China in MASSIVE rare earths industry consolidation China is set to consolidate most of its sprawling rare earth industry under government control in a bid to better manage production and clamp down on smuggling and unlicensed players. An Economic Information Daily report claimed that a planned six state-run groups would control the majority of production in a country which is …
Interesting. They know exactly how much illegal stuff was produced, despite the fact that illegal should also be unrecorded.
We can find how much illegal meth was sold during a time period, but I doubt we can know how much was produced.
Not without having an inside line on the meth production industry, that is.
So how do they know how much rare earth was produced illegally ? Are they just totalling the bribes and inferring from there ?
A monopoly is all our electronics industry needs to go up against now.
Fortunately there are many nations around the world with various rare earth ores. Unfortunately the pollution required to do the mining is so monumental that most nations require pollution controls that are not economically feasible.
"Fortunately there are many nations around the world with various rare earth ores. Unfortunately the pollution required to do the mining is so monumental that most nations require pollution controls that are not economically feasible."
The "pollution" mostly comes down to haveing undesirable byproducts - virtually all of that is Thorium - and no place to put them without the stuff leeching into waterways.
Thorium is likely to become very useful within the next 15-20 years if Gen4-5 molten salt nuke reactors take off and you'll likely see those rare earth refinerys rebranded to being thorium producers with a sideline in rare earths.
Canada has rare earth deposits without Thorium - or Uranium - contamination of any note. Wife's dad is senior geo on a project in Blue River (amongst others) where this is well proven.
They have proven there is tantalum down there in large quantities. They have proven that it can be extracted without harming the environment. They have proven that it can be refined without harming the environment. They have even proven that all of this can be done in an economically viable fashion: i.e. they could turn a profit mining this stuff in a manner that meets Canada's (and British Columbia's) ecological guidelines.
Why isn't this up and running? No investors. They are trying hard to drum up enough capital to actually get the mine operational. All the relevant studies are done, impact assessments...everything. The people that own the land just don't have enough money to make the hole...and so far the only people interested in investing seem to be the Chinese.
They are somewhat against making said hole.
This story is repeated over and over across Canadian mining properties. There's a hell of a lot of stock market scam crap with Canadian mining and exploration companies...but there are also a lot of proven, assessed, economically viable mines that just cannot attract enough capital to make the gor'ram hole in the ground.
So i have zero sympathy for any company out there bitching about the cost of rare earths. I can personally introduce you to people who can solve the rare earths issue, if only there's a some up front investment.
Companies like Samsung have had a boo at some of these properties and decided they'd rather just invest their money in developing rare-earths-free technologies. They agreed that it was economically viable, but didn't want to be beholden to any foreigners - Canadian, Chinese or Australian - for access to critical elements.
It's also why I've no sympathy for Worstall's "slavery is okay if I get a cheaper phone because brown people don't value their own lives as much as we value ours" view. We have a perfectly ethical option that wouldn't cost us additional money but: we are choosing as a society not to exercise it. (And what the hell does that say about our society?)
There is no monopoly on rare earths. There's just apathy and abject greed. Electronics companies could solve this problem tomorrow if they wanted. They won't. If it costs $500m to spin up a mine and they see (number pulled from ass) 20% return on investment for that $500M over the next 10 years, they still won't invest. Why? Because they believe that same $500M could be invested in $_other_investment and get 21% return on investment over the next 10 years.
There is an actual profit to be made in digging rare earths out of the ground of a first-world nation and selling them to people in a manner that doesn't impact the environment. The sad truth of the matter, however, is that there isn't enough of a profit to be made, so bloody few people are interested.
Capitalism!
In the last few years, a U.S. outfit called Molycorp has re-opened a mine in California, claiming at the time that RE prices and new processing methods would make it profitable again. I bought a few shares for a pet rock...
I just look in on them occasionally, but they're not burning up the markets. In fact, the stock has lost about 90% of its value in 5 years, whatever that portends.
I'm afraid that there's a problem with this analysis. That being that you almost certainly wouldn't make a profit by mining for rare earths. Because other people have got there first. There's Molycorp, reopened the mine in California. And Lynas with their mine in Oz and processing plant in Malaysia. They're both up and running and production between the two will reach around 40k tonnes a year.
Which is around and about the non-China demand for rare earths anyway.
That sounds like a pretty good reason that people don't want to invest in rare earth mines really.
Quite apart from the fact that there are vastly cheaper places to get them from than by digging another damn hole in the ground. There's large amounts in the wastes from other processes for example: 20,000 tonnes a year in red mud from alumina production alone. And yes, they can be extracted: we've actually done that experiment ourselves. However, with those other people already in the market it's not profitable either....
The problem with your analysis, Tim, is that all your understanding is based on rare earths deposits where there are a great many "undesirable" materials that have to be filtered out and disposed of. (Usually Thorium, Uranium, Mercury, etc.) The particular deposits I am aware of in Canada simply don't have these issues. It's actually quite odd; vast quantities of Tantalum available without much in the way of refining issues? Even China doesn't have that.
Yes, you can pull certain rare earths out from the tailings of other mining operations...but they are tailings for a reason; processing them further produces diminishing returns and increasingly purified Bad Things. That leaves you with ever more expensive leftovers that become increasingly complicated to dispose of.
So while I'm sure your analysis holds for many situations, I promise you it doesn't hold here. In this situation a new hold in the ground would allow you to pull out tantalum and sell it at a profit even if the price of tantalum goes down a fair bit. The only reason it doesn't attract investors is because there is a greater profit to be made elsewhere. But the properties in question here could indeed be exploited profitably, assuming anyone cared enough to do so.
Of course, for you to understand that you would have to actually do some investigation and research regarding the properties in question and not assume that what holds true for one source is true of all. Each hole produces rocks with different chemistry...and that chemistry makes a big difference in how profitable (or not) pulling rocks out will be.
Rare earths extraction simply can be done cheaper here than it can be done elsewhere, except for a few places where murder, torture, maiming rape and slavery are commonplace profit-enhancement methods for getting the goods. Of course, that's just not a big enough deal to anyone to bother with. They're just brown people, who cares, eh?
There are plenty of sources on earth that can produce a reliable source of the metals with a low environmental impact. Australia, California, many of the other Canadian mines, and a few in Europe (that I know of off the top of my head...I'm sure there are more.) Where these specific Canadian properties stand out is that they could produce the materials cheaper than any of the other first-world sources, though not quite as cheaply as blood mineral sources.
To put it bluntly: companies that use rare earths would rather put the same capital to use inventing new ways to not have to use rare earths than invest in new and better ways to get at metals that will only ever have a low number of sources.
If they do so, they can patent the technologies they develop and seek rent on them. They can also use materials that have a far wider number of suppliers around the world than rare earths ever will. It doesn't matter of the replacement technologies are quite as good at the job as rare earths. It doesn't matter if rare earths aren't all that rare and production can be done in a profitable and sustainable way.
What matters is that there are long-term strategic concerns surrounding thwarting others that take precedence. Because Capitalism. Let's all cheer loudly, now. We're making the world a better place!
Two reasons:
1) The replacements for rare earths don't work as efficiently as rare earths.
2) Rare earths aren't all that rare, nor are they particularly expensive to produce, so there's no rational reason to move to a less efficient process.
Oil will run out in short order. Rare earths will go for thousands of years yet.
"In this situation a new hold in the ground would allow you to pull out tantalum and sell it at a profit even if the price of tantalum goes down a fair bit."
Hmm, but. There's two extant tantalum mines that are on a care and maintenance basis at present. Tanco and Sons of Gwalia. OK, at least, last time I looked around this market these two extant mines were there, capable of being operated, and weren't being operated.
Given this people just aren't very interested in the idea of new tantalum mines.
"The only reason it doesn't attract investors is because there is a greater profit to be made elsewhere."
Which sounds like an excellent idea really. There's a limited amount of capital in the world, profit is the measure of how much value is being added by deploying that capital. Thus we *want* people to be deploying their capital where it makes the largest profits.
"Which sounds like an excellent idea really. There's a limited amount of capital in the world, profit is the measure of how much value is being added by deploying that capital. Thus we *want* people to be deploying their capital where it makes the largest profits."
No. That's what sociopaths who only care about profits want.
Human beings capable of emotions like sympathy, compassion, curiosity and wonder want investment to be made where it makes the greatest benefit for the greatest number. Profit generation does not meant he greatest benefit for the greatest number. Profit generation usually means finding regulatory loopholes and dumping externalities onto citizens.
The tantalum mine thing is a great example. The fact that a tantalum mine exists which could extract tantalum doesn't make it equal to the next. There are all sorts of considerations beyond the mere availability of ore. What's in that ore? How does that affect the cost of refining it? Where are you getting your labour (both for extraction and refining) from? What is the environmental impact of extracting and refining the ore? What is the stability of the country, the labour force, the regulatory environment, etc?
These are all factors that have effects on both profit and the ethics of making that profit. Both things - profits and ethics - are very important to those of our species that aren't sociopaths.
Of interest to me also are the two mines you mentioned. Tanco and Sons of Gwalia.
Sons of Gwalia was both a gold mine and a Tantalum mine. The company operating it mad a bunch of really stupid hedges and stock market moves and gold volatility subsequently tanked the property. Demand for tantalum had nothing to do with it: greed and ineptness ensured the downfall of that property independent of any other considerations.
Currently, there are a lot of people trying to get the red tape resolved ASAP and willing to sink a fair amount of money into that mine to get it back up and running. The demand is there for the tantalum it produces. The dog and pony surrounding getting it back up is another story.
Tanco is a completely other issue. The tantalum that comes out of there isn't exactly top quality, nor is the mine set up to be a tantalum mine. Tantalum is an afterthought: the real goal is cesium. The tantalum there has a lot of radioactives and refining it is a bitch and a half. Every gram of refined tantalum coming out of that mine would end up costing about double what the blue river mine would be producing it for.
Tanco is still an operational concern. They just don't feel that hauling tantalite out of the ground at scale and then refining it is worthwhile, given the costs of doing so from that source. Which is - quite frankly - more than fair enough. As mines go, it's an expensive, messy proposition to mine that ore in a safe and environmentally acceptable fashion. To say nothing of the cost of refining. Put bluntly: Canada has a lot better properties for getting Tantalum.
If all we were concerned about was profits then we should just be raping and murdering our way across Africa and using Tantalum from there. It's cheaper than anything any western or eastern mine could produce. For that matter, why don't we just go back to slavery? It's economically efficient. We should jettison environmental regulations and consumer protections...the list goes on.
There's more to it than "the greatest profit." There's obtaining an ethical profit. Ensuring the long term stability of your revenue stream. There are environmental considerations. Labour considerations.
You say "get the most profit possible for your investment." I say "get profit from a stable source that does the least possible amount of damage, even if it isn't the highest profit you could obtain."
Now, admittedly, I'm not a billionaire industrialist so it's easy to argue that my opinion is completely invalid in the context of making money. On the other hand, I'm also not someone running mining/drilling/venture companies into the ground with stock market (or materials market) manipulation schemes...something that seems to be standard operating procedure for the overwhelming majority of companies in the mining industry, including the owners of one of the mines you mentioned. (Sure as as hell stock market scams and manipulations are a very prevalent part of the Canadian minerals scene.)
Thus I come back to my original statement: there's a perfectly good mining property here that could produce all the tantalum anyone could want. It can do it cheaper than any other except the African rape-and-murder mines. It would do far less environmental damage and occurs in a place where the regulatory and labour environment are stable. It just wouldn't produce enough profit, and so it isn't of interest to the very same people screaming loudly that "there isn't enough rare earths availability."
In other words: the greedy sons of bitches screaming about rare earths availability can shut the fuck up. They can have all the rare earths they want as soon as they decide to obtain them. They can even have them at decent prices. Their whinging isn't about availability or even source. It is about their constant desire to increase profits, no matter the human, economic or environmental costs.
I hold those people - and anyone who defends their way of thinking or behaving - in nothing but the absolutely highest of contempt.
Nobody is stopping anyone else from producing rare earth products. It's greed and laziness that has caused this 'problem' in the first place:
Accountant: Oooooh. Digging up is a difficult business. Let's buy it it from China.
Board members. Well I don't know. It has always seemed to work.
Accountant: It will cost less, we can sack all the staff and become a shell company. This means bigger profits, which we will hide offshore. You can have more expensive cars, more 10 star hotel resorts, more hookers and more coke. And in the UK you will probably get a gong for services to industry!
Board members: We agree! You have shown us the way. Give that man a box of cigars.
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