Monday 12th November 2018

Resource Clips


Posts tagged ‘REE’

Depending on the enemy

October 10th, 2018

The U.S. calls for new supply strategies to meet economic and defence risks

by Greg Klein

The goal might be summed up by a new slogan: Make America Self-Reliant Again. Or, with a tad less concision: Let’s Stop Relying on an Economic Rival that’s a Potential Military Threat for the Stuff We Need to Compete with an Economic Rival that’s a Potential Military Threat.

A newly released study from the U.S. Secretary of Defense illustrates that absurd dilemma. The dependency runs the gamut from sourcing raw materials to refining them, manufacturing key components, developing R&D, training workers, even setting prices. As the report says, “The central challenge to U.S. prosperity and security is the reemergence of long-term, strategic competition by what the National Security Strategy classifies as revisionist powers. It is increasingly clear that China and Russia want to shape a world consistent with their authoritarian model—gaining veto authority over other nations’ economic, diplomatic, and security decisions.”

The U.S. calls for new supply chain strategies to meet economic and defence risks

But Russia merits little mention in the 146-page document. China comes up again and again as the pre-eminent economic and military threat with a long-term hegemonic strategy.

That strategy’s been very successful, leaving the U.S. sorely unprepared for the resulting risks. Ordered by President Donald Trump in July 2017, the report urges a government-wide program to address the entire range of supply chain challenges.

The 2010 Senkaku incident, dramatic as it was, can be seen as a mere microcosm of a much bigger threat.

“China’s domination of the rare earth element market illustrates the potentially dangerous interaction between Chinese economic aggression guided by its strategic industrial policies and vulnerabilities and gaps in America’s manufacturing and defense industrial base,” the report warns. “China has strategically flooded the global market with rare earths at subsidized prices, driven out competitors, and deterred new market entrants. When China needs to flex its soft power muscles by embargoing rare earths, it does not hesitate, as Japan learned in a 2010 maritime dispute.”

It was a lesson learned by other countries too. The report describes rare earths as “critical elements used across many of the major weapons systems the U.S. relies on for national security, including lasers, radar, sonar, night vision systems, missile guidance, jet engines, and even alloys for armored vehicles.”

Rare earths figure prominently in the U.S. list of 35 critical minerals drafted last February and confirmed in May. American dependency was further highlighted when the country dropped rare earths from a revised list of tariffs on Chinese imports announced in September.

China’s soft power hardball has targeted other American allies as well, waging “aggressive economic warfare” against South Korea after the country installed an American air defence system. Other examples of “economic coercion” include “a ban on Philippine bananas over territorial disputes in the South China Sea; the aforementioned restriction of rare earth exports to Japan following the Senkaku Islands dispute in 2010; persistent economic intimidation against Taiwan; and the recent ceding of a Sri Lankan port.”

China can play nice too. But at a price. The country invests heavily in developing countries, often building infrastructure “in exchange for an encumbrance on their natural resources and access to their markets.”

As for Chinese electronics exports, they “lack the level of scrutiny placed on U.S. manufacturers, driving lower yields and higher rates of failures in downstream production, and raising the risk of ‘Trojan’ chips and viruses infiltrating U.S. defense systems.”

Technological expertise becomes a strategic weapon too. “As part of its industrial policy aggression, China has forced many American companies to offshore their R&D in exchange for access to the Chinese market.”

With an advanced-stage rare earths project in northern Quebec as well as advanced-stage tantalum-niobium in southern British Columbia, Commerce Resources TSXV:CCE president Chris Grove keeps tabs on Canada’s neighbour. “People in Washington tell me the anxiety level on these issues has never been higher,” he notes.

Here’s the world’s biggest military and they’re saying, ‘We need Chinese stuff to make it all work?’ That’s really for most Americans an absolutely untenable and unbelievable position of weakness.—Chris Grove,
president of Commerce Resources

“Apart from the trade imbalance between the U.S. and China, there’s the vulnerability of the U.S. military. Here’s the world’s biggest military and they’re saying, ‘We need Chinese stuff to make it all work?’ That’s really for most Americans an absolutely untenable and unbelievable position of weakness.”

Sources in Washington encouraged Grove to apply for a research grant from the U.S. Defense Logistics Agency. If successful, the application would bring up to $3 million to further metallurgical progress on his company’s Ashram rare earths project, advancing a potential source in a stable and allied country.

That would complement one of the report’s key recommendations, to “diversify away from complete dependency on sources of supply in politically unstable countries who may cut off U.S. access; diversification strategies may include re-engineering, expanded use of the National Defense Stockpile program, or qualification of new suppliers.”

Other recommendations include creating an industrial policy that supports national security, working with allies and partners on industrial development, expanding industrial investment, addressing manufacturing and industrial risk within the energy and nuclear sectors, encouraging home-grown scientific expertise and occupational skills, and exploring next generation technology for future threats.

In ordering the study, Trump stated the loss of key companies, over 60,000 American factories and almost five million manufacturing jobs since 2000 “threatens to undermine the capacity and capabilities of United States manufacturers to meet national defense requirements and raises concerns about the health of the manufacturing and defense industrial base.”

Digital addictions reach new dimensions in British Columbia

September 27th, 2018

by Greg Klein | September 27, 2018

Maybe this represents a distinctly West Coast weirdness inapplicable to the real world. If not and the trend grows, however, the engagement diamond trade looks doomed, as does procreation. But while waiting for our species to die out, we should be heartened by increased demand for rare earths, tantalum and other necessities of the electronic age.

Digital addictions reach new dimensions in British Columbia

B.C. has long been liberal on issues of sexual preference.

A BC Hydro study found its customers devote an average of 4.7 hours a day, 33 hours a week and 132 hours a month—about a third of their waking time—with the electronic love of their lives, smartphones and tablets. So strong is the passion for smartphones that it can take precedence over human relationships.

“Over a quarter of British Columbians aged 25 to 54 would rather give up seeing their spouse or partner for a day than give up their smartphone or tablet for 24 hours,” the provincial utility reports. “This jumps to one-third for those aged 55 to 64.”

Nor does the preference preclude intimacy. “One-fifth of British Columbians admit to sleeping with their smartphone in bed—and 70% of those aged 18 to 24 at least occasionally sleep with their device.”

Not surprisingly, then, nearly a third of the province between 18 and 24 would give up home heating on a cold winter day rather than their smartphone. Same thing for a day’s pay in the 18-to-34 age bracket.

Maybe most startling of all, “two-thirds of British Columbians would be willing to forgo their morning coffee for two days than their smartphone or tablet for the same time frame.”

Although the BC Hydro report focuses on the implications of electronic devices for electricity consumption, there’s no mention of even greater demand from electric vehicles.

A separate subject, of course, concerns supply of the materials that make up electronic devices. Last year the U.S. Geological Survey broke down the smartphone’s ingredients to demonstrate society’s dependency on wide-ranging and often insecure supply chains. Among them are rare earths from China and tantalum from Rwanda and the Democratic Republic of Congo, both sources of conflict metals. Heightened supply concern has brought an increasing American government focus on critical minerals, while the potential effects of a U.S.-China trade war threaten to exacerbate the situation.

Saville Resources mobilizes for niobium-tantalum field work in northern Quebec

September 25th, 2018

by Greg Klein | September 25, 2018

Encouraging assays and heightening concern for critical minerals bring an exploration team back to Saville Resources’ (TSXV:SRE) Niobium claim group in Quebec’s Labrador Trough region. The program follows earlier drilling as well as more recent niobium-tantalum boulder samples that reached as high as 4.3% Nb2O5 and 700 ppm Ta2O5. With work carried out by Dahrouge Geological Consulting, the autumn agenda calls for prospecting and ground geophysics to identify future drill targets.

Saville Resources mobilizes for niobium-tantalum field work in northern Quebec

A view from a ridge on Saville Resources’ Niobium claim
group, now progressing towards an updated geological model.

The 1,223-hectare project sits on the Eldor property which also hosts Commerce Resources’ (TSXV:CCE) Ashram rare earths deposit, now moving towards pre-feasibility. Under an agreement with Commerce, Saville may earn 75% of the Niobium claim group. The company has two weeks planned for the current campaign.

A 43-101 technical report filed earlier this month “concludes there is a ‘strong potential for carbonatite-hosted niobium-tantalum deposit(s) of significance’,” noted president Mike Hodge. “Discoveries start with boots on the ground and we look forward to following this work up with an aggressive and targeted drill campaign to further unlock this potential.”

Among places slated for ground magnetics is the Southeast area, where mineralization is often associated with magnetite. Prospecting will focus on relatively untouched areas but also the vicinity of drill programs dating to 2008 and 2010. Hole EC10-033 returned 0.72% Nb2O5 and 145 ppm Ta2O5 over 21.35 metres, starting just below overburden at 4.22 metres’ depth. The same hole also delivered 0.82% Nb2O5 over 21.89 metres starting at 58.9 metres.

The shallow intersections “indicate that strong mineralization extends to surface in the immediate area,” the company stated. “In terms of ground follow-up, there is a sizable corridor to the south of EC10-033 that has not been traversed and is therefore a high-priority area for assessment.”

Results from the program will help update the Southeast area’s geological model, which currently dates to 2010 despite an improved understanding of the Eldor complex. A partial photo re-log of the core, a revised rock classification scheme, geophysical results and other data will delineate future drill targets.

Reporting from Quebec’s James Bay region last month, Saville announced a new zinc-silver-nickel zone at surface on the company’s Covette property. Sampling took place along an area hosting strong magnetic anomalies and several EM conductors, with one sample grading 1.2% zinc and 68.7 g/t silver, and three others ranging from 0.13% to 0.19% nickel.

Also last month Saville closed an $877,700 first tranche of a private placement offered in July up to $2 million.

Read more about Saville Resources.

Commerce Resources president Chris Grove comments as the Quebec rare earths project makes additional metallurgical progress

August 29th, 2018

…Read more

Commerce Resources’ rare earths metallurgy moves forward amid heightened supply concerns

August 20th, 2018

by Greg Klein | August 20, 2018

In an update on tests conducted by l’Université Laval, Commerce Resources TSXV:CCE reports another stage of progress with completion of crushing, grinding and large-scale flotation. About 1.5 tonnes of material were processed from the company’s Ashram deposit in northern Quebec, now moving towards pre-feasibility. With results meeting expectations, the project advances to a pilot-level hydrometallurgical component.

Commerce Resources’ rare earths metallurgy moves forward amid heightened concern for RE supply

Last month Commerce announced an important milestone in producing Ashram’s first concentrate of mixed rare earth oxides, showing the deposit’s amenability to different flowsheet approaches.

Laval’s next stage will use flotation concentrate to produce a purified solution containing rare earth elements, which will then be separated into light, medium and heavy rare earths. At the same time, the solution composition will be used to assess a solvent extraction separation pilot circuit using a software model simulator developed by the university. Results will allow further assessment of the economics of separating Ashram’s REEs into individual rare earth oxides.

Funding for the project comes through a $365,000 grant from Quebec’s ministère de l’Économie, de la Science et de l’Innovation.

As work continues, geopolitical developments bring increasing concern about rare earths supply. Trade hostilities between the U.S. and China have led to speculation about how the latter country, by far the world’s biggest rare earths producer, will use its resources as a weapon.

This year the U.S. included rare earths in a list of 35 minerals deemed essential to the country’s economy and defence, as part of a strategy to encourage production of critical minerals at home and among allied countries.

The list also includes tantalum and niobium, which Commerce has delineated at its advanced-stage Blue River project in east-central British Columbia. Back in Quebec, a few kilometres from Ashram, the company also holds an early-stage high-grade niobium project that’s conditionally subject to a 75% earn-in by Saville Resources TSXV:SRE.

Read more about Commerce Resources.

Commerce Resources reaches key milestone with mixed rare earths concentrate from Quebec

July 24th, 2018

by Greg Klein | July 24, 2018

Ongoing metallurgical work at l’Université Laval has so far accomplished a number of goals while helping Commerce Resources’ (TSXV:CCE) Ashram deposit move towards pre-feasibility. Researchers found success in their primary task of validating new software for REE separation but met other goals as well.

Commerce Resources reaches key milestone with mixed rare earths concentrate from Quebec

“The rapid progress of this collaboration now includes the first-ever mixed rare earth oxide concentrate produced from Ashram deposit material,” said Commerce president Chris Grove. “This is a key milestone for the advancement of the project. This test work has demonstrated again the versatility of the Ashram deposit to be processed by a number of different flowsheet approaches.”

Laval’s team achieved bench scale production of mixed light rare earths oxide and mixed LRE/samarium, gadolinium and europium/heavy rare earths oxide.

Previous work produced over 45% rare earths oxide, among the highest-grade concentrates for RE development projects and comparing favourably with operating mines, Commerce reported. “This is a direct result of the simple rare earth and gangue mineralogy of the Ashram deposit…. This versatility in processing approaches lends itself to more cost-effective methods to be incorporated into the final flowsheet to achieve the same products and quality desired.”

Laval achieved recovery rates of 60% to 65% for several light rare earths, while modifications are anticipated to bring further improvement.

The work also validated the university’s software, as results closely matched the simulator’s predictions. Using another 1.5 tonnes of Ashram material, the lab team will conduct tests at the larger pilot scale level, comparing its results with those of the simulator and further assessing the economics of REE separation into individual rare earth oxides.

The software is intended to reduce processing delays and costs, as well as predict results for processing changes. The software might also determine process optimization that considers current REE prices.

The studies get financial support through a $365,000 grant from Quebec’s ministère de l’Économie, de la Science et de l’Innovation.

Last month Commerce reported positive results from advanced tailings optimization tests conducted by a branch of l’Université du Québec. Additional provincial funding supports that research. The company also received government support from a $1-million investment by Ressources Québec last year.

The Commerce portfolio also includes the advanced-stage Blue River tantalum-niobium project in British Columbia and, a few kilometres from Ashram, an early-stage high-grade niobium project that’s conditionally subject to a 75% earn-in by Saville Resources TSXV:SRE.

Read more about Commerce Resources.

Senkaku II

July 23rd, 2018

How might a U.S.-China trade war affect rare earths?

 

At first glance, the rare earths aspect of the U.S.-China tariffs tussle looks like small change—a proposed 10% duty on American RE imports that might cause a smallish markup on some manufactured goods and wouldn’t necessarily apply to defence uses. But all that’s part of a much bigger battle that will probably target $250 billion of Chinese exports to the U.S. China used an incomparably smaller incident in 2010 to rationalize a ruthless sequence of rare earths trade machinations. Could something like that happen again, this time with different results?

How might a U.S.-China trade war affect rare earths?

Hostilities began earlier this month as the U.S. imposed a 25% tariff on approximately $34 billion worth of Chinese imports, with levies on another $16 billion likely to come. China retaliated with tariffs on equal amounts of American imports.

The U.S. re-retaliated with a threatened 10% on an additional $200 billion of Chinese imports in a process that would follow public consultation. The additional list includes rare earth metals along with yttrium and scandium, which are often considered REs but rate distinct categories in this case.

Last year the U.S. imported $150 million worth of 15 RE metals and compounds, up from $118 million the previous year, according to the U.S. Geological Survey. Some 78% came directly from China, with much of the rest derived from Chinese-produced concentrates. Yttrium shows a similar story, with 71% coming directly from China and nearly all the rest from Chinese concentrates. Although lacking hard numbers for scandium, the USGS states that too comes mostly from China.

Globally, China produced over 80% of world RE supply last year, but with less than 37% of the planet’s reserves.

Rare earths plus scandium comprise two of 35 mineral categories pronounced critical to the American economy and defence by Washington last May, after Donald Trump called for a “federal strategy to ensure secure and reliable supplies of critical minerals.” Now the same administration wants to slap those commodities with a 10% price hike.

And at risk of provoking powerful Chinese retaliation.

Rare earths watchers will remember the 2010 confrontation around the disputed South China Sea islands of Senkaku. The Japanese navy arrested a Chinese fishing crew captain who had twice rammed his boat against the military vessel. Within days, China banned all rare earths exports to Japan, crippling its globally important but RE-dependent manufacturers. China also imposed heavy cutbacks and duties on exports to other countries.

While some Western manufacturers relocated to China, Western resource companies strove to develop alternative supplies. Lynas Corp’s Mount Veld project in Western Australia and Molycorp’s Mountain Pass project in California both reached production in 2013. The following year the U.S. claimed victory as the World Trade Organization ordered China to drop its export restrictions on rare earths, as well as tungsten and molybdenum.

China complied with a vengeance, flooding the world with cheap RE supply. America’s WTO victory proved Pyrrhic as a burgeoning non-Chinese supply chain failed to compete. The most salient casualty was Mountain Pass, which went on care and maintenance in 2015.

So does China have more rare earths machinations in mind, this time responding not to a minor territorial dispute but tariffs affecting $250 billion of Chinese exports?

Maybe, but different circumstances might bring a different outcome. Since the Senkaku-induced RE crisis, advanced-stage projects have developed potential mines outside China. Work has progressed on non-Chinese supply chains, working to eliminate that country’s near-monopoly on processing expertise. Most recently, the U.S. has begun an official critical minerals policy to encourage development of supplies and supply chains in domestic and allied sources.

Of course any future scenario remains speculative. But this time the West might be better prepared for China’s tactics. Any new export restrictions might spur development of the deposits that now exist outside China. Any Chinese attempts to dump cheap supply could face further, far more punishing tariffs. While some other industries might suffer in the shorter term, Western resource companies might welcome Senkaku II.

Saville Resources closes Quebec nickel-copper-cobalt acquisition, files 43-101, readies summer program

June 26th, 2018

by Greg Klein | June 26, 2018

An undrilled property with encouraging geophysical results will undergo a summer field program, now that Saville Resources TSXV:SRE has finalized its acquisition of the James Bay-region Covette project. A 1,402-line VTEM survey from 2016 outlined at least six areas of high conductivity on the 3,315-hectare property, with one zone extending southeast about 4.5 kilometres and another trending northeast. Those areas “need to be evaluated,” stated a 43-101 technical report filed this month.

Saville Resources closes Quebec nickel-copper-cobalt acquisition, files 43-101, readies summer program

A pegmatite ridge on Saville Resources’ Covette
project, which now has Phase I field work planned.

Sampling conducted last year showed 0.18% nickel, 0.09% copper and 87 ppm cobalt, but the field program wasn’t sufficient to explain the source of the VTEM anomalies, which may indicate a source at depth, the company stated.

An historic, non-43-101 sample assayed 4.7% molybdenum, 0.73% bismuth, 0.09% lead and 6 g/t silver. Another brought 1.2 g/t silver and 0.18% copper.

A Phase I field program recommended by the technical report would include detailed mapping and sampling in areas of high-conductivity, channel sampling and further geophysics. The project sits about 10 kilometres north of the all-weather Trans-Taiga road and adjacent transmission line.

Meanwhile work continues on another Quebec acquisition as Saville prepares a 43-101 technical report on the Miranna claims, located on the Eldor property that hosts Commerce Resources’ (TSXV:CCE) advanced-stage rare earths deposit. In April the companies reported assays as high as 4.3% Nb2O5 and 700 ppm Ta2O5, results in line with previous high grades. Subject to exchange approval, Saville would acquire a 75% earn-in on Miranna.

Read more about Saville Resources.

Commerce Resources president Chris Grove discusses his company’s Canadian rare earths and tantalum-niobium projects as the U.S. develops a strategy to secure supply

June 22nd, 2018

…Read more

Update: Quebec government, universities contribute to pre-feas studies for Commerce Resources’ Ashram rare earths project

June 5th, 2018

by Greg Klein | Updated June 5, 2018

With financial support from the Quebec government and academic expertise from two universities, Commerce Resources TSXV:CCE announced progress on the pre-feasibility studies underway for the Ashram rare earths deposit.

On June 5 the company reported positive results from advanced tailings optimization tests conducted by le Centre Eau Terre Environnement of l’Institut national de la recherche scientifique, a branch of l’Université du Québec. Now in the second year of a three-year project, the work gets funding from les Fonds de recherche du Québec—Nature et technologies and le ministère de l’Énergie et des Ressources naturelles. The lab work found no serious concerns, no acid generating potential and “strong indications of no metal-leaching potential,” Commerce stated.

The positive outcome benefited from “the inherent low-sulphide and non-acidic nature of the carbonatite host rock,” said company president Chris Grove.

The program also looked at the mineralogy of an Ashram fluorspar concentrate, a potential byproduct of the deposit. Initial findings brought “very encouraging” signs that recovery of monazite grains could upgrade the purity of the fluorspar concentrate and potentially increase the overall recovery of rare earth elements into the primary rare earth concentrate, Commerce added.

The news follows a May 31 annnouncement that l’Université Laval will conduct pilot plant metallurgical tests on Ashram material in a program backed by a $365,000 grant from le ministère de l’Économie, de la Science et de l’Innovation.

Quebec government funds metallurgical studies on Commerce Resources’ rare earths

Laval’s coat of arms: Total funding ranks
the school sixth out of Canada’s top 50
research universities.

Focusing on hydrometallurgical extraction of REEs and the use of new software to simulate their separation, the project will further develop Quebec expertise in REE separation and assess the economics of performing that work in the province. Results would help develop an alternative source of rare earths for global markets.

The work takes place as heightened awareness of critical minerals comes from an American strategy to reduce reliance on potentially unstable or unfriendly countries.

Both the hydromet process and simulator software have been tested in bench scale studies. Results brought recoveries surpassing 85% and showed positive correlation with the computer-simulated data. The current project further develops these studies at the pilot plant level.

With approximately two tonnes of Ashram material to work on, the project takes place at the SGS lab in Quebec City. The goal is to produce a high-grade concentrate, then a solution for partial separation into light, medium and heavy rare earth elements.

Beneficiaries of the project will be Quebec R&D and industry, as well as Commerce’s Ashram deposit as it progresses towards pre-feasibility. Previous government support for Ashram came from Ressources Québec, which invested $1 million in the company’s February 2017 private placement.

Looking at other critical minerals in safe jurisdictions, Commerce also holds the advanced-stage Blue River tantalum-niobium project in British Columbia, as well as an early-stage high-grade niobium prospect, conditionally subject to an earn-in by Saville Resources TSXV:SRE, on the Eldor property that hosts Ashram.

Read more about Commerce Resources.