, further putting strain on the small Gallium supply.
The top producers of Gallium are China, Kazakhstan and Germany. Once again China has a strong position in the production of a rare industrial metal. The difference with Gallium is that almost 40% of the metal produced every year is coming from recycling.
With all of the new technologies coming along using Gallium what will the market for this metal look like in a few years? Unlike some metals like Silver and Gold, Gallium is not traded on the LME (London Metal Exchange). This makes the price of Gallium very stable. Rare industrial or technical metals are small markets with big possibilities. So if you are looking for an investment that is rarely talked about, Gallium could be a good option.

18-11-2011 - China Now Controls the Solar Industry
Recently American solar companies like Solyndra, Evergreen Solar and Spectrawatt filed for bankruptcy. All of these events may lead investors to believe that Solar is finished.

The US solar industry was hit hard by announcements out of Europe that some nations like Italy were scaling back their expenditures on solar due to their debt crisis. At the same time we have nations like India announcing a US $19 billion plan to produce 20GW of solar power by the year 2020.

Where will the solar panels for this market be manufactured?

India does not have sufficient rare industrial metal inventories or rare earth metal production to meet the demands of the government plan.

China has positioned itself as the country with 97% control over the majority of rare industrial metals and rare earth metals needed to produce high efficiency solar panels.

What does this mean for companies producing solar panels?

Among many other reasons for restricting exports of rare metals, China wants companies to produce the products in China to keep its workforce employed. If companies want to import metals from China to produce the panels in other nations they will have to pay much higher prices for the metals due to taxes, shipping, export costs and other import costs. Accordingly, the US manufacturers will have a difficult time competing with the manufacturers in China.

The other issue that the companies do not want to talk about is government subsidies and tax breaks. Jason Burack the co-author of the, ¨Dragon Metals Report¨, and owner of recently said, ¨Message to all CEOs in solar, "Switch immediately to the best Solar panel technology using materials like rare earths, rare industrial metals and graphene and stop relying on the government for subsidies to produce inferior technology panels the market does not want, also a successful long term business model for any company should not be to rely on getting all of your revenue and contracts from the government, which is what many solar companies have done¨.

There are three, ¨Thin-Film PV¨ kinds of solar panels.

1. CdTe or Cadmium Telluride with an efficiency of 6%-11%.
2. a-Si or Amorphous Silicon with an efficiency of 6%-12%
3. CIGS or Copper Indium Gallium Selenide with an efficiency of 10%-20%

CIGS Advantages:

A. Highest energy yield
B. No environmentally hazardous materials
C. You can mold the panels to fit many applications
D. They can possibly bring the cost of panels down to below $1 per watt.

Recently, ¨Rare Earth Solar¨ announced an agreement with, ¨NUtech Ventures¨ to produce solar panels that will use rare earth elements in solar panels instead of the more expensive metals that we are used to seeing in solar panels. Rare earth elements are cheaper but I wonder what the numbers are that they are using to calculate their costs. China has severely cut production of rare earths to keep the costs artificially elevated. I would like to remind people that the rare industrial elements indium, tellurium, cadmium and gallium are not rare earth metals.

The other technology on the horizon is graphene composite solar panels. They are made of copper, molybdenum and graphite. Molybdenum and graphite have both been deemed highly critical to national security for many nations. Once again China has a powerful position because they control over 80% of the graphite market. According to the New York Times, ¨It is not only the thinnest material in the world, but also the strongest: a sheet of it stretched over a coffee cup could support the weight of a truck bearing down on a pencil point¨. So once again China has the foresight to see the technologies on the horizon and has positioned itself to prosper.

Currently 89% of the total installed solar panels worldwide are located in Germany, Japan and the USA. In the coming years we will see a growing demand from China for its own solar needs. Between China and India the demand for solar panels will far exceed our current ability to produce the panels. The costs of solar are coming down and the closer we are to grid parity, the more use of solar we will see. Since many of the metals used to produce these panels have been deemed critical to many nations national security, the prices of these metals are bound to stay elevated. China has shown that it will continue to restrict the exports of the rare industrial and rare earth metals further tightening the supply chains.

By Randy Hilarski
Your Rare Metals Guy

08-11-2011 - Silver Set To Reach New Highs
by Michael Filighera

So what is the story with silver – did the bubble burst? Is it headed for $50 an ounce or more? What about the gold/silver ratio: Is it headed towards new lows or new highs and what does it really mean? What is the real supply and demand picture for silver?

Silver remains a precious metal despite years of being the "bastard stepchild" to gold. An attempt to corner the silver market drove prices to historical highs in 1980 and more recently towards $50 an ounce based on several proven and unproven factors including short covering of a reportable massive JP Morgan (JPM) short position inherited from the takeover of Bear Stearns, global economic concerns resulting from sovereign debt defaults to currency devaluations to political unrest.

Technically, I have a strong case that silver has been tracing a corrective pattern off of the 2011 highs which may be complete with the larger bull market advance in full force again. Fundamentally, the same story presents itself over and over again – silver is set to advance reaching new highs that will surprise and astound many.


Historically, silver has been an indispensable metal for over 5000 years. Evidence can be found in Anatolia (modern day Turkey) of the first major source of mined silver dates which back to 4000 BC and served craftsman throughout Asia Minor, the Near East, Crete and Greece. More sophisticated processing of silver was developed in about 2500 BC in what is now Armenia.

Fast forward eighteen hundred years to the Greek civilization where historical writings and physical evidence suggest the Laurium mines near Athens were producing about 1 million troy ounces a year. In fact, through the 1st century AD, the Laurium mines were the largest individual source of world silver production.

After the Greek domination in mining silver spread to Spain, the Punic Wars brought in Roman rule and the expansion of exploiting Spanish silver extended to other areas of Europe. Spanish mines provided for the domestic silver needs of the Roman Empire. Historical records though, suggest the actual production levels did not rise significantly even though mine production in Spain dominated the first 1000 years AD. Expansion in production took place in the 500 year period from 1000 – 1500 AD as mining locations increased and mining technology began to improve.

During the next 375 years silver mining and production was dominated by the Spanish as colonies were established in South America (Bolivia and Peru) and in Mexico. Eighty five percent of world production was attributable to Bolivia, Peru and Mexico. After 1850 production increased substantially as the United States and several other countries began mining and world production jumped from around 40 to 80 million troy ounces a year by the 1870’s.

The 20th Century ushered in an explosion of technologies that enabled world production to jump again to about 190 million troy ounces a year. Major mines were established in the United States, Canada, Australia, Central America and Europe. Technology introduced steam-assisted drilling, mining, mine dewatering, and improved haulage enhancing the ability to handle ore and increasing the exploitation of ores that contained silver.

As the 20th century progressed improvements in electrorefining techniques ushered in easier separation of silver from other base metals which increased the sources of silver. Ultimately the increase in output of silver-bearing residue led to refined silver production.


The demand for silver can be broken down into three main areas: Traditional, Industrial, and New Technologies.

Silver Jewelry
New Technologies
Medical Applications
Solar Energy
Water Purification
The latest annual figures reveal that in 2010 over 487 million ounces of silver were used for industrial applications, 167 million ounces were used by the jewelry market, over 50 million ounces producing silverware and over 10 million ounces in minting coins and producing medals.

Industry continues to rely on silver's unique properties such as its strength, malleability and ductility. As well as its electrical and thermal conductivity, its high reflectance of light and the ability to handle extreme temperature ranges.


Under the direction and guidance of Alexander Hamilton as Secretary of the Treasury the U.S. Government set the first formal gold/silver ratio under the “American Act for Establishing a Mint” in 1792 at 15 ounces of silver for every one ounce of gold or 15:1 The act was put in place to facilitate at what ratio they would coin gold and silver. Based on the relative value that was present in Europe the gold/silver ratio was used to reflect the commercial value of each metal. While this may have been the case in Europe it did not extend further east where in India, parts of Africa and East Asia the gold/silver ratios were reported as low as 1:1.

Beginning in the 19th century gold increased in popularity in Europe and the U.S. as a more stable monetary asset. By the end of the 19th century the demonetization of silver was well underway and picked up speed in the 20th century as most countries discontinued their silver from currency circulation and began dumping their silver stockpiles driving the monetary demand even further into the abyss.

The early 20th century saw the gold/silver ratio drop to 100 ounces of silver to one ounce of gold. It should be noted that at that time the mine production of silver was not 100 times that of gold nor was the abundance of silver money 100 times that of gold. The prejudice of governments and mints during this time predicated or perhaps manipulated the gold/silver ratio from 15:1 to 35:1 and as high as 100:1 as government dumping of silver took place. Records indicate that between 1965 and 2000 government(s) sold 3 billion ounces of silver versus 150 million ounces of gold. Currently, it is reported that governments hold only 60 million ounces of silver versus 1 billion ounces of gold. It would appear that silver is now more rare than gold.


Today, the gold/silver ratio is still used by many to determine which metal is undervalued or overvalued, which in essence doesn’t make sense since the gold standard as a monetary system was abandoned and replaced by fiat currency systems around the globe. There are additional ratios between the precious metals such as:

Approximately nine times as much silver as gold is pulled from the earth each year. The majority of this silver is used by industry.

According to the United States Geological Service (USGS) the general belief amongst mining companies is that there is only about six times as much silver in the ground that is mineable, although there are published reports claiming there is 15 or 20 times more silver in the earth, (this ratio is the natural occurrence ratio and not the reserve base ratio.)

Over the past 10 years, approximately 40 times more silver was NOT earmarked for coins and bullion and this is what the price ratio of gold to silver tends to reflect.
9:1 is the silver to gold annual mine production ratio
6:1 is the USGS estimated gold to silver in the ground ratio
1:1 is the year to date investment dollar demand ratio
1:3 (more silver than gold) is the physical ratio of gold and silver coins/bullion

Supply and Demand

Undoubtedly supply and demand for any product will ultimately rule its price. That said the demand side for silver over the past year or so propelled prices to astounding levels. Investor interest and fabrication demand spurred by the industrial segment recovery easily offset the increase in supply.

Total silver supply rose by 15% in 2010 primarily on the return of producer hedging (61 million ounces), government sales (net sales increased with Russia being a major seller) and recycling where the decline in photographic scrap was balanced by a strong rise in industrial, silverware, and jewelry recycling. Mine production saw a very modest expansion of 2.5%.

Demand for silver was robust in 2010 as well. Industrial demand rebounded 21% and was the largest contributor to the 13% increase (879 million ounces) in fabrication (see inset for detail), which includes jewelry and coinage. Together the net increases in demand offset the continued losses in photography and silverware.

Net investment jumped by 47% to an all-time high of 178 million ounces (most of which took place within the last four months of 2010.) ETFs and physical bars ruled last year with the Comex seeing less of a commanding role via silver futures.

Pent up demand remains in the market as investors seek out “safe havens” when quantitative easing in the United States remains in the near term picture and European sovereign debt problems remain unresolved. The economic outlook thus far continues to support silver’s safe haven status as monetary policies are unlikely to be significantly tightened anytime soon and the sovereign debt crisis grows.

Silver’s Fabrication Uses

Industry: Silver is the best electrical and thermal conductor of all metals and so is used in many electrical applications. The most significant uses of silver in electronics are in the preparation of thick-film pastes, in multi layer ceramic capacitors, membrane switches, and silvered film in electrically heated auto windshields. Silver is used in the fabrication of photo voltaic cells, coating material for compact discs and DVDs, mirrors, and batteries. Jewelry and Silverware: Silver possesses working qualities similar to gold, enjoys greater reflectivity and can achieve the most brilliant polish of any metal. Photography: the age of digital photography has diminished silver’s usefulness within this sector. Radiography, graphic arts and consumer photography though continue to use film manufactured with a very high purity silver. Coins: Historically, silver was more widely used in coinage than gold, being in greater supply and of less value, thus being practical for everyday payments. During the latter 19th century silver was phased out in favor of gold. Investors though remain buyers of coin and bullion especially in the U.S., Australia, Canada, Mexico and Austria. Source: GFMS Ltd. World Silver Survey 2011

Silver (Physical)

After a stellar rally to nearly $50 ounce silver put in a needed correction. The correction itself consisted of two steep and at times precipitous declines separated by a three month upward biased sideways move. The correction did fit the profile and it appears that off of the 26.15 (September intraday low) silver has resumed the larger advance. However, without strong upward momentum it leaves open the possibility for an additional down leg taking place before prices head higher on a more sustained basis.

Technically, the long term charts continue to support and suggest additional downside remains in the picture for now. The stochastic oscillator is pointing lower and is currently in neutral territory. The MACD is beginning to register oversold and the MFI oscillator continues to show money is stronger on the buy side rather than sell side.


Silver may indeed still be in a correction with an additional down leg on its way, but the longer term picture continues to favor the trend remaining up. Due diligence remains important for each investor to perform in accessing whether silver is appropriate in diversifying portfolios. Should additional price weakness drop prices below $30 (basis silver futures or SLV) a long term buying opportunity would exist. Silver mining stocks are an additional way to add silver to one’s portfolio. Here again due diligence is recommended in choosing which company is appropriate.

Both gold and silver remain important investment choices in protecting against the ongoing global economic calamity. Long term planning and portfolio diversifying should include the addition of both.

Again, I am drawn to quote an old Mercedes advertisement where the announcer states

“Perception is not always reality.”

This quote continues to rule the day as speculators flood in and out of the markets taking their turns at controlling the price, albeit short term, since there is much more paper silver than physical metal to cover the commitments. The price of silver has dropped (within the context of a correction) as the fundamental picture favors higher prices. It can then be said that misconceptions weigh heavily as traders (speculators) move in and out of positions.

The remainder of this article concerning charts for mining stocks and SLV can be found at

05-11-2011 - Cobalt Technology Cuts Electric Consumption by Computers
By Karan Kumar
Wed, Nov 2, 2011

A researcher at Kyoto University has developed a way to save electricity by using cobalt, and his work is already drawing interest from companies which make magnetic devices used in a variety of applications, such as hard disks, computers and speakers.
Daichi Chiba, an assistant professor, told Cobalt Investing News that in his research, conducted with other experts, he covered a 0.4-nanometer-thick layer of cobalt with an insulating film and applied 10-volt electricity to it to record changes in its magnetic poles. He found that the cobalt completely lost its magnetism when minus voltage was applied.

He explained that electric current is passed through magnets in hard disks so that they can register and process data. Using cobalt – an iron group element with magnetic properties like iron and nickel – to create a technology that can basically turn computer memory devices on and off without virtually any electrical power is “significant,” he said.

“In conventional magnetic devices, such as an electromagnet, we have to apply electric current to it to generate magnetic force,” he said, adding that this makes the device hot as it consumes “consumes wasteful energy as thermal energy. In our device, we don’t need to apply electric current. Only voltage is applied between a gate electrode and the cobalt layer. There is an insulator layer between them, so almost no electric current flows.”
According to Energy Star, an initiative of the US Environmental Protection Agency and the US Department of Energy, if every home office product purchased in the United States this year met its requirements, the country could save $100 million in energy costs and more than 900 million kilowatt hours of electricity. The amount of energy saved would prevent 1.4 billion pounds of greenhouse gases – equivalent to emissions from 125,000 cars – from being emitted into the atmosphere.
Chiba said using cobalt allows the structure of a magnetic device to be similar to that of a capacitor. “Current flows only when electric charge is discharged and charged, but this is negligibly small. Thus, we can electrically switch on and off magnetic force generated from cobalt without applying electric current at room temperature. When information is written, we have to apply electric current to generate magnetic field and to switch the magnetization direction of an element. Our technology may open up an entirely new route to realize electrical writing method without using electric current.”

Chiba, whose findings were published in British science journal “Nature Materials” in early October, worked with three other researchers from Kyoto University and two from NEC Corp., a Japanese multinational which operates in the IT and network solutions and electronic devices sectors.
The findings of this study could help companies, such as NEC, which develop hard disks, random access memory, semiconductor memory, and other magnetic devices such as speakers and electric transformers, create devices which could help consumers save money through reduced power usage.

Asked whether any investors or companies have shown any interest in acquiring this technology, he said: “No, not yet. But we are collaborating with NEC. Several persons from company called me, but just asked some questions about the mechanism of our result.”

31-10-2011 - Chromium, are Nations Hoarding Natural Resources
Published October 28, 2011
By: Randy Hilarski – The Rare Metals Guy

Chromium is a topic that you rarely hear about, but in today´s environment of uncertainty and the, ¨Great Worldwide Resource Grab¨, chromium gets more attention. Recently we have the EU and USA going into Libya (oil, lithium), Iraq (oil), Afghanistan (oil pipeline, rare earths), West Africa (cobalt, tungsten, oil, gold, timber and many more). Let us not forget China and the contracts that they are signing all over the world for their natural resource needs. This all makes for some very interesting times for nations and investors alike. Rare industrial metals are no different. Chromium has been in the news so it is time to explain its uses and background.

Chromium was discovered by Louis Vauqelin in 1797. Chromium is a blue-white metal with great corrosion resistance. It has the symbol Cr with an atomic number of 24. Chromium can be polished to form a very shiny surface and is used to plate other metals to form a protective layer.

The main use of chromium is in the production of steel where it is used as a hardener, corrosion resister and helps fight decolorization. Iron and chromium form Stainless Steel which is strong and has a high resistance to heat and decomposition. The two form one of the most versatile and durable metals known in the world. Stainless steel contains approximately 10% chromium. Chromium is also used in paints, coloring in glass, and as a plating agent.

According to the USGS the top producers are South Africa, Kazakhstan and India. South Africa produces almost 50% of all chrome ore. The three countries account for 80% of all chrome ore mined. Approximately 95% of all known reserves are located in Kazakhstan and the southern tip of Africa to include Zimbabwe and South Africa.

The background of chromium is interesting, but today we have a hot topic. India is thinking about a ban on exportation of chrome ore. This is after news out of South Africa that the, ¨National Union of Mineworkers¨, called for restrictions of chrome ore exports to China. It has been speculated that China has been stockpiling chrome ore in order to control future prices. Does this sound familiar? We currently have to deal with the manipulation of the rare earths and rare industrial metals by China. As of October 2011 India and South Africa have not followed through with the plans. The next few weeks and months will be quite interesting, we are seeing an increase in the need for chromium, with a possible decrease in available supply.

Today our world is full of uncertainty. Every day brings us news of something amazing. Governments are under pressure, people are suffering, companies are folding, wonderful inventions, worldwide internet connectivity, and resources are becoming scarce. I have learned that in times like this you can either complain or build a grand future. Many fortunes were made during the US Great Depression. We are living through a worldwide recession, when we come out on the other side natural resources will be needed like never before. Where are you putting your money and future?

31-10-2011 - Chromium, are Nations Hoarding Natural Resources?
Published October 28, 2011

Chromium is a topic that you rarely hear about, but in today´s environment of uncertainty and the, ¨Great Worldwide Resource Grab¨, chromium gets more attention. Recently we have the EU and USA going into Libya (oil, lithium), Iraq (oil), Afghanistan (oil pipeline, rare earths), West Africa (cobalt, tungsten, oil, gold, timber and many more). Let us not forget China and the contracts that they are signing all over the world for their natural resource needs. This all makes for some very interesting times for nations and investors alike. Rare industrial metals are no different. Chromium has been in the news so it is time to explain its uses and background.

Chromium was discovered by Louis Vauqelin in 1797. Chromium is a blue-white metal with great corrosion resistance. It has the symbol Cr with an atomic number of 24. Chromium can be polished to form a very shiny surface and is used to plate other metals to form a protective layer.

The main use of chromium is in the production of steel where it is used as a hardener, corrosion resister and helps fight decolorization. Iron and chromium form Stainless Steel which is strong and has a high resistance to heat and decomposition. The two form one of the most versatile and durable metals known in the world. Stainless steel contains approximately 10% chromium. Chromium is also used in paints, coloring in glass, and as a plating agent.

According to the USGS the top producers are South Africa, Kazakhstan and India. South Africa produces almost 50% of all chrome ore. The three countries account for 80% of all chrome ore mined. Approximately 95% of all known reserves are located in Kazakhstan and the southern tip of Africa to include Zimbabwe and South Africa.

The background of chromium is interesting, but today we have a hot topic. India is thinking about a ban on exportation of chrome ore. This is after news out of South Africa that the, ¨National Union of Mineworkers¨, called for restrictions of chrome ore exports to China. It has been speculated that China has been stockpiling chrome ore in order to control future prices. Does this sound familiar? We currently have to deal with the manipulation of the rare earths and rare industrial metals by China. As of October 2011 India and South Africa have not followed through with the plans. The next few weeks and months will be quite interesting, we are seeing an increase in the need for chromium, with a possible decrease in available supply.

Today our world is full of uncertainty. Every day brings us news of something amazing. Governments are under pressure, people are suffering, companies are folding, wonderful inventions, worldwide internet connectivity, and resources are becoming scarce. I have learned that in times like this you can either complain or build a grand future. Many fortunes were made during the US Great Depression. We are living through a worldwide recession, when we come out on the other side natural resources will be needed like never before. Where are you putting your money and future?

By: Randy Hilarski – The Rare Metals Guy

31-10-2011 - Zirconium and tantalum under the spotlight
By: Kelvin Kemm
28th October 2011

I was a guest speaker at an international conference on the zirconium-tantalum family of metals. The conference, ZrTa 2011, took place at a beautiful venue in Magaliesburg, about 100 km from Pretoria. There were also speakers from countries such as Canada, France, Japan and the UK. The crowd at the conference exhibited a great spirit of enthusiasm, and they ranged in age from the seniors to young graduates entering the field.

This family of metals is important in a number of high-tech applications, including the nuclear field. I am trained not only in the nuclear field, but also in materials science and metallurgy.

Even though I know the science of metal alloys, it is still amazing to me how small additions of one metal to another can change the resulting properties so dramatically.

Most members of the public probably do not realise this dynamic in the high-tech alloys business. Most people still retain the old image that you make an alloy by throwing in a bucket of this and a bucket of that and then cook and stir it all up together. Modern high-tech alloy making is much more like bricklaying with atoms.

One can imagine a metal internal structure at the atomic level being like a bucket full of tennis balls. If you want to make the metal perform differently, you can add golf balls. The golf balls then fall into the spaces between the tennis balls. To go further, one could add marbles; they fall in between the golf balls and the tennis balls.

In the metal atomic lattice, these spaces between the atoms are known as inter- stitial sites, and different metals have different size atoms, which, just as in my golf ball analogy, fit in between the other larger atoms.

This is a reasonably simple explanation; it gets much more complicated than that. The people at ZrTa 2011 were not only inter- ested in making alloys – they also wanted to do high- precision metal coating, and they wanted to know what happens in situations of poten- tial corrosion. The list goes on. This business, really, is bricklaying with atoms. These folks have to figure out which atoms to place where so that the result provides characteristics that some industrial operator wants.

Dr Hiroaki Muto, of Japan, even reported that some corrosion-resistance properties showed improvement when subjected to nuclear radiation. So the nuclear radiation energy seems to be doing something to the atoms that results in improved performance. Very interesting.

Dr Zeb Vilakazi had already pointed out that the science of metalworking has been at the forefront of mankind’s development since the Bronze Age and the Iron Age. Now we are in the age of looking at the atom arrangements of exotic metals like zirconium, niobium and tantalum. Tantalum is used to grow single-crystal metal turbine blades, which are used in the jet engines of large passenger aircraft. So, when you fly in an aeroplane, look out at the engine at a height of 30 000 ft and say: “Thank heavens, some scientists know how to work with tantalum.”

If you want to impress the person sitting next to you, just say in an authoritative tone: “I wonder what the spot market price for tantalum is today.”

Richard Burt, of Canada, told us that, in Asia, they are digging up roads that were paved a century ago. Why? Back then, in the production of tin, they used the waste slag to make road surfaces. Now they have found that there are significant amounts of tantalum contained in this waste slag. A century ago, nobody realised that tantalum would be worth anything. In fact, the miner of the day would not have known what tantalum was.

Tantalum is also used to manufacture the special glass used to make the camera lenses in cellphones. So next time you take a photo with your cellphone, say: “Thank heavens that some scientists know how to work with tantalum.” Well, anyway, you get the picture. Tantalum is also used in computer flash drives. These fancy metals end up in strange places.

The South African Depart- ment of Science and Technology has launched a special programme, the Advanced Metals Initiative, to examine these metals so that South African innovation can be brought to bear on applications to make money for the country.

Dr Johann Nel, the ZrTa 2011 conference chairperson, is part of this advanced metals initiative. He invested a great deal of effort in getting the meeting-of-the-minds conference on the go. At such events, people do not just learn during the formal sessions but also while chatting over a drink as the South African sun sets. A French visitor told me that it was his fist time in Africa and he was excited to be here. Hopefully, he and the others will be back.

24-10-2011 - LED Applications Growing, Will Only Lead to More REE Demand
Monday, October 24, 2011
Posted by Brian Truscot

An end product’s supply chain can be far reaching, with parts or all of the upstream and downstream producers sometimes getting hit at different times by economic forces.

This appears to be happening in China’s domestic LED market, which has seen a marked fall-off in demand, according to the China Strategic Monitor. That’s hit pricing during the second half of this year.

“Investment plans are being curtailed both in the upstream and downstream compared to those presented last year,” according to the report. “Despite this there are many companies still attracted to the market and many pharmaceutical companies and even wineries in South China are moving into LED lighting products. Based on this trend the industry is likely to realize large-scale production capacity over the next 2 or 3 years and pricing for products should fall a further 20-30%.”

Industry watchers reckon 10% of LED-driven businesses in China could go bankrupt this year. And one chief executive, speaking at the recent China Industrial Development Forum for the Low Carbon Economy, said 90% of all China’s LED businesses are running at a loss.

Interesting. The country’s Guangdong province said earlier this month that it had exported US$3.81 billion worth of lighting products between January and August – that’s a 21% increase over the same time period last year.

“Customs authorities indicated that the main export market is still Europe and America with the two taking up 63.2% of the total,” a report said. “Though exports to Hong Kong, Japan and other ASEAN countries are up 60% on last year.”

The massive rise in LED exports is ascribed to the increasing trend of upgrading to energy-efficient lighting combined with the higher production values and quality in China, according to the report.

Still, various companies producing LED products complain that the industry is hit with high selling, raw material and R&D costs. So, while a company reports a 32% jump in LED sales in the third quarter of 2011when compared to 2Q10, the senior executives also talk about the need to implement structural changes, improve execution, reduce overhead costs and initiate job cuts.

Now, the LED industry uses a wide range of phosphor materials to convert light emission from LED chips into a different wavelength. So, combining a blue LED with one or more phosphors can create a white LED. Many of the phosphors used in LEDs contain rare-earth elements, the most common one being the yttrium aluminum garnet, which is doped with cerium. Another phosphor, called TAG, contains terbium, while silicate and nitride phosphors are commonly doped with cerium or europium.

Here’s a small example of how LED products are being used: Kingsun Optoelectronic Co has just installed more than 10,000 street lights containing one million high-efficiency white LEDs along 75 miles of roads in Shenzhen. Kingsun anticipates a 60-percent reduction in energy consumption compared to the high-pressure sodium fixtures that have been replaced in the upgrade.

And while LEDs are now widely recognized as emerging light sources for general illumination, it turns out that LED lighting can also be used in a broad range of life-science applications such as skin-related therapies, blood irradiation, pain management, hypertension reduction and photodynamic therapy, which, when combined with drugs, is finding its way into cancer research.

In other words, the LED industry is only now just starting to be exploited, meaning demand will grow across all sectors. Translation – more rare earths will be needed in producing these products as research advances are made and commercial producers become more lean and efficient.

19-10-2011 - Largest rare earths producer halts output
October 18, 2011
By Leslie Hook in Beijing

China’s largest rare earths producer, Baotou, has suspended production for one month in an effort to prop up falling prices, in the clearest signal yet that Chinese producers are intent on supporting prices at high levels.

China is the world’s biggest producer of rare earths, but tightening government controls and stockpiling has sent rare earths prices rocketing this year, with prices for some minerals increasing more than eight times during the first half of the year.

Rare earths prices have been sliding since their peak in July, but the slide has accelerated during the past week. Neodymium, which is used in magnets, has fallen 9 per cent, while Lanthanum, which is used in fuel catalytic converters, has fallen 12 per cent, according to prices from Shanghai Metals Market.
Baotou’s move suggests that Chinese efforts to control rare earths prices could be greater than previously thought. Traders have complained since last year that Chinese customs officials were forcing contracts to be rewritten to conform with a “secret list” of acceptably high rare earths prices, but that had less influence on the market during a time when prices were uniformly going up.
Rare earths are 17 metals critical to everyday life, with uses that range from fluorescent lightbulbs to BlackBerry vibrators and military radar systems. Although rare earths are not technically rare, China produces more than 95 per cent of the world’s rare earths, after cheap Chinese mines sent other rare-earths miners out of business during the 1980s.

After cutting export quotas last year, Beijing has this year focused on cleaning up the rare earths industry at the source, closing illegal mines and processing centres that were previously sources of pollution. Those in the industry believe that the rare earths reforms have also been aimed at increasing state control over the previously fragmented sector. In May, the government announced that three state-owned groups would take the lead in reshaping the industry in the fragmented southern sector.
Baotou, which controls about 40 per cent of China’s rare earths production through mines in Inner Mongolia, said on Tuesday that it was suspending operations at all of its rare earths processing facilities in a bid to “stabilise the market and balance supply and demand”.
It is the second time in recent weeks that Baotou has tried to prop up prices, after very publicly purchasing neodymium at above-market prices last month. Baotou said the suspension, which begins on Wednesday, would also cut supplies of unprocessed rare earths to processing plants that buy from Baotou.
Shanghai share prices for Baotou fell 5.8 per cent on Tuesday, against a broader market decline of 2.4 per cent.

17-10-2011 - Alternatives to Truly Rare Earths
By Meg Lowman
Posted: Monday, Oct. 17, 2011

Science...tells us that nothing in nature, not even the tiniest particle, can disappear without a trace. Nature does not know extinction. All it knows is transformation...and everything science has taught me ... strengthens my belief in the continuity of our spiritual existence after death. Nothing disappears without a trace.

Yttrium, promethium, europium, and luterium may sound like mythological characters, but they're rare-earth elements that comprise the backbone of new technologies for the 21st century.

Their discovery in recent years has advanced the electronics industry. Yttrium, when alloyed with other elements, forms part of aircraft engines; promethium is an essential component of long-lived nuclear batteries; europium powers images in flat-screen televisions; and luterium detects radiation in PET scanners used for medical research. Many new technologies owe their success to rare-earth elements.

The Prius, for example, contains rare-earth elements for its LCD screens, electric motor and generator, headlight glass, catalytic converter, UV windows, and mirrors; other cars require similar components to provide competitive features for buyers. Magnets under the hood of a Prius are some of the most powerful on the planet. Different from older technologies, they use rare-earth elements to charge the battery and turn the wheels.

As the world's technologies become increasingly dependent on rare-earth metals, their reserves become more valuable. Half the world's rare-earth deposits are in China, which currently mines almost 100 percent of global supply. Because China recognizes her own increasing needs for new technologies, it reduced rare-earth element export quotas by almost 40 percent in 2010.

What will other countries do to remain competitive in the high-tech market? Develop new technologies. Hubs like Research Triangle Park and Raleigh's new Nature Research Center are ideal incubators for the next generation of scientists and engineers. Currently, researchers are working around the clock to design products that do not require rare-earth elements.

The most economical solution is to reduce our reliance on rare-earth elements altogether. Toyota is scrambling to develop technologies that do not require magnets utilizing rare-earth elements in hybrid cars; the television industry hopes to someday eliminate the need for europium and terbium in its screen imagery.

Training the next generation of scientists and engineers to inspire creative solutions is critical; otherwise, iPods, PET scans, and plasma televisions may become increasingly limited in their production. After all, where will America be without scandium, a rare-earth element alloyed with aluminum in baseball bats?

Meg Lowman is an N.C. State University professor and forest canopy expert who directs the Nature Research Center, N.C. Museum of Natural Sciences. Online:

14-10-2011 - Peak Metal: U.S. Preparing for the Coming Shortages in Metals and Minerals
October 14, 2011 (Source:

Many if not most metals, rare earth minerals and other elements used to make everything from photovoltaic panels and cellphone displays to the permanent magnets in cutting edge new wind generators and motors will become limited in availability. Geologists are warning of shortages and bottlenecks of some metals due to an insatiable demand for consumer products.

2010 saw China restrict the export of neodymium, which is used in wind generators and motors. The move was said to direct the supplies toward a massive wind generation project within China. What happened was a two-tiered price for neodymium formed, one inside China and another, higher price, for the rest of the world.

Dr. Gawen Jenkin, of the Department of Geology, University of Leicester, and the lead convenor of the Fermor Meeting of the Geological Society of London that met to discuss this issue is reported in the journal Nature Geoscience, highlighting the dangers in the inexorable surge in demand for metals.

Dr Jenkin said: “Mobile phones contain copper, nickel, silver and zinc, aluminum, gold, lead, manganese, palladium, platinum and tin. More than a billion people will buy a mobile in a year — so that’s quite a lot of metal. And then there’s the neodymium in your laptop, the iron in your car, the aluminum in that soft drinks can — the list goes on…”

Jenkin continues, “With ever-greater use of these metals, are we running out? That was one of the questions we addressed at our meeting. It is reassuring that there’s no immediate danger of ‘peak metal’ as there’s quite a lot in the ground, still — but there will be shortages and bottlenecks of some metals like indium due to increased demand. That means that exploration for metal commodities is now a key skill. It’s never been a better time to become an economic geologist, working with a mining company. It’s one of the better-kept secrets of employment in a recession-hit world.”

There’s a “can’t be missed” clue on education and employment prospects. “And a key factor in turning young people away from the large mining companies — their reputation for environmental unfriendliness — is being turned around as they make ever-greater efforts to integrate with local communities for their mutual benefit,” said Jenkin.

Among the basics that need to be grasped to understand the current state of affairs are how rare many metals, minerals and elements really are. Some are plentiful, but only found in rare places or are difficult to extract. Indium, for instance, is a byproduct of zinc mining and extraction.

Economics professor Roderick Eggert of the Colorado School of Mines explains at the U.S. Geological Survey meeting indium is not economically viable to extract unless zinc is being sought in the same ore. Others are just plain scarce, like rhenium and tellurium, which only exist in very small amounts in Earth’s crust.

There are two fundamental responses to this kind of situation: use less of these minerals or improve the extraction of them from other ores in other parts of the world. The improved extraction methods seem to be where most people are heading.

Kathleen Benedetto of the Subcommittee on Energy and Mineral Resources, Committee on Natural Resources, U.S. House of Representatives explains the Congress’ position for now by saying in a report abstract, “China’s efforts to restrict exports of mineral commodities garnered the attention of Congress and highlighted the need for the United States to assess the state of the Nation’s mineral policies and examine opportunities to produce rare earths and other strategic and critical minerals domestically. Nine bills have been introduced in the House and Senate to address supply disruptions of rare earths and other important mineral commodities.”

Another prominent session presenter Marcia McNutt, director of the U.S. Geological Survey adds in her report abstract, “Deposits of rare earth elements and other critical minerals occur throughout the Nation.” That information puts the current events in the larger historical perspective of mineral resource management, which has been the U.S. Geological Survey’s job for more than 130 years. McNutt points out something interested citizens should be aware of, “The definition of ‘a critical mineral or material’ is extremely time dependent, as advances in materials science yield new products and the adoption of new technologies result in shifts in both supply and demand.”

The geopolitical implications of critical minerals have started bringing together scientists, economists and policy makers. Monday Oct 10th saw the professors presenting their researchalongside high-level representatives from the U.S. Congress and Senate, the Office of the President of the U.S., the U.S. Geological Survey, in a session at the meeting of the Geological Society of America in Minneapolis.

Those metals, rare earth minerals and elements are basic building materials for much of what makes energy efficiency, a growing economy, lots of employment and affordable technology possible. Its good to see some action, if it’s only talking for now. At least the people who should be keeping the system working are sensing the forthcoming problem.

27-09-2011 - Rare Industrial Metals a New Option for US Investors.
Rare Industrial Metals a New Option for US Investors

Over the last year the markets have been up and down, the precious metals have caused us to have some sleepless nights. One sector has been rising steadily for years. This is the Rare Earth and Rare Industrial Metals sector. One way or another everyone on the planet is dependent on these metals. Imagine a world without them; no cell phones, no I Pads, no LCD´s, no lasers, no jet aircraft, no electric vehicles, no alternative energies and no nuclear energy. National Geographic calls the rare earth complex of elements, ¨The Secret Ingredient of Almost Everything¨.

Something is happening under the radar that is having a huge impact on the price of many of the metals. China has a 90% control of all Rare Industrial Metals. China has decided to cut its exports of metals like tungsten, cobalt, indium, tellurium, tantalum and gallium. The Chinese know that if they make the prices of these metals out of reach for European, Japanese and American industry the industries will have to bring their jobs to China. This is already having an effect on the magnets industry. These magnets are critical for electric vehicles, wind power and many other applications. The USA, UK, EU, Japan and Korea have all put these elements on their critical lists.

How does an investor buy Rare Industrial Metals? In 2010 a company from Germany, ¨Schweizerische Mettallhandels AG¨, brought its highly successful business idea to the USA and Canada markets. A private person or entity can purchase metals 100% allocated and have them stored in the, ¨Zurcher Freilager¨, Swiss Free Zone. The metals are purchased from Haines and Maassen and then transferred to Switzerland for holding. There are no taxes when the client sell the metals within the, ¨Swiss Free Zone¨. The client can liquidate the metals in any currency they wish to any bank in the world.

If you purchase Rare Industrial Metals through, ¨Swiss Metal Assets¨, you have the peace of mind knowing that you have a hard asset. If you are looking for asset protection offshore, the folks at Swiss Metal Assets are a great option. To download the catalog or to request more information go to


Your Rare Metals Guy
Randy Hilarski

21-09-2011 - National Defense and Tungsten
Recently we have heard a lot of news about the rare earth metals, and the supply issues these metals are having. There are a few highly critical rare industrial metals that are also having supply issues. China has a near monopoly with many of these metals. Currently China has up to a 95% monopoly on the mining and refining of many of the most important rare industrial metals also known as rare technical metals. The British Geological Survey has produced an interesting report called the Risk List 2011. Read over the list and see for yourself. The metals on this list and other lists like it are needed for over 80% of all worldwide industrial uses.

The rare industrial metal I would like to discuss today is tungsten. On the list it scored 8.5 out of 10. According to the USGS China mines 85% of all tungsten. Similar to rare earth elements China has decided to cut back on its exports of tungsten. The British Geological Survey ranks tungsten higher on its list, than it does rare earth metals. In 2010 recycled tungsten was a promising 37% of all metal used. When you have a tight supply chain and then the top producer cuts its exports, this causes huge ripples throughout the world´s economy. China is the largest producer and the largest user of tungsten. In order to protect its own supplies of tungsten, China has begun to invest in mining projects outside of its borders.

The national defense industry has grown to depend more on tungsten due to its extraordinary properties. Tungsten has the highest melting point of all metals, the highest tensile strength of all metals, and it is highly resistant to corrosion. Tungsten is one of the refractory metals, which means it has high resistance to heat and water. The other refractory metals include molybdenum, tantalum, niobium and rhenium. Here I am going to list some of the military applications of tungsten.

1. Replacement for depleted uranium bullets
2. Armor piercing bullets, anti-tank weapons, bunker busting systems
3. Penetrators
4. Shrapnel head
5. Radiation protection (Submarines)
6. Lubricants
7. Armored vehicles
8. Grenades
9. Anti-vibration, counter and anti-flutter weights (aviation)
10. Superalloys for turbine blades, propellers, rotor blades and flight control surfaces.

According to the USGS the total tungsten mined in 2010 was approximately 61,000t. Total worldwide reserves are around 2,900,000t of which China has 2,000,000t. Canada, Kazakhstan, Russia and USA have significant tungsten resources. Many nations are attempting to invest in their mining industries. We have seen many news stories concerning countries like the USA, Canada, Japan, EU, Russia and Brazil investing large sums of money looking for new resources within their nations and abroad. There is much geo-political uncertainty throughout the world. Countries are seeing that they need to be independent or be at the mercy of other nations. This all means profits for rare industrial metal investors for the foreseeable future.

By: Randy Hilarski - The Rare Metals Guy

13-09-2011 - Why Buy and Store Metals Offshore
One of the most common questions I hear in the metals business is, “where do I store my metals?”. This question is often posed by a person, foundation or trust that is looking to secure their investments. Usually we hear about buyers of gold, silver, platinum and palladium who want to protect their assets but now there is a growing number of clients who are looking to diversify beyond the core metals we all know so well. How do we best protect our assets today with all the uncertainty? Here I will discuss why a portion of your metals should be stored offshore, and in what form works best.

What kinds of Metals can an Entity Store Offshore?

The metals people most often store outside of the country are gold and silver although experienced metals buyers might also buy platinum and palladium. Recently clients have been able to buy other rare industrial metals like tellurium, cobalt, molybdenum, hafnium, indium and tantalum. A few years ago the average investor would not have had the ability to buy some of these metals unless they owned a company that produced items which needed these rare industrial metals.

Why is it Wise to Store Offshore?

In the 1930´s during the Great Depression the US government confiscated all privately held gold. US citizens were not able to possess their own gold again until the 1970´s. Will we have a similar situation this time around with the world in its current state of transition? How is the US government planning on fixing this situation? Many countries are choosing inflation, currency devaluation, low interest rates and austerity measures. When these techniques fail to rein in the problems will governments turn to gold and their populations’ assets? One thing I know is that indium, cobalt, tantalum, tungsten and many of the other rare industrial metals and rare earth metals are on the critical metals list of the USA, EU, Japan, Korea and China. The question is whether rare earth metals and rare industrial metals will ever be deemed so crucial to economic and industrial applications that a country may decide to control the purchase of these metals. We see what China is doing with these metals and one must ask ones’ self, “Could these control measures spread to my country?”.

The old saying, “don’t put all your eggs in one basket”, applies here. Clients commonly say “I want to be able to touch my metals”. This is great, and encouraged but the stress of knowing so much of your assets are under one roof can be too much to handle for the average person. The metals can possibly become a liability and risk to you and your family’s safety.

Why would I not take delivery of Rare Industrial Metals and Rare Earths?

Some clients may wish to take delivery of their metals. This can be done just like gold and silver but the big difference is that these metals are used in industry. When the client takes the metals to the broker they will ask for the metals to be assayed. This is the process of taking a sample and sending it to a lab to verify purity. Also when dealing with rare industrial metals the amounts can be quite large and take up a good deal of space. Some elements like hafnium are controlled because of its use in nuclear technologies and it cannot be transported internationally. The metals trader stores the metals for the client and upon request resells the metals.

How do I Store the Metals Offshore?

When researching where to store your metals make sure to do thorough due diligence. There are many options for the investor. The most common choice is a safety deposit box in a bank. Safety deposit boxes are the most widely recognized. They are great for small allocations of metals. Storing in your second home offshore is also a common choice. This is also good for the client who has a small allocation of metals. Offshore bank vaults are also an option but can be rather expensive. The best option for clients with medium to large amounts of metals is an offshore private vault or depository. The prices are reasonable and they offer unparalleled privacy. A good example would be the Zurcher Freilager AG free zone in Switzerland.

What about Taxes?

This is a complicated issue that needs to be addressed by a tax professional. Every country has its own tax rules which are far beyond my expertise. As far as the Zurcher Freilager AG is concerned, as long as the assets are sold within the free zone it is a tax free event.
What are you doing about securing your future? Every day we hear more and more about an unstable financial market, geo political uncertainty, governments overreaching and bad economies. Wouldn´t it be prudent to have your assets spread out across the world?

What is holding you back?

By: Randy Hilarski - The Rare Metals Guy

09-09-2011 - EU creates storage for rare earths
The European Union is building its own reserve of rare earths, which are essential for the production of computer chips, mobile phones and other technological products. "We're trying to improve our supply and reduce our dependence on China," said a spokeswoman for EU, Industry Commissioner Antonio Tajani. This reserve needs to be created to ensure the supply of important minerals. The EU also wants greater access to supplies from Latin America, Africa and Russia.

The decision is a reaction to China's export restrictions on rare earths. Despite the protests of Germany and other industrialized countries, the People's Republic of China has lowered the export of major commodities and increased tariffs. China's export of these rare earths declined in the first half of this year by 35 percent. The government in Beijing officially justified this step with the protection of the environment. In July, the World Trade Organization ruled that the export restrictions are illegal. A WTO legal panel dismissed China's claim that its system of export duties and quotas on raw materials -- used in the production of steel, electronics and medicines -- served to protect its environment and scarce resources.China struck a defiant note in response to the ruling, which it is expected to appeal.


The prices of rare earths have already exploded due to the trade dispute. One kilogram of dysprosium, which is used for in mobile phones and hybrid vehicles, currently costs about $2,840. At the beginning it was still $400. The price of yttrium has doubled as well. This chemical element is required, among other things, for the construction of energy-saving light bulbs and televisions.

Already, there are signs of a further tightening of the export rare earth and thus a further increase in prices. According to Chinese state media three of the major mines will be stopped indefinitely. The demand for rare earths will double according to experts in the next five years. China is not in a position to meet this increase in demand.

Rare Earths

There is a total of 17 rare earth metal base materials including scandium, yttrium and lanthanum. The elements have unusual properties and their use in metal alloys and optics is indispensable. In many key technologies, they play an important role. The spectrum ranges from their use in mobile phones, batteries, lasers, flat panel displays to weapons systems. For the production of hybrid vehicles, the raw materials are important. The actual raw materials themselves are not rare.

However, the known deposits are to a large extent in China and are also mined almost exclusively there. As long as China's comparatively cheap raw materials are available it is not worth many industrialized countries mining these themselves.


08-09-2011 - Cobalt a Critical Rare Industrial Metal Vital to U.S. Energy Policy
Cobalt was discovered around 1736 by Georg Brandt a Swedish chemist. The element was found to give glass a hint of blue. For centuries cobalt has been used as a pigment in glass and porcelain. Chinese artisans used it to color their vases and other ceramics. Over the last few decades cobalt has had a grand resurgence. In the late 1970´s Zaire, now Democratic Republic of Congo had a bloody civil war which cut off the world from much of the production of cobalt. During this time alternatives had to be found because the price of the rare industrial metal accelerated beyond what industry was willing to pay. Since then the amount of uses for Cobalt have expanded to the point where the US Department of Energy added cobalt to its, "Critical Materials", list.

This metal has found its way into many of our technological applications used today. Cobalt´s uses include aerospace, green tech, pigments, dyes, batteries, wireless technology, computers, magnets, desulfurization of crude oil, orthopedic implants and high-strength superalloys. The use of cobalt in superalloys is mainly due to its corrosion resistance, temperature stability, and wear resistance. These attributes make it highly suitable to aircraft engines and gas turbines. The US Department of Energy predicts that electric powered vehicles (PHEVs and EVs) will need an estimated 9.4 kg each of cobalt. By 2012 the estimated sales of hybrid and electric vehicles worldwide is approximately 2.2 Million, and by 2015 to be at least 10% of the world auto market. Wind energy also uses large amounts of cobalt within its turbine blades and samarium-cobalt magnets.

The US Department of Energy has made it clear that any rare industrial metal used in clean energy technology such as electric vehicles, solar cells, wind turbines and energy efficient lighting will be deemed critical. The problem for the USA lies in its supply of cobalt. Still today over 40% of global production is from The Democratic Republic of Congo. China has an agreement with the DRC to export all of the cobalt to China where it is refined. Once again China has a stranglehold on rare industrial metals similar to what is happening in the rare earth market. The big difference is with rare industrial metals it is much more difficult to expand supply. There are very few known deposits of cobalt, most production is a by-product of copper production. The USA has been recycling 15% of its cobalt and importing 85% from foreign sources. The bad news for the USA is that China needs cobalt as well. Currently the USA has only one mine that is being prepped for production in Idaho. This mine will primarily produce cobalt totaling 3% of the global supply. The main players in cobalt refining are China, Finland and Canada. According to the USGS in 2010 the total world production of cobalt was around 88,000t.

If a person is looking for a way to profit from cobalt there are a few options. A person could buy stocks of mining companies that have rights to cobalt mines, which is the traditional method. Recently the London Metals Exchange (LME) launched a cobalt contract traded in 1 metric ton lots of 99.3% pure cobalt. The other option is buying cobalt in Germany and having it stored 100% allocated in Switzerland. A company that offers the option of buying cobalt in smaller quantities is Swiss Metal Assets. Although cobalt is only one of the various rare industrial metals they offer.

By: Randy Hilarski - The Rare Metals Guy

07-09-2011 - Rare Earth Q4 Outlook

It’s a familiar story for rare earth market watchers – sky-high prices and tight supply outside of China.

But until significant production outside of China is established, analysts foresee few changes to this trend– barring end users shutting up shop to cut demand.

2011 has thus far seen prices for most rare earth elements take off in the wake of tight control from over production and export quotas. Total production in China for 2011 has been capped at 93,800 tonnes, an increase of 5 percent from 2010, while exports have been restricted to 30,184 tonnes,slightly less than the 30,258 tonnes permitted last year.

Although Lynas Corporation Ltd. (ASX:LYC) officially opened their Mount Weld mine in Western Australia on August 4th, production from this facility, which will initially be 11,000 tonnes per year, is not likely to make an impact on the REE market until 2012, as the first feed of rare earths concentrate into the yet-to-be-fully-licensed Lynas Advanced Materials Plant (LAMP) in Malaysia is scheduled for Q4.

In the meantime, Molycorp Inc. (NYSE:MCP) remain the only major producer filling the gap outside of China, and the Colorado-based company has profited nicely from the comparatively modest amount of supply it has been able to pump into REE markets so far this year.

Last month Molycorp’s reported production results of 815 metric tonnes of rare earth oxides for Q2, and also announced that they expected output of 977-1,321 metric tonnes during Q3, and 1,017-1,377 metric tonnes for Q4.

Coupled with the sky-high prices most REE are currently fetching, the anticipated increase in output from Molycorp has left some analysts quite bullish on the company’s performance outlook for the remainder of the year.

Prices may climb further still as China halts production at 3 mines

One twist that may still play a major role in REE markets before the year is out is the halt in production announced by the Chinese government on Monday.

State media reported that production has been ordered suspended by year’s end at 3 out of 8 mines in Ganzhou, Jiangxi Province. The Ganzhou region produces nearly 40 percent of China’s rare earths.

Li Guoqing, Director of the Ganzhou City Mining Management Bureau, commented on Monday that it was unknown when production at the 3 mines would resume, and that an eventual resumption of operations would be based on directives from the provincial government.

Although the shutdown is mostly a consequence of China hitting its annual production quota too early and the government clamping down on illegal mining and exports, it is unlikely to have an impact on the 15,000 tonnes of rare earths slated to be exported from China over the last half of the year. The prospect of a prolonged shutdown in one of China’s key mining regions may well begin to ripple through REE markets during Q4.

EU reveals it is stockpiling rare earths to reduce dependence on China

Another development that could play out on REE markets over Q4 was the disclosure by the European Union (EU) on Tuesday that they are stockpiling rare earths to reduce their dependence on China.

Speaking to Reuters, Andrea Maresi, press officer for EU industry minister Antonio Tajani confirmed that they were “working to secure supplies of these minerals from outside of the EU, such as from Latin America, or from Africa or other countries like Russia.”

“We are trying to improve our sourcing and reduce our dependence on China”, he added.

David O’Brock, CEO of Molycorp’s majority owned Molycorp Silmet AS in Estonia, revealed to Reuters in a recent interview that he had been approached by the EU about stockpiling, and had advocated stockpiling at least 3,000 tonnes of rare earth carbonate.

In spite of his conviction that the EU should be stockpiling to offset export restrictions from China, however, O’Brock believes REE prices will level-out in Q4.

“I think that prices have already started to stabilize. And consumers have found their upper boundaries that they can pass on to their customers, unless the Chinese suddenly open the flood gates, I don’t see prices dropping and I don’t see a continued climb in the prices,” he said.

Disclosure: I, Robert Sullivan, hold no direct investment interest in any company mentioned in this article.

By: Robert Sullivan

07-09-2011 - Take A Step Back And Look At The Macro Picture

Take A Step Back And Look At The Macro Picture

Good Afternoon/ Good Morning America..I have decided to take a step back whilst all are so concerned with the short-term headlines and take a look at the macro picture developing. Many are questioning risk positions but as you will read below the risks remain extremely elevated and policy mistakes look more likely than ever. Currencies may just be losing their store of value and precious metals may have to take up the slack!!!! See below...

Keep the Faith....

Let’s take a step back and look at the macro picture that is developing across the globe:

In my humble opinion the global economy is facing one of the toughest times it has seen in decades and the inter-connectivity of the “global village” will actually exacerbate the problems the developed world faces. The idea that the emerging world can de-couple and save the world is quite ludicrous when they rely so heavily on exporting to the developed nations. The demand drought that is coming from the consuming, developed world is only part of the problem. The perfect storm is still building out there and the consumer is the key. Global growth expectations seem far too optimistic in my view!

The problem is that to make austerity measures work, the governments need the consumer to be strong not weak and they certainly do not need them to start deleveraging and refusing or reducing credit. This however, is exactly what austerity brings. A lack of confidence amidst rising unemployment and a reduction in benefits, coupled with falling housing prices and to some considerable extent, a loss of faith in government, does not fill consumers with an appetite for more risk. In fact the opposite is the case. Consumer confidence tells us that deleveraging will increase very soon.

However the problem does not only lie with the consumer, the banks and to some extent many sovereign nations are in deep trouble as well. What a cocktail. Economists always look back and suggest ways out of this and the Keynesian believers seem to think history can help them. I am afraid this time is different as I am not sure we have seen anything of this nature before (maybe 1929-1933) and the central banks are run by academics and economists who use models which simply do not have the scope to predict what is potentially coming, as evidenced by their disgraceful predictions based on little more than hope than knowledge recently in my view. The models at all the central banks have been proven yet again to be useless along with many economists, in predicting slowdowns, financial crisis or recessions! Unfortunately the models are designed by the economists and this needs to change quickly.

Bank regulation was seen to be needed urgently after the sub-prime issue but at the first signs of stress the calls for a softening ring out, so it looks like a return to moral hazard. The question is do some of the banks need to fail to keep the system alive? For sure the system is broken and the pain would be deep but this cannot go on in its current state. Treasury yields are at their lowest for 60 years for goodness sake and the Fed is expected to reduce yields further at the longer end! What if that does not work and to be honest a slight shaving of long-term rates will do nothing to change sentiment when a collapse in prices has failed to trigger any bargain hunting at all! Developed world rates are headed for Japanese type levels and it is clear that they have far from helped Japan! It is not all about low interest rates Ben!

To amplify this, taking a step back, we are looking at potential Nations defaulting, plus augmenting further austerity measures to try and reduce debt (which will stifle any growth for years to come), the spiral of banks coming close to nationalisation across the developed world, consumer deleveraging, rising unemployment, falling house prices and a rising loss of faith with government along with discontent and civil unrest. Why on earth would you sell gold when the outlets for safe havens are being radically reduced since the SNB move and the threat from Japan to intervene? Plus the fact that currencies offer less in the form of stores of value also. A massive shift from currency investment to precious metals could take place.

Currency wars will exacerbate this and whilst the SNB move is from a small nation, what happens if one of the big boys like Japan join in? Carnage basically and trade wars and border issues will ignite and G20 could implode. Just what the world is ill-prepared for but it looks like it is brewing. Civil unrest and regime changes around the world will add to the soup.

The stimuli we have seen are the effect not the cause both in the US and Europe and we need to get back to basics and solve these issues at their roots. However they do not look like they are helping much. For sure QE1 may have stopped a depression for a while but it may have only delayed it. What worries me is what the end game is for the Fed? If they are solely looking to save the banks then the US economy is in deeper trouble than I thought. He needs to get out into the real world and then he would realise how futile creating a “wealth effect” is in reality. Higher taxes will surely come with austerity measures and the US is already far behind the curve for reducing debt. Consumers will save and deleverage for sure and the fight, if ever we see it, against the deficits will come at a price and that will be higher unemployment and slower growth! Bond markets are beginning to price this but the Dollar is another matter. Will the US finally admit and use the Dollar as a monetary tool. I think at some point they will, especially if the currency wars spread. However until then the Dollar will be forced higher by other nations. If it affects US policy, which it will at some point, then the US may turn very insular and return the idea that the Dollar is their currency but your problem. (John Connally. US Treasury Secretary 1971). On that day all bets are off.

By: Tyler Durden

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Rare Earth Elements
  Samarium Sm 62  
  Yttrium Y 39  
  Molybdenum Mo 42  
  Bismuth Bi 83  
  Europium Eu 63  
  Gallium Ga 31  
  Hafnium Hf 72  
  Cerium Ce 58  
  Zirconium Zr 40  
  Lanthanum La 57  

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