Comments on: US Department Of Energy Releases Updated Critical Materials Strategy Report

By: Tim Ainsworth

Tim Ainsworth — Fri, 20 Jan 2012 10:27:09 +0000

Gareth,
In regards to Lynas’s Mt Weld resource you seem to be miles ahead of the DoE report in that you appear to have weighted the HREE rich Duncan resource into your total resource numbers to provide an indication of likely REO output from the LAMP Stage 2 in 2013.
In comparison the DoE report, Table 4-2 is just using older CLD numbers to calculate Lynas’s contribution to the anticipated additional REO production 2010/2015. Even using these numbers Lynas makes a very significant contribution across all CREO, more so if you consider that neither Arafura or Alkane currently look like making much of a contribution pre 2015.
However using your TREO% weighted for Duncan the DoE tonnages would roughly increase Eu x 5%, Tb x 100%, Dy x 130% & Y x 280% further emphasising Lynas’s importance as the major producer of CREO thru 2015.
This weeks resource update not just increased the overall Mt Weld resource by 37%, with a slight drop in REO%, but increased the Duncan tonnage to 9MT with nearly all in the Measured or Indicated category. From the Ann: “The Duncan Deposit is a shallow deposit and could easily be exploited using open cut mining methods. Preliminary
metallurgical test-work has begun on the Duncan Deposit to determine if the rare earths, in particular the heavy rare earths , can be economically extracted from the mineralisation. Most of the Duncan Deposit is in the measured and indicated category giving a high level of confidence in
the Resource estimate.” http://www.lynascorp.com/content/upload/files/Announcements/2012/Increase_in_Mt_Weld_Resource_Estimate_1068363.pdf

While subject to the test work I doubt many analysts have considered the economic benefits of an enhanced CREO feedstock from Duncan as early as 2013.

By: kman

kman — Sun, 25 Dec 2011 18:07:39 +0000

Gareth: if the rest of the world were to develop technologies with reduced REE composition would China not come out a winner anyway by being able to offer REE based products which would essentially be of higher quality because of better performance, efficiency, etc? I’ve got to think that the Chinese authorities thought long and hard about their strategy inthe context of a world that desperately needs to reduce its energy demand. As an example the shift towards T5 and T8 flourescents(think phosphors) is just getting going in North America and is about to explode. China and the rest of the world is next.

By: Gareth Hatch

Gareth Hatch — Sat, 24 Dec 2011 18:14:53 +0000

@Milan Arvensis: Thanks – all the best to you and yours too.

@Michael Mitrega: depends on your perspective. If a company publishes estimates of the amount of materials they will process in a year, then the value per unit mass of mineral resource is certainly relevant for the economics. However, most companies talk about the amount of finished product that they plan to produce, in which case the value per unit mass of finished product is, I think, od some relevance.

Neither metric, of course, accounts for the actual cost of production or capital costs, and all the other factors involved in bringing a project online.

As detailed in a prior post ( http://www.barnswood.com/tmr/wp/?p=2726 ), the two metrics are related as follows:

In-ground Value = 10 × Basket Price × Material Grade

By: Michal Mitrega

Michal Mitrega — Sat, 24 Dec 2011 13:16:13 +0000

Hi Gareth

Why is it important to look at unit basket price in TMR Advanced Rare-Earth Projects Index? Isn’t USD/t the only metric that should be used to determine the economics of the project?

Michal

By: Milan Arvensis

Milan Arvensis — Sat, 24 Dec 2011 07:15:51 +0000

Dear Gareth,
I wish you and your family the very best Yuletide Season.
May you all be blessed with health, love and prosperity for 2012!
Thanks for DOE Critical Materials Strategy!
Milan Arvensis

By: Gareth Hatch

Gareth Hatch — Fri, 23 Dec 2011 15:42:21 +0000

@Ruben Estaban: I wouldn’t characterize this as a global strategy; however, there was a meeting / workshop earlier this year between representative of the USA, the EU and Japan, to discuss these issues, and it is possible that we may see some coordination of activity.

By: Ruben Esteban

Ruben Esteban — Fri, 23 Dec 2011 11:31:07 +0000

Hello Gareth: First, thank you very much for your comments. They are very useful. In second place, a questions. Currently, the D.G. Enterprise of the European Union is working in the European Strategy for Raw Materials (Raw Materials Initiative) with focus on strategic and technological materials. It is curious that the DOE and EU is both working in the same direction at the same time. Do you know if there is a global strategy on these materials that the government agencies are based to establish their strategies?. Is there documentation on this? Can it respond to the geopolitical movements that are happening today in Russia regarding the EU, for example? What may be the outlook for the future?
Best Regards.