The most important and wide-ranging historical analyses of the economic consequences of our activities have simple yet globally descriptive titles. In the eighteenth century, Adam Smith began the modern study of global economics, with his famously titled seminal treatise “An Inquiry into the Nature and Causes of the Wealth of Nations.”

In the first part of the twentieth century John Maynard Keynes described the economic consequences to both the victors and the vanquished of World War I (known as The Great War in the days when it was hoped that it would be the last of its type), in “The Economic Consequences of the Peace.”

Keynes next deeply studied global economics and titled his masterpiece, simply “The General Theory of Employment, Interest and Money.” Milton Friedman then wrote “A Monetary History of the United States,” and Frederich Hayek penned “The Road to Serfdom” as his analysis of the then-raging battle between the consequences of socialism and capitalism. All of these twentieth century studies were written before the middle of that century.

In Smith’s day the richest nation on earth, in terms of what we now call gross domestic product (GDP), was probably China. Between Adam Smith’s death and the publication of “The Road to Serfdom”, the Industrial Revolution led to the pre-eminence, economically and globally, first of Great Britain and then of its intellectual descendant, the United States of America.

The wheel of history seems now to be turning again, so that we will surely see by 2020 at the latest, the return of China to its former place as the nation with the highest GDP. This return to economic dominance by China could not have been, and was certainly not foreseen in 1947, when America owned half of the world’s gold reserves and was the richest nation in history both in GDP and in per-capita income.

The last half of the twentieth century has seen the transformation of China from a third-world socialist economy, to first an export powerhouse and now a nascent consumer economy, under a hybrid version of capitalism that sees state control of the banking system used to control the direction and growth of capitalist institutions. The Chinese refer to this as “Capitalism with Chinese Characteristics,” but it is really just a very sophisticated state-controlled capitalism.

Chinese capitalism has created the greatest commodity-consuming nation in human history. Just with regard to metals, which is the economic sector that I study, we now live in a world where the Chinese economy consumes nearly 70% of the total output of all metals of all kinds, produced in the world each year. China at the same time produces more than 60% of all of the metals produced in the world each year. Thus any analysis of the markets for, and the future of, any metal – any metal at all – must assume that China is and will continue to be the major consumer of that metal. As it also turns out, China is probably going to also be the major producer of that metal too.

Great Britain in 1850 and the United States in 1947 held the titles of the world’s largest producers of iron and steel. The first because it was the home of both the Industrial Revolution and the birthplace of modern capitalism, and the second because as the victor and armorer of the world in the Second World War, it had by far the largest remaining iron and steel industry. It also had the pent-up demand not only of its 13,000,000 returning soldiers and sailors to satisfy, but also that of its 120 million additional and now richest in the world consumers, who had been saving enormous sums for a decade.

Now, in 2013, it has been not war but industrialization, mainly in China, that has produced a nation of voracious savers whose centrally controlled economy is moving to create the greatest consumer-driven economy in the history of the world. More than one billion Chinese consumers are being readied to continue the growth of the Chinese economy and its starting point is already that of the world’s second largest economy. I have no doubt that another two billion Asians, Indians, Indonesians, Koreans, Malaysians, and Filipinos will join the Chinese consumer boom by 2050, to firmly center the global economy in Asia.

What will this mean for the markets for critical and strategic materials? First and foremost it will mean, and already does, that civilian not military demands for structural and technology metals will be the dominant and overwhelming driver for the growth in their supply. It also means that the natural resources of both the wealthy and of the poorer of the resource-rich nations, which do not have enough population or industry to build the capital they need to produce or consume their domestic resources, will be developed by Asian capital and purchased for use domestically in Asia.

The currently wealthiest nations of the world in North America, Western Europe, and Japan are mature consumers of material natural resources. Their economies are not growing. Therefore the only material natural resources they need are to replace those lost through waste or mismanagement.

The economic power and growth of Asia’s economies will, I believe, mean that the rare technology metals will ultimately only be available to non-Asian (but still rich) economies through conservation and recycling. This is not a military-capability problem; it is a deep problem of the civilian standard of living. Because it is not a military-security issue there is a zero probability that governments in the West or Japan are going to finance mining to produce new supplies of rare technology metals. In any case, only in the USA are there sufficient deposits of such materials to make it worthwhile. Mining is today in the USA too politically expensive for our short-sighted politicians to even consider such a solution.

The immense resources of rare technology metals contained in the existing American and European “inventories” of end-of life consumer and military scrap are already being mined by Asian entrepreneurs for their own benefit. I believe we are already at the stage in the USA where producing rare technology metals from scrap is the only remaining hope of obtaining a secure supply of the lowest possible cost materials, to feed a total domestic supply chain to satisfy our domestic (replacement) demand for such materials.

It is now sixty years since the great twentieth-century economists explained where the global economy came from and where it stood. We have been annotating these great works of economic analysis and theory for nearly three generations, as academics advise ever more poorly educated politicians on how to create wealth equitably. it seems to me that this instruction passes right over all of their heads, and it has become accepted as inevitable that the rapacious accumulation of wealth and power is the natural state of human endeavors.

It is obvious, however, that the avoiding of polarization into “haves” and “have nots”, by the waste of productive capital through its pointless accumulation, is the major purpose of government. Such accumulations reduce society to oligarchy and the protection of the oligarch’s wealth, the protection of which then supersedes a society’s economic growth and fair distribution as economic policy.

If we have to beg the oligarchs to follow a path that provides the most wealth for the many, we are already lost.

In June 2012, while passing through Sweden on my way to a magnets conference in Finland, I made a short detour to visit the Woxna Graphite Mine, the flagship graphite project of Flinders Resources Ltd. (TSX.V:FDR) and located at the site of the company’s Kringel graphite deposit.

The previously operating Woxna mine is located in central Sweden, approximately 5 miles from the town of Edsbyn. The capital Stockholm lies around 190 miles to the south.

Per the September 2012 NI 43-101 compliant mineral-resource estimate for the Kringel deposit, at a 7% graphitic carbon (Cg) cut-off grade, 1.5 Mt of the resource is at the Measured level @ 10.4% Cg, and 1.1 Mt is at the Indicated level @ 10.7% Cg. This results in an estimated 273 kt of Cg present in the deposit. Indications are that there is a significant fraction of the more desirable large-flake graphite at this site.

The Kringel deposit is actually one of four graphite deposits that form part of the Woxna graphite project, named after a local river and which is wholly owned by Flinders through its Woxna Graphite AB subsidiary. The Woxna mine is fully permitted with much of the previously operating mine and plant infrastructure still in place. Woxna Graphite AB produced some 13,000 tonnes of graphite per year at the Woxna mine, from 1996 until 2001, when the mine was closed and put on care and maintenance due to falling graphite prices.

The graphite produced included coarse (+160 µm) , medium (+75/-160 µm) and fine (-75 µm) flake materials. Size distributions within the graphite produced were typically 40%  @ +160µm, 28% @ +75/-160µm and 32% @ -75µm (all at up to 94% C).

Getting to the Woxna mine site was straightforward. After taking the train north from Stockholm to Söderhamn, I was met at the train station by Folke Söderström, Managing Director of Woxna Graphite AB. We took a 90-minute drive west towards Edsbyn and the mine site, and along the way we had the chance to discuss the Woxna project, its history and its place within the local community.

You can see photographs taken during the visit, in the galleries below (click on each image to enlarge it).

The mine site itself consists of an open pit, a processing facility and a tailings storage facility from past production. In addition to getting the mine back up and running, Flinders has invested resources since acquiring the project, to upgrade the historical graphite resource estimates, resulting in the initial NI 43-101 compliant estimates summarized above. My visit to the site coincided with a visit from Geoffrey Reed, a consulting geologist who is the independent Qualified Person for the Woxna project, who was also able to offer insight into the geology of the project.

The graphite mineralization at the Kringel mine occurs in two types. The A-type contains higher grades of graphitic carbon; the B-type has lower graphite content, and has relatively high concentrations of sulfides. The latter is more challenging to process because of the impurities present, and most of it was historically stockpiled during mining. Mr. Söderström indicated that the company plans to develop processes to be able to use B-type material. According to the resource estimate, the Kringel resource was drilled within an area that was approximately 1,200 m in length, by 100-200 m in width. Mineralization in the deposit was intersected by all drill holes, is present to at least 150 m below ground and is open at depth. The thickness of the mineralization was typically greater than 10 m, but varied between 5-25 m. Mineralization at Kringel remains open along strike too.

The host rocks in the vicinity of the Kringel deposit contain sulfides, meaning that they are naturally acidic. Indeed, initial measurements from the tailings pond indicate pH levels of 3-3.5, a significant level of acidity; the mine pit is partially filled with groundwater, with initial pH levels of 5-4.5. Mr. Reed commented that pH and water management for the project, both in terms of processing the graphite once mined, and subsequent safe disposal of waste materials, will be particularly important for the project. In the vicinity of the tailings pond are clarification ponds that were used previously to help control the pH levels of the water subsequently used in the processing facility.

The bottom of the pit is approximately 45 m below the adjacent surface. Recent calculations indicate that there is approximately 75 kt of A-type mineralization down to approximately 65 m below the adjacent surface. Mr. Söderström said that he planned to de-water the pit this coming fall (autumn), so that the company could get a better idea of how the pit was mined previously, and to begin new mining. The pit contains approximate 200,000 cubic meters of water. He also commented that they were looking to use strip and sterile areas on the property as feedstocks for road and berm construction, to reduce the cost of trucking in such materials.

Since my visit to the Woxna mine site, dewatering of the pit has begun. The water in the mine has been conditioned via the addition of lime, to increase pH levels and to ensure that it complies with the conditions of Kringel’s water discharge permit. Recent testing has confirmed that the water is within specification and so pumping of the water from the pit has now commenced.

The tailings areas from past mining are contained by two walls, known as the upper and lower dams. It is likely that some remediation work will be required for the tailings area, including sealing or otherwise preventing acidic run off from entering the clarification pond (known as acid mine drainage). There is some evidence that the tailings dams have leaked at some point, meaning that pH levels must be managed before water can be discharged from the mine site (in similar fashion to de-watering the pit). Characterization work at these tailings sites is ongoing, so that the geologists and mining engineers have a better idea of what they are dealing with, and so that they can satisfy environmental permitting requirements into the future.

Also on-site during my visit was Elin Ryosa, a geologist originally from the area, and who is working as the exploration and mine geologist for the project. She explained that the local geology at site shows development of trace to massive graphite in high-grade metamorphosed, metasedimentary and metavolcanic host rocks, which have been metamorphosed to sillimanite grade and intruded by felsic units, ranging from alkali pegmatite to granite. At Kringel, the geology is dominated by steeply-dipping, calcareous quartz-rich meta-tuff, with interbedded metasedimentary units and cross-cutting pegmatite. Two discrete tabular zones of graphite mineralization are developed and trace pyrrhotite (an iron-bearing mineral) is associated with the mineralised zone, its foot wall and hanging wall.

We were able to go out into the area surrounding the pit, where drilling was being undertaken for the mineral-resource estimate. Ms. Ryosa commented that in continuous zones the diamond drilling rigs could produce up to 25 m of drill core per shift, meaning that a single drill rig could complete a hole every day or so, depending on conditions. The area being drilled was quite boggy when we visited and small clearings have to be made in the forest to complete the work. The region of interest around the Woxna mine has a covering of moraine deposits from the last Ice Age that can be several meters thick in places. Because graphite and pyrrhotite are good electrical conductors, modern geophysical techniques make it fairly straightforward to detect the presence of graphite to significant depths.

We then took a look at the existing processing facilities on-site at the Woxna mine. When in production, Mr. Söderström said that the initial mining and crushing was historically undertaken by a third-party contractor, with the material being fed into rod and ball mills for subsequent grinding. The coarsest flake material was subsequently removed by flotation as well as spiral and vibratory tables for gravimetric separation.

The rest of the material went through additional cycles of grinding, milling and flotation. These materials were then filtered and dried, before being sieved into the coarse, medium and fine flake sizes described above, and then bagged for shipping. The original crushing equipment was removed from the facility when the mine closed, but otherwise all of the machinery from grinding to final packing remains in good order.

Mr. Söderström indicated that at some point in the life of the original mine additional milling equipment was acquired in order to better optimize the processes being used. However, restricted funds due to the low graphite prices at the time, meant that numerous opportunities to improve purity, large-flake recoveries and to reduce operating costs were unable to be pursued.

Interestingly, at the time of my visit there were approximately 500 t of previously processed graphite that had not been shipped before the original operations closed. Mr. Söderström indicated that the company was in the process of characterizing these stocks, with a view to selling them to end customers as a means of both generating some revenues and cleaning up the site. Since my visit, processing at the Woxna mine has been restarted, and production of graphite from these stockpiled materials is now underway. The entire supply has apparently been sold to customers in Germany.

Mr. Söderström said that the company has developed a good rapport with the people who live in the vicinity of the Woxna mine, and the other landowners. One of the first things that Flinders did on acquiring the project was to meet with the local residents, to introduce the management team, to explain what the plan was for the mine, and how that might benefit the local community (in contrast to the low-key approach taken by the previous owners of the mine). There is a local cooperative for landowners, which among other things organizes local road maintenance. As previously mentioned, the by-product of the mining activities at the Woxna site is suitable for road construction, and so could be used on local roads. It is important for Flinders to engage with this group on topics such as new water pipelines, road upgrades and so on.  An example of such projects is a proposed new road to connect the Woxna mine directly to the main road, bypassing the local community so that vehicles coming to and from the mine will not disturb the local people.

Speaking of water; the Woxna mine draws its power from a hydroelectricity power station on the Woxna river, and will continue to do so when back in operation. This station was built before the original mine was opened, to provide power to the entire district, which includes a number of lumber mills. Some of these mills are able to provide heating to the local district through the effective use of waste water, lowering heating costs. Mr. Söderström commented that the company might consider installing a wind turbine on site, or using forestry waste in boilers, to reduce energy costs.

Forestry companies own most of the land surrounding the Woxna mine; timber production has been the dominant industry in the region for many decades. Flinders is interested in acquiring some of the land surrounding the mine as part of the further development process, and to date there have been no obstacles to pursuing that course of action. The value of such land is typically based on the value and quantity of the timber that could be harvested.

The Woxna mine is located less than 10 miles from a rail line and the port of Söderhamn on the east coast of Sweden is 50 miles to the east. Getting graphite products to market, therefore, should present few logistical issues, as evidenced by sales of graphite in the past from this facility.

After visiting the Woxna site, I believe that Flinders is well on its way to getting this project back up and running, with relatively low capital expenditures required, compared to green-field graphite projects elsewhere. Since my visit, the company published the NI 43-101 resource estimate for the project and started reprocessing the aforementioned stockpiled graphite. They have also appointed Craig Griffiths, an experienced mining engineer, as General Manager for the mine, with him starting his work there later this month.

My thanks go to Martin McFarlane, President & CEO and his team, for organizing the logistics of my visit, and to Folke Söderström and his on-site colleagues for hosting me on the visit.

Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of, nor a consultant to, Flinders Resources Ltd. (Flinders). Neither he nor Technology Metals Research, LLC received compensation from Flinders or from anyone else, in return for the writing of this article.

In October 2011, I took a short trip to Sweden, invited by Tasman Metals Ltd. (TSX.V:TSM, AMEX:TAS, F:T61) to join an analysts’ tour of Norra Kärr, Tasman’s flagship rare-earth-element (REE) project in Scandinavia.

First things first: the Swedes spell the name of this mineral occurrence as ‘Norra Kärr’, not ‘Norra Karr’. This spelling renders the project’s pronunciation as something similar to “Nora Shah”, instead of “Nora Car”. The things you learn on the way to learning other things…

Norra Kärr is located 10 miles northeast of the town of Gränna, which itself sits on the shores of the beautiful Lake Vättern, Sweden’s second largest lake and found in the south central part of the country. The city of Jönköping and its 90,000 inhabitants are 30 miles to the southwest; Stockholm is around 200 miles away to the northeast. Norra Kärr is readily accessible from all parts of the country via the E4 highway that runs close to the deposit. And by close, I really do mean close; while standing in the middle of the deposit, we could hear the cars whizzing by on the highway. Clearly then, accessibility is a key positive for this mineral deposit, regardless of what might be present in the ground. Power and water are also available right at the site.

Having flown into Stockholm the night before, early the next morning the group piled into a couple of vans and cars, for the 3.5 hour drive to the project from the Swedish capital. I spent the journey in the company of Tasman’s Chief Geologist Magnus Leijd, and Yasushi Watanabe, the well-known senior geologist with the Geological Survey of Japan, and who was also along for the visit. This was an excellent opportunity to listen to the two geologists talk about the project, and for me to pose a bunch of layman questions, which fortunately they were both only too happy to answer.

Along with Mr. Leijd, our Tasman hosts included Mark Saxon, President & CEO, Jim Powell, VP for Business Development and Henning Holmström, Project Development Manager.

Norra Kärr is the only rare-earth project in mainland Europe with an NI-43-101-compliant mineral-resource estimate. Per the most recent numbers at the time of writing, Norra Kärr contains an estimated 60.5 Mt of rare-earth mineral resources, at an average grade of 0.54%, resulting in an estimated 327 kt of rare-earth oxides (REOs) present. In addition to the production of rare earths, the project is of interest for zirconium (Zr), hafnium (Hf) and possibly niobium (Nb) as well. Oxides of europium (Eu) through to yttrium (Y) make up 53% of the total REOs (TREOs) present, thus Norra Kärr has one of the most attractive TREO distributions of any rare-earth project with a defined resource. Despite the relatively low overall TREO grade in the deposit, the actual in-situ grades of dysprosium (Dy) and Y, two of the critical REOs (CREOs), are some of the highest of any defined resource.

All of these factors, combined with very low concentrations of thorium (Th) and uranium (U) (7 ppm and 14 ppm respectively), mean that the deposit is of high potential strategic interest.

You can see photographs taken during the visit, in the galleries below (click on each image to enlarge it).

Mr. Leijd indicated that the main minerals of interest at Norra Kärr are eudialyte (85%) and catapleiite (10%), and other minerals that closely resemble them. The latter is a Zr silicate not unlike eudialyte. Norra Kärr probably has the largest occurrence of catapleiite currently known in the world. As an aside, he made the interesting comment that the more intense the characteristic pink color is in a eudialyte sample, the less rare earths it contains, with the mid-brown eudialyte being preferred. The host rock consists of feldspar, nepheline and pyroxene.

There are few exposed outcrops at Norra Kärr; much of the surface is covered by so-called glacial till. Mr. Leijd mentioned that since much of Sweden has been covered in ice in the recent geological past (10,000 years, which is recent to a geologist), there are very few weathered rocks in the country. While this doesn’t sound all that important, its significance was pointed out to me.  The lack of weathering means that the rare-earth minerals are the same at surface as they are at depth in the Norra Kärr intrusion, and they haven’t been altered to new minerals by the effects of air, water and time. While Norra Kärr is not unique in this regard, this lack of mineral variation should simplify subsequent processing of the deposit.

During initial bench-scale metallurgical testing, the main rare-earth-containing minerals were all very soluble in sulphuric acid, with the catapleiite dissolving faster than the eudialyte. Early in the company’s research, preliminary leach tests gave only a 50% rare-earth element (REE) yield. However, after analyzing the residues and mass balance of the metals, the folks at Tasman noticed that most of the remaining mineral was eudialyte, and were able to refine their processing to recover up to 90% REEs in solution. Since my site visit, Tasman has released the next round of metallurgical results, arising from their work at the laboratory of the Geological Survey of Finland.  They appear to have made good progress, with a mineral-concentrate step and room-temperature leaching both giving good recoveries.

I asked Mr. Leijd about the presence of zircon in the deposit, since this mineral tends to be an impediment to processing at other projects, due to its refractory nature. He indicated that there were only very low amounts of zircon present, around 0.6% (compared to around 10% for some of the other well-known deposits). I asked how important it was to distinguish between different mineral types within the Zr silicate family, since there is a wide range of Zr silicate minerals known to date, some with pretty complex chemical formulae (I don’t think I’ve ever seen the same formula for eudialyte, for example, ever used twice!) Mr. Leijd commented that from the metallurgical flow sheet point of view, the differences are only really important if they exhibit different processing characteristics. The mineral zircon, for example, is known to process very differently from the eudialyte present at  Norra Kärr. This makes sense – the empirical results of testing are the driver here.

Mr. Leijd explained that the Norra Kärr mineral deposit has been known for quite some time. It was explored for its Zr content after the Second World War, and indeed at the entrance to the deposit there is a sign in three languages, explaining some of this history. Sweden has of course played an important historical role in the development of rare earths. It was from a black mineral (later named gadolinite) found in a quarry in Ytterby, a village in the vicinity of Stockholm, that the chemist Johan Gadolin extracted the first individual rare-earth elements (REEs) in the last decade of the 18th Century. Four of those elements were named after the village, namely terbium (Tb), erbium (Er), ytterbium (Yb) and yttrium. Elsewhere in Sweden, from a mineral found in the ore fields of Bastnäs, cerium (Ce) and lanthanum (La) were first discovered and isolated – the mineral subsequently being named bastnäsite (or bastnaesite), after its place of first discovery.

Sweden as a whole has a long history of mining, but the specific area in which Norra Kärr is situated does not have a modern mining operation. As mentioned above, the project is close to a large freshwater lake, which means that any subsequent work has to be particularly mindful of the environmental impact. In the summer of 2011, the Swedish authorities designated the Norra Kärr area as one in which mining activities will take precedent over other land uses, such as the construction of buildings. While there are around 50 such designated sites in Sweden, this is the only one so-designated because of the presence of rare earths. This designation does not mean that the project can avoid the usual normal environmental permitting procedures, but has significantly increased the awareness of the project within the local community and government.

Tasman is looking to mine 1.5 Mtpa of material at Norra Kärr, from which 6 kpta of TREOs will be produced. Projections were built around the potential numbers for Dy. Mr. Saxon said that the project could produce around 360 tpa of Dy, which would meet approximately 15% of total world demand. Such numbers will depend on the results of the Preliminary Economic Assessment (PEA) or scoping study for Norra Kärr, which was initiated in August 2011 and is due for completion shortly. Mr. Saxon said that they anticipated very low strip ratios for the project.

Tasman houses its core shack in an industrial unit in Gränna, recently upgraded from its original location in an old barn on the Norra Kärr site, and we were able to see a wide range of drill-core samples. At the time of our visit, 50 drill holes had been completed, though additional phases of drilling since then have been finalized. Costs were around $85-100 / m drilled, all in, including personnel and rig hire. Mr. Saxon indicated that coarser pegmatitic materials at the center of the property contained higher grades of TREOs, with heavy REO (HREO) numbers around 40-50% of TREO. As one moves towards the edges of the deposit, the TREO reduces slowly but the HREO percentage increases, making it a challenge to determine appropriate cut-off grades for resource estimates, and subsequent cost estimates for producing concentrates. Some of the holes in the drilling campaigns have intersected mineralization over 250 m or more. Additional drilling in the spring of 2011 was geared towards increasing the size of the resource estimate, with down-dip drilling, and to increase confidence in the data by completing in-fill drilling. Further drilling campaigns subsequent my visit has also been geared towards these aims. Note that despite its Nordic location, drilling is possible all year round at this location. As of the time of writing, I am informed that approximately 75 holes have now been drilled, totaling in excess of 13,000 m.

Mr. Saxon said that some non-ore minerals in the host rock also dissolved in the sulphuric acid used to process the eudialyte and catapleiite. Finding a way to avoid such dissolution would be highly beneficial for acid consumption and cost. The recent update provided by Tasman on their processing methods highlighted the use of magnetic separation and flotation in beneficiation, with initial work recovering around 90% of the REEs and over 60% of the Zr present, in a much reduced rock mass. Being able to reduce the presence of nepheline in this way, has greatly reduced acid usage in the processing.

When I asked about the infamous ‘silica gel’ problem (where the processing of silicate-based materials can potentially lead to the ‘gumming up’ of processes due to the formation of a gel), Mr. Saxon indicated that to date, they had not encountered such problems in their leach tests. Tasman had previously utilized the services of the late Les Heymann to advise on processing methods, and using Mr. Heymann’s knowledge, of the 13 tests conducted, 11 had no silica gel issues. This was achieved by carefully managing the chemistry of the acid solution in which the minerals were dissolved. Mr. Saxon noted that the aforementioned leach testing occurs at room temperature, using sulphuric acid.

During the first evening of the field trip, Tasman gave the group additional presentations on the company, the project and its history. Mr. Saxon kicked things off with an overview of the history of the project. The “muddy paddock in Sweden” was acquired in 2009 by a precursor company to Tasman. Norra Kärr had been first discovered in 1906, and is well known to local mineral collectors. Swedish mining company Boliden AB held the property for a number of years, having an interest in Zr and possible hafnium (Hf) occurences. The project was relinquished in 2001, with the project data only being made available in 2009, via a database put together by the Swedish Geological Survey for all projects. It was soon after that, that Tasman’s predecessor claimed the land

Due to previous exploration only being for Zr, Norra Kärr was not previously known as an REE occurrence; it did not feature in the US Geological Survey database, for example, which is perhaps surprising given the prior history of rare earths in Sweden. Tasman had first-mover advantage in Sweden and in Scandinavia in general; since acquisition, Mr. Leijd has led the efforts to date, to get the deposit drilled and characterized. Other projects, such as the newly announced (at the time of the field trip) acquisition of the Olserum deposit, are also being explored and characterized.

Mr. Saxon said that the company could live with setting the value of Ce and La present at Norra Kärr to $0-1/kg, focusing primarily on the Y and Dy present only, given their significant in-situ grades (though of course only a competed PEA or Pre-Feasibility Study (PFS) will be able to figure out if that is the case or not). He said that production of Dy, Y and Zr could constitute up to 80% of revenues for the project. Mr. Saxon also re-iterated the point that the deposit had by far the lowest Th content of any defined resource. When I asked if there was a particular reason for the low occurrences, Mr. Leijd commented that there were no obvious geological reasons. There may have been higher levels of Th and U present in a previously eroded part of the deposit; unusually, the intrusion itself frequently contained lower concentrations of Th and U than the surroundings.

In the past couple of years the European Union (EU) has been increasingly focused on issues concerning strategic materials, including the REEs, and in that context, Mr. Saxon said that Norra Kärr is seen within the EU as a strategic asset. Later in the evening the group heard an interesting presentation from Jaakko Kooroshy, of Chatham House, on the EU perspective on minerals, mining and related matters.

Mr. Saxon pointed out that Sweden has a population of only 9 million people, with a very well developed mining industry. What was not so well known is the fact that 90% of mining production is conducted by Swedish companies (in contrast to other countries and jurisdictions). While the general cost of living in Sweden may be higher than in other jurisdictions, corporate tax rates were relatively lower. In addition, the cost of doing drilling work, and the ability to house people in local towns and villages means that overhead is much lower than other projects, with no need for helicopters, mining camps and the like. I asked Mr. Saxon what the royalty rates were on mining; he said that they were 0.25%, with 0.2% going to the land owner, and 0.05% to the government.

Mr. Saxon commented that they had been in discussions with several different groups in Europe in regards to separation of concentrates. Given the proximity, he said that it was sensible to be talking to such entities, and that the company might consider setting up facilities in a country like Germany, to get ready access to chemicals and reagents. With a rail line some 10 miles away, Mr. Saxon said that mined materials could be transported via rail to appropriate locations for subsequent processing. There are no plans for Tasman to do its own solvent extraction (i.e. separation of concentrates into individual oxides). Given the relatively low concentrations, all processing would need to factor in ease of transportation and associated costs.

At the time of my visit, Tasman had not yet received final confirmation of their dual listing on the NYSE:AMEX exchange, but has subsequently done so. Per Mr. Saxon, the desire to make this move was a reflection of the 8,000+ US-based shareholders that Tasman has, and the need to support them.

Dr. Holmström shared some comments on the permitting process for Norra Kärr. He said that Tasman had started the process ahead of the PEA in order to accelerate the timeline. Such matters are regulated by Sweden’s Minerals Act, local and regional environmental codes and other aspects of land use, waste and water management, some of which involve the application of EU legislation. So far, Dr. Holmström said, all of the local municipalities and counties had been positive about the project, in initial discussions.

Interestingly, according to Dr. Holmström there are no guidelines for concentration levels of waste products in air and water, in the Swedish regulations, unlike in other jurisdictions. It was up to the individual operators to show that their processes would have minimal impact on the environment, during permitting. Such work might include, for example, leach tests to simulate the effects of rainfall on a tailings dump.

Dr. Holmström said that they had already commenced the process of obtaining information that can be used in the application for an exploitation concession, simultaneous to applications for environmental permits. He said that the Mineral Act was biased in favor of the mining companies, to encourage the exploitation of natural resources, to the benefit of Sweden. This has led to some conflicts in the north of Sweden, were groups of the indigenous Saami people live and work, engaging in traditional activities such as the management of herds of reindeer. The Saami are increasingly facing the prospect of mineral projects on their traditional lands. Since there are no such groups in the southern part of Sweden, this will not arise for the Norra Kärr project.

Exploitation concessions are valid for definite areas, decided on the basis of the extent of a given deposit. They are granted for 25 years, with 10-year extensions possible, if exploitation is in progress at the time. Dr. Holmström said that there was a special supreme court in Sweden for environmental issues, and five regional courts. When I asked if local politicians can influence the permitting process, Dr. Holmström chuckled, saying that the courts are very independent, and do not take kindly to such attempts at influencing outcomes. That said, legitimate ways to accelerate the overall process included enhanced stakeholder involvement, using high-quality, detailed studies, and discussions with local county and municipality administration boards.

Tasman personnel also gave an overview of the newly acquired Olserum deposit, not far from Norra Kärr. Potential REE potential for this property was identified in 1990; the property itself has previously been subject to small-scale iron-ore mining since the 17th Century. In 2003, the property was claimed by the Swedish junior IGE, who identified HREE-rich minerals in 2004-2005, following 27 diamond drill holes. In March 2006, IGE released figures of 2.5 Mt in resources, @ a grade of 0.8% TREO, and 33% HREOs, although the resource estimate were not NI-43-101- or JORC-compliant. Additional work by a subsequent owner confirmed the presence of REEs at the project, and Tasman acquired the project in October 2011 for 37,746 fully paid shares of Tasman stock. An NI-43-101 compliant resource estimated is slated for H1 2012.

We also heard some information on Tasman’s other projects in Scandinavia, including Otanmäki and Korsnas in Finland. In addition, we heard from Stefan Sädblom, an exploration geologist and project manager with Bergskraft Bergslagen, a “project for the development of mining and associated enviromental work” in the Bergslagen region of Sweden, in which Norra Kärr is partially located.

I was most impressed with the Norra Kärr project, and the pragmatic approach that the Tasman team is taking towards its development. Certainly there will be questions about the viability of the material grade in the resource, but the distribution of HREOs, initial metallurgical results and location (location, location) make this a project most definitely one to watch. I am particularly interested to see how the focus on a handful of critical elements as the basis for project viability will fare, following the completion of the PEA and PFS. If successful, this would be a new approach to the issue of dealing with the problem of balance – namely the fact that in order to get at the ‘good stuff’ such as the CREOs, you also need to deal with a potential surplus of non-CREOs such as oxides of La and Ce.

My thanks go to Mark Saxon and his colleagues at Tasman Metals Ltd, for facilitating my visit to Norra Kärr.

Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of, nor a consultant to, Tasman Metals Ltd. (Tasman). Neither he nor Technology Metals Research, LLC received compensation from Tasman or from anyone else, in return for the writing of this article.

In 1984, the magnetic-materials research community in Europe was at a formidable crossroads. The latter part of 1983 had seen industrial research groups in the USA and Japan, simultaneously announce the discovery of a promising new permanent-magnet material, based on the neodymium-iron-boron [Nd-Fe-B] alloy system. This long-sought successor to the evermore-expensive samarium-cobalt magnet materials, had been discovered via not one, but two different processing routes. For all intents and purposes, the Europeans were left out in the cold. Their colleagues in the USA and Japan had pulled ahead in the pursuit and it was unclear as to what the Europeans should do next.

It could have gone either way; but what did happen next, is in my mind a fascinating case study on the value of scientific collaboration in the absence of a profit motive, combined with a remarkable leap of faith, to successfully overcome political, geographic, cultural and scientific challenges.

Late in 1984, the Concerted European Action on Magnets [CEAM] was born at a meeting in Brussels, the result of a unique coming together of the leaders of five European academic laboratories. This was a time before the fall of the Berlin Wall, before the Single European Act and before the European Union. It was a time when the bureaucrats of Europe were trying to find ways to help member countries work more closely together, as part of efforts to reduce mistrust and to achieve the objective of a more integrated, pan-European economic system. This is a system that today most Europeans simply take for granted, but at the time, it was far from clear as to whether or not it would, or could, be achieved.

By the end of its remarkable eight-year run, CEAM eventually produced over 1,000 research papers and well over a dozen patents as a result of the research of over 150 scientists, engineers and product designers, from 93 participating laboratories in 13 countries. Crucially, CEAM produced enduring relationships and collaborative efforts among key research groups within Europe, who to this day continue to work together in areas of magnetics research. Just as important, CEAM enabled the creation of a new generation of research scientists and engineers, whose Ph.D. studentships and activities were made possible in whole or in part by CEAM.

I put it to you that the CEAM approach is potentially an effective model for the creation of a framework for reviving rare-earths research and development, and the subsequent “incubation” of new technical talent for this sector, in the USA, Canada, Europe and beyond. It is imperative that the Western rare-earths supply chain [such as it exists today] realizes that its constituent members are part of a single international “ecosystem”, and that the most effective way to challenge the People’s Republic of China in this area, is to work together within a framework NOT motivated strictly by profit or limited by national borders.

To learn more about CEAM, why it was so successful, and the six steps that could be taken to apply the CEAM model to the revival of rare earths research and development in the West, you can download a copy of my new paper on the subject: “The Concerted European Action on Magnets: A Model for Facing the Rare-Earths Challenge?” in PDF format.

Take a read, and let me know what you think.

On November 4, 2008, the European Commission issued a press released entitled “European Commission proposes new strategy to address E.U. critical needs for raw materials.” The press release title and summary says it all:

European Commission proposes new strategy to address E.U. critical needs for raw materials

“Raw materials are an essential part of both high tech products and every-day consumer products. European industry needs fair access to raw materials both from within and outside the E.U . For certain high tech metals, the E.U. has a high import dependency and access to these raw materials is getting increasingly difficult. Many resource-rich countries are applying protectionist measures that stop or slow down the export of raw materials to Europe in order to help their downstream industries. Many European producers suffer from such practices. On top of this, some emerging countries are becoming very active in resource-rich countries, particularly in Africa, with the aim of securing a privileged access to raw materials. If Europe does not act now, European industry is put at a competitive disadvantage. In response to this challenge, the European Commission launched today a new integrated strategy which sets out targeted measures to secure and improve the access to raw materials for E.U. industry.”

The European Union has recognized the accelerating growth of Chinese resource hegemony and the impact that this Chinese agenda will have on the future of local industrialization in a global economy. The E.U. has started on a path already adopted by the more farseeing governments of Japan, Korea, and India, for example, to preserve their domestic economies in a diversified enough configuration to maintain self-sufficiency. The E.U., unlike the U.S., recognizes that once a powerful economic competitor dominates a critical material, it also dominates the choices of where that material goes and the choice of where the industry based on that raw material is located. The E.U. also recognizes that economically powerful, and independent, nation states are in the long run only those that are self-sufficient.

I view China as a nation that openly operates on a long-term, national strategic agenda as prescribed by Marxist philosophy. China manifests its policies in an openly published successions of five-year plans, the implementation and success of which are China’s government’s measure of its own success in moving forward to first a socialist and then a communist society.

America’s short-term thinking elites, interested only in instant gratification, are divided into two equally myopic groups. There are those who think that a society with no national economic goals other than an arithmetically defined “growth” with a lightly regulated economy— which is as close as reasonable to a free market economy—is best. And, supposedly in contrast, there are those who think that government’s purpose is to level incomes for everyone but the elites. To accomplish this goal of “fairness for everyone else” the national government must be involved in as much of the economy as possible—through detailed regulation and micro-managerial control of all aspects.

Historically we called the first group “Republicans” and the second group “Democrats.” The second group’s stated purpose is always to improve the environment or save the middle class from exploitation by the greedy elites—of course the latter are always others—or some such fair-and-balanced treatment agenda. It has now become very difficult to distinguish between these two groups of elites.

I do not think that America’s hereditary House of Representatives or House of Lards, the Senate, actually can understand how the Chinese system of self-interested government could be an economic threat to their life styles. In their fantasy world, all global economic agendas are created and led by the American economy. It’s an America comprising only 4% of the world’s population, that today creates over 30% of the world’s annual wealth. The Senators seem to fail to notice that these numbers were 2 ½% and 40% in the last quarter of the 20th century.

Astoundingly, the Europeans have figured out what has eluded the American governmental and Wall Street elites: that we are on the cusp of a transition to a world where other nations, or groups of them, also set economic agendas for the entire world. These agendas do not include the United States remaining as the leader forever.

Europe has recognized the urgency of one of the most dangerous current global trends, one which is almost totally ignored by the U.S. The E.U. is moving towards avoiding the consequences for itself, of a foreign hegemony over natural resources. Europe is acting in its own self interest to preserve its diversity of its industry. The U.S. has acted against its own self interest in the same matter and has already lost its industrial diversification.

U.S. production of automobiles and trucks is done by the highest-paid, most highly-benefitted group of workers the world has ever seen. So, before you decide whether or not U.S. taxpayers should subsidize carmaking, note that Japanese-,  Korean- and German-owned and operated car makers build their products profitably in the U.S. In doing, so they pay their workers excellent wages, provide good benefits, pay property taxes in many American cities and states, employ American construction companies and contractors to build and maintain their plants, generate thousands of thriving small businesses in the form of product dealerships. Only then do they repatriate after-tax profits from their operations. No American owned-and-operated car maker has done any one of those things for the last five years or more.

Every dollar of profit made by GM in the Chinese domestic market is reinvested in China to grow the Chinese economy. GM, for example, did not charge its Chinese partners and suppliers one cent for giving them the technological benefit of the tens of billions of dollars of engineering development and the billions of man-hours expended, which had made American mass produced cars among the best in the world. Chinese industry saved huge sums by not having to develop engineering skills, so the profits were poured back into the Chinese domestic economy–effectively by the short-sighted total misjudgment of GM’s managers, among others. Chinese companies, with the backing of their government and their banks, filled with hard currency, are working day and night to develop the Chinese natural resource industry. And an added goal is to buy control of foreign natural resource production so as to permanently cement Chinese natural resource hegemony.

The Europeans have decided to go on their own to preserve their self sufficiency and independence in access to natural resources. In doing so, they may have fatally weakened America’s chance to do the same thing, that is if and when Washington ever wakes up to the danger of being a supplicant for fuel, minerals, and metals.

The Chinese have to simply look on in total disbelief as Washington moves to subsidize the Volt Dolts in Detroit and hand the future of supplying a global economy, with heavy industrial and high tech goods, to a contest among a late-starting European Union, India, and China.

Perhaps the most unbelievable part of American myopia can be found in the four metals that the European Union chose to name in its press release as representative of the 40 metals it is classifying as critical:

• Lithium;
• Tantalum;
• Cobalt; and
• Antimony.

Each of these could be—and has been—mined in North America in quantities such that the U.S., Canada, and Mexico—the NAFTA alliance—could be self-sufficient or competitive. Yet today the U.S. is wholly dependent on foreign sources for tantalum, 86% for antimony, 78% for cobalt, and the USGS does not list lithium as one of the selected imports to monitor in its annual survey! Both tantalum and cobalt in fact are smuggled from the Democratic Republic of the Congo. mainly to China. where electronic devices, magnets, and cutting tools, for example are made for export to the U.S. where “concerned environmental activists’ get to enjoy the fruits of child labor and slavery while they give and listen to speeches about the evils of mining in the American West.

Europe is coming awake. America slumbers on in hypocrisy and utterly criminal disregard of the consequences of misguided environmentalism for the future economic security of the U.S.

America has not passed the buck it has passed the torch.