Buy heavy rare earths: (ALK)

[Sparty]

Last week I attended the Rare Earths and Strategic Metals conference convened by IQPC. The conference held in Sydney was a "first' for Australia and a good learning experience for me. The presenters can be seen by following the link above.

There were some really invaluable presentations that highlighted the world's and Australia's position going forwards.....

Jack Lifton gave us a 40 minute overview of his viewpoints acquired by over 40 years in the REE and strategic/critical metals business. I was struggling to present a coherent picture of what he said and chanced across this article that helps quite a lot.....

I've cut and pasted the summary below:

• Chinese actions already underway will create a window of opportunity, for both LREE and HREE producers in the rest of the world.

• The added virtual demand to build the massive Chinese stockpiles of rare earths will keep REE prices high and going higher for years.

• The shortage of separation and refining facilities for HREEs outside of China is now the roadblock for HREE production outside of China.

• China, by its actions, is creating enormous pressure on Western manufacturers, including those in Japan and Korea, to move the high-tech operations they have been safeguarding as domestic priorities, to China, in order to obtain critical raw materials.

• In my opinion, China is building a stockpile of this magnitude, in order to insure against the possibility of a domestic supply interruption of rare earths, and has no interest in safeguarding the manufacturing world outside of China.

• At the same time, the stockpile will drive more manufacturing to China, thus increasing Chinese wealth creation and employment.

The only way that the industrial-policy-free and resource-underdeveloped West can maintain its industrial plant that requires rare earths, is to develop the entire rare-earth supply chain outside of China.

This means that going forward from now, the best investments in rare earths outside of China are:

• Deposits that can produce HREEs as a soon as possible;
• Rare-earth separation facilities;
• Rare-earth conservation research;
• Recycling

(One of the most telling points in Lifton's and his off-sider's (Gareth Hatch) presentations was the acuteness of the supply shortage of the H-REEs and the drivers for the increased demand.)

After I have made some further investments over the next few weeks I will detail the various ASX companies that that have H-REEs and will be able to come into production in the near future. These of course include ALKANE RESOURCES which I already hold.

[Sparty]

China Pressing Forward With Wind Power
As Beijing's booming economy devours ever more energy resources, China is turning towards renewable energy.


According to a recent forum on maritime wind power held by the National Energy Administration (NEA) in Nantong City in Jiangsu province, China's maritime wind power installed capacity will reach 5 million kilowatts by 2015, with a projected installed goal by 2020 of 30 million kilowatts, Xinhua Asia-Pacific Service news agency reported.


NEA Deputy Director Liu Qi pointed out that maritime wind power is the forefront of global wind power technology development and that China's industrial base will allow it to both evaluate and develop offshore wind power so as to promote the country's energy supplies and security. A public tender for the second round of offshore wind power concession projects with a total installed capacity of up to 2 gigawatts will be completed during the first half of 2012. The Chinese wind power industry has doubled its installed wind power capacity every year for the past five years.


A year ago the first stage of the East Sea Bridge Offshore Wind Farm went into operation in Shanghai. Totaling 102 megawatts, the East Sea Bridge Offshore Wind Farm is China's first large-scale offshore wind farm, comprising 34 units of 3-megawatt Sinovel turbines.
By Joao Peixe


A few facts from the Sydney Rare Earths and Strategic Elements conference:


Large, low maintenance - gear box free, wind turbines require H-REE magnets. A 3 MW system requires 150 - 200kg of the light REEs Nd and Pr plus 6~12% by weight of Dysprosium. A 1GW power station scale turbine plant would require around 240t of REEs.


According to Hatch and Lifton

A typical Nd-Fe-B-based REPM contains 3-12% of Dy overall ? this means that 100 kg of such magnet alloy contains from 3 to 12 kg of Dy as well as around 28 kg of Nd. The OEM automotive industry uses the most Dy loading, as high as 12%, to give their REPM-based motors, sensors, generators and the like, the maximum service life at constant high-temperature use.
Even assuming that the new demand for Nd-Fe-B-based alloy for the Chinese wind-turbine industry uses only 3% of Dy, and even if the 59,000 tonnes of Nd were only 59,000 tonnes in total of magnets, one would still need an additional 1,800 tonnes of Dy just for this project, as well as an additional 18,000 tonnes of Nd!


If the demand for new additional Nd for the wind-turbine project is indeed 59,000 tonnes then a minimum demand for Dy could be 6,000 tonnes, which would be, at current production, the total dysprosium produced for the next 7 1/2 years!

So who has Dysprosium and will be in production (2012-13)?