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Rare earth wars?
An interesting article from the Sydney Morning Herald
regarding Hyundai. HY is the fifth largest producer of cars globally. A
solid Korean company. Of interest is that the company changed its
articles of incorporation last Friday in order to:
"secure resources for the development of eco-friendly vehicles."
This of course means rare earths, in particular neodymium. A spokesman had this to say about the company’s objectives:
“We will make efforts to vigorously secure rare earths and other rare resources used in cars."
Over the years I have done a fair bit of business with Korean companies.
A part of their success is their tenacity. They won’t quit. Someone
described it to me once:
“They
are like rhinos. When they decide to go in one direction, they put
their head down and just charge through the bush until they have arrived
at the destination. It isn’t pretty. Anything in the path is trampled;
the animal often suffers injuries in the process. But they will die
trying to get there”
When a Korean company with a $40b market cap decides it wants to “vigorously secure rare earths”, look out. It will happen.
If the 5th largest auto company is doing this, you can expect that some
of the bigger players are soon to follow suit. If you followed that
logic you would have to ask, “what’s GE doing in this?” Their wind business is booming. They must be one of the largest end users of REs as a result.
I don’t recommend individual stocks. That’s a good way to get egg on my
face. For what it is worth I do own some of the dozen or so names that
are connected to the RE story. I’m not buying more. It looks to me that
we have some mining stocks that are trading at internet type multiples.
Caveat emptor on this.
Big, big money is going to be made on REs. Hyundai’s move just tripped off round two of this story.
Note: I’m nutty enough to have walked around a “likely”
location looking for a meteor fragment. All you need is a stick and a
neodymium magnet or two. Tape it to the end and poke it around and hope
you get lucky.
There are dozens of sellers online. They don’t cost much. For $20 you get what you need. Beware.
These things are incredibly powerful. I have busted up a few fingers
and nails just prying them apart. And don’t even think of putting it
next to a cell phone. When you see just how strong these things are, you
will understand what all the fuss is about.
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Oh, so it CAN be reopened.
If this were to happen, (and I assume it is some other mine then Molycorp's Mountain Pass) how many years do you think it would take to get end product to market and what do you think will happen to price in the meantime?
may I suggest that you take some time to do some homework on the subject.
By the way, if you think TITS is going to get someone to read your 'thoughts', it will only work once. Besides, to many are copying that ploy.
Actually this happened already in Germany. One mine in Eastern Germany was closed around 1991, when they began to import the stuff from China. Four months ago they have rehired most of the old miners (which is funny - they were fired because of China and now they are rehired because of China) and they reopened the mine. They want to reopen many other mines in that area.
Probably faster than you think. Unless a few places I'm thinking of have since gone out of business, we have the facilities up and running to process the metal, we just need to find it and dig it out.
you are right, a lot faster than you think actually. The only reason the mines in the USA and Canada stopped mining the known supply (meaningfully functioning mines) is because the Chinese flooded the market with a cheaper supply. Not so anymore even with our environmental rules which added to the cost.
This electric car business is a red hearing. And, any electrical engineer worth his salt will tell you that.
The truth on 'electric cars' is the process to convert any grid power into stored electricity is so inefficient that the concept has big issues that only 'playing with the data' can fix ( God, haven't we had a lifetime of that). The cost to convert far out weighs the benefits...period.
We are back to following the special interests and those who repeat a doctrine until it becomes the only answer.
IF this country was really interested in cost efficiencies and environmental alternative fuels for cars, etc. then Natural Gas would be the headline, not all this battery nonsense.
If you're referring to efficiency at the car battery level, there are new Vanadium based batteries coming out with very real gains in watt delivery, power and rechargibility speeds that are about 2-3x of anything out there now.
Vanadium-Lithium batteries for cars. Vanadium Redox batteries for large scale power storage. Lithium wears out after 350 cycles, and catches on fire the larger you get. Vanadium Redox "wears out" after 35,000 cycles, and does not give off heat, and there you have industrial to grid level sized batteries, scalable to whatever watt size you need to store.
This tech has been around for awhile, but what hasn't has been reliable Vanadium supply. There are a few Vanadium based mines coming online in the next 3 years and are as sought after as the rare earths. Largo, American Vanadium, Apella, and probably the gem of them all- Energizer Resources. Energizer's got a sediment hosted deposit, which means highly pure vanadium, uncontaminated by rock or metallic compounds.
I think vanadium will be on all sovereign's radar for locking down supply.
Not entirely true.
Mining relies on several factors, chief among them is:
All in all, I'm not in this one. I'm into Lynas and Great Western, but then I bought them both in May 09, so I already have a 10 banger in GWG.
At least someone here gets it....
++
Pickens may be talking his NG book, but it's still a pretty good story.
Here in Canada, we are constantly bashed over the head to save power because our electrical grid is strained. Can't imagine what would happen if people started plugging in cars. They are huge energy hogs.
Gosh yah, what with all the rolling blackouts in Edmonton, Vancouver, Toronto, Halifax and Montreal... everytime I visit these cities it's like being in rural India.
</sarc>
Kidding aside:
I mean, ghod forbid the infrastructure should have to undergo upgrading. Maybe Canada could try expanding their grid WEST-EAST instead of the historically tight focus on sending their electricity straight south?
Keep Canuckistan Canuckistanian!
Buy it for $20 today, sell it for ??? tomorrow?
What are some tickers for these rare earth stocks?
AVL
CCE Tsx.v & FrankfurtX in Germany
Commerce Resources
http://www.commerceresources.com/s/Home.asp
Been with these guys for years.
When it explodes... look out above.
Look real hard, you will see me in some of the promo photos.
Do your DD on this... very solid assets and people.
If Commerce has a really good property, very mineable and profitable, they will be bought out and swallowed up by a major long before that profit hits the books.
That's just the way it is.
http://www.kjmagnetics.com/products.asp?cat=11
Mr. Wizard Time!
notwithstanding Kim Jong-il