Recharged Particles

Rare Earth Investing News is reporting that Q4 will bring more of the same bleak outlook for Rare Earth Materials.

http://rareearthinvestingnews.com/4840/rare-earth-q4-outlook/?utm_source=Resource+Investing+News&utm_campaign=c0bbf04697-RSS_EMAIL_CAMPAIGN&utm_medium=email

The news is once again sky high prices and tight supply outside China. It comes down to when companies outside China begin producing significant supplies of Rare Earth elements the prognosis remains the same. Production in China for 2011, has been capped at 93,800 Tonnes with exports limited to 30,184 Tonnes, slightly less that 2010.

Outside China, Australia’s Lynas Corporation has opened their Mount Weld mine and their initial target is 11,000 Tonnes of production but won’t effect the market until 2012 with their material being shipped to their Malaysian plant which has not been licensed as yet.

U.S. company Molycorp is currently the only company outside China producing Rare Earth Materials. Their Q1 production is 815 Tonnes per month which they expect to increase by Q4 to 1000 to 1300 Tonnes per month.

It is interesting to note that as reported on this site yesterday that China is shutting down 3 Rare Earth mines by January 1, 2012. These mine closings are expected to impact Chinese exports by 15,000 Tonnes per year and may drive prices higher than current levels.

In addition it has been reported that the European Union is stockpiling rare earth materials in an effort to reduce their dependence on China. There also has  been calls for the U. S. to stockpile rare earth materials as reported on this site on August 31, 2011.

The Toyota Prius requires 2 ob of Neodymium and 20 to 30 lb of Lanthanum for each automobile.

http://www.raremetalblog.com/2011/09/prius-for-china-market-opportunity-combined-with-ree-needs.html

Now due to the problem of obtaining Rare Earth materials Toyota has planned to expand to build manufacturing of some components in China.

In addition, Toyota wants to increase sales of their Prius model in China and has determined that it makes sense to manufacture some components there. Therefore they want to make Batteries and motors for the hybrid in China to aid in getting official approval for their auto sales. Previously the motors and batteries for the Prius were manufactured only in Japan. This is just another indication of the power that China is showing in both rare earth materials and manufacturing. It points out once again that the U.S. is now at a disadvantage in manufacturing and has a strategic problem with magnets.

Jack Lifton one of the founders of Technology Metals Researchs web site has written an article about Heavy Rare Earths in America. This article is chock full of information about the rare earth production and its demise in America.

http://www.techmetalsresearch.com/2011/08/heavy-rare-earths-in-america-crystal-balls-brass-balls/

He identifies two companies, Rare Element Resources and Ucore Rare Metals as having high potential for producing critical quantities of  Heavy Rare Earth metals. He estimates that less than 500 tonnes  in total of magnet alloy as raw materials are imported into the USA each year for magnet fabrication, and of that amount, he seriously doubt that more than 100 tonnes is used exclusively for military production, Over 90% of the worlds Rare Earth Powder Metal are made in Asia. of the small percentage of rare earth magnets imported into the U.S., the larger percentages used in high tech civilian industry such as medical imaging. Only a small amount is used for significant military devices.

Some of the most significant information in the article relates to the lack of rare earth manufacturing in the U.S.

I.E. No rare-earth ores have been mined in North America in the 21st century

No American company, using American-developed technology, has produced pure REEs in the USA in the 21st century

No American company has made Nd-Fe-B magnets from the individual REEs in the USA since at least 2004. Electron Energy  in Lancaster, Pennsylvania has however been making Sm-Co-based REPMs and alloys for decades.

Only a small overall tonnage of REPMs are currently produced in the USA, from a rare-earth-metal base, and, critically

All of the commercially available Dy is mined in China.

This article shows the sad state of Rare Earths in the U.S. and the lack of understanding that led to the magnet production moving to China. Very few companies are currently interested in solving the problem. They are all members of the USMMA. Recharged Particles wants to join this group in bringing magnet manufacturing back to the United States.

On August 24, 2011, The New York Times published an articles by John Gertner asking Does America Need Manufacturing?

http://www.nytimes.com/2011/08/28/magazine/does-america-need-manufacturing.html?_r=1

The article starts with the statement that historically the federal government hasn’t invested in private businesses or specific segments of the economy. This changed  when over the last two years, the fed doled out $2.5 billion to 30 companies involved in advanced battery technology. The goal is for the U.S. produce 40% of the Lithium-ion battery capacity for the new elcttric cars. One person estimates that they will create up to 62,000 jobls in this market segment. All of this assumes that the electric car will become a major component of car sales and will most likely require help by the federal government in the form of rebates, etc. In addition, one critic stated that the industry wasn’t ready to adsorb $2+ billion and we would end up with over built capacity for the industry.

The article states that 5,000,000 manufacturing jobs have been lost in the U.S. but the author thinks the number is vastly larger than 5,000,000. How many jobs were lost when General Motors filed bankruptcy and walked away from $250 Billion in debt. The lost jobs to subcontractors has never been discussed or even estimated. In addition, there has been no accounting for the early retirement programs that are not counted in layoffs. There is no accurate accounting for the total number of people who have failed to file for unemployment or who have given up on getting a job. These numbers are totally fictitious.

Locally, Dayton at one time had 6 GM plants, today there are none. Dayton had NCR, they now reside in Atlanta. Next question is will LexisNexis remain in Dayton or do they currently have a suitor. This is typically what has happened to the Midwest with the loss of manufacturing jobs. NAFTA is one of the main causes for the move of manufacturing out of the U.S. How many companies moved to Mexico for the cheap labor.

Magnet manufacturing and the production of magnetic powders is almost totally moved to China. This started in the late 90′s and was complete by about 2005. Now about 94% of all magnets are manufactured in China. There is a very small segment of magnet manufacturing left in the U.S., Flexmag Industries which makes rubber bonded magnets, Electron Energy Corporation manufactures Rare Earth magnets, Thomas and Skinner, and 3 other small manufacturers.

Recharged Particles is tasked to manufacture both soft and hard ferrite powders and magnets and will begin the development and production of Rare Earth and development of rare earth replacement powders and magnets. We will be adding at least 15 jobs at each site where we install recharger recycling operations at steel pickling sites. Installation at Ilmenite processing sites will add between 50 and 100 jobs.  The Installation at each site will result in a reduction in the cost of Hydrochloric Acid by between 50% and 75% as the acid is recycled. Only 2% make up acid is required.

There is no long term plans to increase jobs in the United States. Companies that still have manufacturing operations have been encouraged to move their operations off shore by such legislation as NAFTA. In addition, the administrations have done nothing to support manufacturing operations, viewing businesses as the enemy. The current economic condition in the U.S. in the result of the fact that the U.S. did not completely recover from 9/11 and has had a weak economy since that date. Coupled with the wars in Iraq and Afghanistan the economy has never had a chance to regain the strength we had prior to that date. The so called high tech jobs that have been discussed will not provide enough jobs to put at least 5,000,000 back to work. The training programs are few and there is no plan to increase them. Lets see a concerted effort to bring manufacturing jobs back to the U.S.

The 7th International Rare Earths Conference is scheduled for November 15 – 17th at the K0wl0on Shangri-La Hotel, Hong Kong.

http://www.metalevents.com/events/7th-international-rare-earths-conference

Roskill is the lead sponsor for this event. Of note is that some of the sponsors, Great Western Minerals Group, Molycorp, and Avalon Rare Metals are potentials threats to the Chinese juggernaut and control of the rare earth market.