As many end user’s, investors and Base Metal industry participants are currently very aware, there is a storm boiling over China and their stranglehold over various mineral resources these days. One main case in point being the Rare Earth sector, front and centre. This isn’t much ado about nothing either. You don’t need a crystal ball to understand this worldwide rush for finite natural resources is only going to become drastically elevated and better reported as time moves on.
It isn’t just the Rare Earth’s that we need focus on. The ever growing demands by existing as well as new and emerging economies only dictates this problem is already well advanced and will only escalate in future.
I will attempt here, to bring forth new and mostly unreported (in mainstream press) comprehensive information that could and should be a wake up call to investors and Gov’t mining regulators alike.
- China & Basic Supply-Side Security Facts For The West To Consider:
- China controls 97% of world supply chain of Rare Earth’s ($1.2 B yearly market value)
- Global Rare Earth demand expected to rise to 210,000 Tonnes by 2015
- China has both production and export quota’s as well as 15% to 25% export taxes on RE’s (China’s Advanced Material Corp President has recently stated they will probably further tighten RE controls next year)
- US has only one advanced stage RE mine and no facilities to refine oxides to metals as yet as well as an estimate of 15 years to rebuild a domestic supply chain
- China controls +/- 97% of EMM (Electrolytic Manganese Metal) market worldwide (approx. value of $3.3 B in total worldwide EMM trade) (EMM is pure Manganese Metal)
- World EMM production in 2008 was 1,190,000 Tonnes, China produced 1,138,000 T’s of this and consumed 833,000 T’s in domestic market only exporting 305,000 T’s
- China export tax on EMM is currently @ 20%, coupled with US Import Tax of 14%
- Canada & US currently hold no domestic supply of Manganese at present other than that from various recycling facilities
- Manganese is the 4th largest traded metal worldwide and has no substitutes
- China controls +/- 87% of Magnesium market worldwide (world production in 2000 was 210,300 Tons, 2007 was 792,000 T…in 2009 it dropped 15% to 615,000 T of which China produced 470,000 T)
- China export tax on Magnesium is currently @ 10% (USA adds Anti-Dumping Duties/Tariff’s on imports)
- Limited US salt brine supply of Magnesium by one source with EPA problems
Why am I making this association or comparison of Manganese and Magnesium supply security with that of Rare Earth’s one might wonder? I will show you as we go along and keep in mind all three metals categories are considered “specialty, critical and or strategic” depending on what aspect of Gov’t, commerce, industry, defense sector or plain economic end-user you listen to. Simply put, they are all absolutely crucial & critical to the sustenance and advancement of all modern day economies.
What Are Generally Considered to Be The Strategic Metals?
Strategic metals’ are metals that are integral to the national defense, aerospace or energy industry, but are threatened by supply disruptions due to limited domestic production. In 2007, the US National Academy of Sciences (NAS) produced a report entitled Minerals, Critical Minerals, and the US Economy , which generally defines “critical minerals” as those that are important in use and subject to potential supply restrictions.
Elements determined by the NAS report to be most critical have been highlighted in bold.
Lithium Beryllium Magnesium Silicon Calcium Scandium Titanium
Vanadium Chromium Manganese Cobalt Gallium Germanium Arsenic
Selenium Strontium Yttrium Zirconium Niobium Molybdenum Ruthenium
Rhodium Cadmium Indium Antimony Tellurium Lanthanium Hafnium
Tantalum Tungsten Rhenium Osmium Iridium Mercury Thallium
Cerium Praseodymium Neodymium Samarium Europium Gadolinium Terbium
Dysprosium Holmium Erbium Thulium Ytterbium Lutetium
**Research shows that the US is 100% dependent on imports of 18 different key metals and 90% dependent on 4 others as well.
** There are some concerns like this report from 2007: “US Defense Stockpile” “Ineffective”
** China, Resource Protectionism & the WTO
For those unfamiliar with the current case, China’s export controls regulating nine “raw materials” were brought to the attention of the WTO Dispute Settlement Body by the US, EU and Mexico in June of 2009. The nine raw materials identified by the complainants include bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus and zinc. https://www.raremetalblog.com/2010/08/china-resource-protectionism-the-wto.html
I don’t think I need go into any great detail regarding the strategic and critical importance of RE’s especially as there are 17 different minerals in this category. As most of us know from the extensive press RE’s have received over many months now, the main uses for many RE’s are in missile defense systems, munitions, lasers, satellites, radar systems, computers, cell phones, hybrid vehicles, turbines and energy efficient lights etc, the list is very long and growing constantly. The potential for new domestic RE mines is great with known RE deposits in at least 6 different US states at varying exploratory stages.
Magnesium: The Lightest Of The Light Metals
The list for Magnesium usage is also long, growing at a fast pace and will surprise many, especially with the new and constant innovative discoveries being made.
Current or long standard uses include; a multitude of alloys with aluminum, manganese, zinc, mainstay importance to the die casting industry, aviation, defense and space industry, many automotive parts and components, rockets, missiles, bombs, flares, uranium reduction, refractory use in iron and steel production, medicine, agriculture and much more.
New Uses, With Current And Ongoing Discoveries In Progress:
This is where the excitement builds going forward into the future for Magnesium miners. There’s a lot to read about so please bear with me as the list is extensive and deserves more public awareness.
**Toyota Studies Magnesium Battery as Lithium Alternate
Toyota Motor Corp; the world’s largest seller of hybrid autos, said it’s developing a magnesium battery that holds twice the energy of lithium-ion cells as automakers seeks better ways to power electric cars.
The company’s technical center in Ann Arbor, Michigan, is working on the magnesium-sulfur battery, complementing development of other future electric-power chemistries at Toyota labs in Japan, Jeffrey Makarewicz, the engineer managing the U.S. project, said in an interview at the North American International Auto Show in Detroit. https://www.bloomberg.com/news/2011-01-10/toyota-developing-magnesium-battery-as-lithium-alternate.html
**Liquid Battery Offers Promising Solar Energy Storage Technique
(Liquid Magnesium) As Sadoway explained in a recent article in MIT's Technology Review, the liquid battery is a promising candidate for solar energy storage for several reasons. For one thing, it costs less than a third of the cost of today's batteries, since the materials are inexpensive and the design allows for simple manufacturing. Further, the liquid battery has a longer lifetime than conventional batteries, since there are no solid active materials to degrade. The liquid battery is also useful in a wide range of locations compared with other proposed solar storage methods, such as pumping water. Most importantly, the liquid battery's electrodes can operate at electrical currents tens of times higher than any previous battery, making it capable of quickly absorbing large amounts of electricity.
The researchers hope to commercialize the liquid battery in the next five years. As Sadoway explained, connecting the batteries into a giant battery pack to supply electricity for New York City would require nearly 60,000 square meters of land. Such a battery pack could store energy from enormous solar farms, which would replace today's power plants and transmission lines as they become old. https://www.physorg.com/news155569564.html
**An Automotive Application For Lightweight Magnesium
In another project, Misiolek and Toro are using TEM to gain a better understanding of the strength and mechanical stability of magnesium, which has been the object of years of study by automakers.
“Magnesium is even lighter than aluminum, which manufacturers are planning to use in newer cars,” says Misiolek. “The hope is that it will make cars lighter, more fuel-efficient, cleaner and with superior handling due to more even load distribution between front and rear axis.”
In collaboration with General Motors, Misiolek and Toro are studying a magnesium alloy containing zinc and cesium. Zinc improves magnesium’s strength, while cesium improves its ability to deform, or change shape.
“Magnesium is not easy to deform because it cracks and can break,” says Misiolek. “This alloy improves magnesium’s ability to deform without compromising its strength and its ability to bear loads.
“This is especially important to auto manufacturers. The parts of a car are geometrically complex and require a material that can deform to create the right shape and thickness.”
**Move Over Hydrogen, Make Way for Magnesium Power
Magnesium stores about 10 times as much energy as hydrogen.
While a lot of research has already gone into using hydrogen to store energy, either directly as a fuel or as part of fuel cell systems, some researchers think we should be looking at magnesium as a way to store energy. Magnesium stores about 10 times as much energy as hydrogen.
Engineers at a Canadian company are working on a fuel cell that uses magnesium, air and water to produce electricity. An Israeli researcher has come up with a magnesium-based battery sort of like the rechargeable lithium-ion batteries we all know about. And a California researcher is working on a way to use magnesium to produce hydrogen for fuel.
**A researcher at North Carolina State University's Centennial Campus and colleagues have figured out a way to make an aluminum alloy, or a mixture of aluminum and other elements, just as strong as steel.
Now, Zhu plans on working on strengthening magnesium, a metal that is even lighter than aluminum. He’s collaborating with the Department of Defense on a project to make magnesium alloys strong enough to be used as body armor for soldiers.
Zhu’s colleagues on the Nature Communications paper are affiliated with the University of Sydney in Australia; the University of California, Davis; and Ufa State Aviation Technical University in Russia.
The Department of Materials Science and Engineering is part of NC State’s College of Engineering. https://www.magnesium.com/w3/news-room/news_open.php?news=5693
**FUKAI Environmental Research Institute, Inc., based in Ueda, Japan, has developed an innovative technology capable of generating hydrogen energy at the world's lowest cost.
This newly developed technology generates hydrogen by adding aluminum or magnesium to what is known as "functional water" in the boiling state. The amount of hydrogen generated is 2.0L per 1g of aluminum or 3.3L per 1g of magnesium.
Thanks to this technology, it is possible to generate the amount of hydrogen required to generate 1kWh of electricity for a cost of merely 18 cents or so, the world's lowest cost.
The reason for the high rate of hydrogen production lies in FUKAI's proprietary functional water: its functional water is in the state ready to generate hydrogen. By reacting with aluminum or magnesium it begins to generate large amounts of hydrogen.
Furthermore, the functional water itself can be produced by simply letting city water pass through a "functional water generation unit," which contains natural minerals. This also eliminates the need for additional energy costs.
Mr. Toshiharu Fukai, the developer of this new technology and the Representative Director of FUKAI Environmental Research Institute, Inc., remarks: "If we make the most of this technology, in the future it will be possible to run automobiles using water only - no need to use gasoline or electricity. In the future, water is bound to become a vital energy resource replacing petroleum-derived fuel. We are also pushing forward with technology that will allow us to generate hydrogen with zero cost. If we succeed in this development, even ordinary households will be able to produce hydrogen. Hydrogen-based power generation at home will no longer be a dream." https://www.magnesium.com/w3/news-room/news_open.php?news=5786
**Magnesium Elektron, a subsidiary of the LUXFER Group, and South Korean steel maker POSCO, the world’s third largest steel producer, have signed an agreement to carry out joint research projects covering enabling technologies to facilitate the growth of volume applications utilising magnesium sheet.
Magnesium weighs only a quarter as much as steel and is 35% lighter than aluminum. However wider application of magnesium sheet particularly for automotive applications not only requires the material to be cost competitive but all the supporting technologies such as forming, joining, coating must facilitate competitive use of the sheet when compared to steel and aluminum
The need for lower emissions coupled with the development of electric vehicles continues to make light weighting a key strategic objective of all vehicle manufacturers and magnesium sheet can provide a further major contribution to its achievement.
“We will be able to accelerate magnesium applications into the automotive industry and other industries through strong R&D collaboration with Magnesium Elektron and I believe that in the near future we will see as many magnesium applications in our daily life as we do aluminum applications.”
**Freiberg University of Mining and Technology and MgF Magnesium Flachprodukte GmbH (MgF) recently inaugurated a new hot rolling mill for magnesium.
In addition to vehicle manufacture, magnesium sheet can also be used in engineering and other areas of industry where weight reduction is important. For ThyssenKrupp Steel Europe, the magnesium activities add to the range of intelligent lightweighting materials the company produces for areas such as the auto industry.
MgF and the Institute of Metal Forming at TU Bergakademie Freiberg jointly developed an innovative concept for the production of magnesium sheet using a casting-rolling line to manufacture flat strip directly from molten magnesium. With significantly lower costs for starting materials, reduced material and energy consumption and fewer production steps than the conventional route for flat magnesium, this is an extremely cost-efficient process. https://www.magnesium.com/w3/news-room/news_open.php?news=5892
**The European Commission has identified 14 mineral raw materials, including several metals and metal groups, which have high supply risks and could face shortages resulting from limited production sources and high demand.
An expert group assembled by the Brussels-based commission studied 41 minerals and metals groups to compile the “critical” supply list. Minerals on the critical list are antimony, beryllium, cobalt, fluorspar, gallium, germanium, graphite, indium, magnesium, niobium (also known as columbium), platinum group metals (PGMs), rare earths, tantalum.
The experts concluded that demand might more than triple for some of the minerals between 2006 and 2030 and released forecasts of demand growth from emerging technologies for nine of the minerals as well as silver and copper. They said the growing demand for raw materials is driven both by the growth of developing economies and new
The high supply risk was described as mainly due to the fact that a high share of the worldwide production mainly comes from a handful of countries including China for antimony, fluorspar, gallium, germanium, graphite, indium, magnesium, rare earths and tungsten; Russia for PGMs; the Democratic Republic of Congo for cobalt and tantalum; and Brazil for niobium and tantalum.
** Also noteworthy is the fact that the US Anti-Dumping Tariffs (+50%) on Magnesium imports are killing the US Die Casting Industry slowly but surely. The WSJ editorial concludes with a call to revoke the antidumping duties on Magnesium https://blogs.forbes.com/beltway/2011/01/03/death-by-antidumping/?boxes=financechannelforbes
**Must Read: U.S. Antidumping Regime Restrains U.S. Export Growth
I could list more up and coming innovations & discoveries for Magnesium but by now you should have the picture and although this editorial is already becoming long these facts are important for those with an eye to the future and exactly how a strategic and critical a long term domestic supply of Magnesium & Manganese will invariably be to the N American economy and know there is at least one new mega scale discovery stage Magnesium deposit underway and currently in the development stages in Nevada as well as a new mega scale Manganese deposit, also being in exploratory & developmental stages in Arizona
Manganese Key Facts:
- Manganese is listed as a key “Strategic Metal” for military hardware according to the US DOD
- The US Dept of Defense Strategic Metals stockpiles of Manganese are virtually gone. Sold off!
- The US is 100% dependent on Manganese imports for the steel industry and its many other applications and you do not make steel without Manganese. US Electrolytic Manganese (EMM) Import Statistics are currently @ 35,000 Tonnes per year.
- Total world production of Electrolytic Manganese in 2008 was 1,190,000 T’s, of that China produced 1,138,000 T’s and domestically consumed 833,000 T’s of that total.
- Manganese is 4th largest traded metal commodity worldwide @ approximately 30 B pounds p/y worldwide.
- Electrolytic Manganese production (EMM) is currently at 2.6 B pounds p/y worldwide, up from 660 M pounds in 2002.
- Worldwide Manganese demand is growing @ 8% p/y, with EMM (Electrolytic Manganese) growing @ 26% p/y for the last five consecutive years.
- There are no substitutions for Manganese in its major applications
Primary Applications of Manganese:
All steel, the largest user, (up to 90% of Mn production) contains varying amounts of Manganese from 10 to 20 lbs p/T. Hadfield steel contains 10 to 20% Manganese. A component in Zinc and Aluminum alloys, Titanium & Uranium production and De-Sulphurization of steel. The Aluminum industry is the 2nd largest user as an alloying agent. Cell phones, Dry Cell Batteries, fertilizers, and Die Casting as well as some other less demand intensive uses like paints, oil & gas additives. Since 2007 Manganese as an alloy has been used in many stainless steel applications, thereby replacing nickel’s higher costs.
New Manganese Applications:
**General Motors announced today that it has licensed lithium-ion battery technology developed at Argonne National Laboratories, the research institution that's funded largely by the U.S. Department of Energy.
The agreement allows GM to use the technology throughout its supply chain, and covers a suite of patents that includes and builds on the technology used in the 2011 Chevrolet Volt.
In 2008, the U.S. manufactured just two percent of the world's advanced batteries, but it's expected to make up to 40 percent of them--or enough for 500,000 electric vehicles annually--by 2012.
Argonne's cathode--a nickel-manganese-cobalt material--offers increases of 50 to 100 percent in energy storage over previous generations of cathode material. It uses a mixed-metal oxide containing both lithium and manganese to extend operating time between charges, lengthen the cell's life span, and improve safety. https://www.greencarreports.com/blog/1053251_gm-to-use-argonne-national-lab-advances-in-next-gen-volt-battery
**Li-ion Battery Stores 6.2 kWh and More:
January 11, 2011 by Paul Dvorak
Filed under Power storage, Wind Power News
A proprietary lithium-ion battery pack built around a nickel-manganese-cobalt-based Dow Kokam cell, has four times the power and energy storage of lead-acid batteries in half the volume and a quarter of the weight. Each of these battery packs, from Corvus Energy, delivers at least 22% more power and energy density than the most powerful lithium-ion phosphate batteries used in electric vehicles and consumer products. https://www.windpowerengineering.com/featured/business-news-projects/li-ion-battery-stores-6-2-kwh-and-more/
**Carbon Nanotube Foams and Nanoscale Manganese Oxide Make Improved Supercapacitor Electrodes Say Navy Scientists
Raw Materials Protectionism: A Report by Mining Association Of Canada
- Declining mineral reserves –down 50% in Canada’s case
- China Consumed 5% of world’s base metals in 1980s versus +25% today
- Geopolitical realities in high-risk countries
- China is among world’s largest and fastest growing markets for metals and minerals –it holds over US$2 trillion in foreign exchange reserves https://www.oecd.org/dataoecd/39/28/43934124.pdf
In summation I would say that there is a substantial amount of information given in all the preceeding commentary and links that you haven’t read in most mainstream mining news.
I believe that for those who took the time to study this info at length, it will prove insightful and I hope helpful in understanding that there are also other “Strategic and Critical Metals” beyond just the RE’s and they also hold great importance to our modern society, security and commerce. Much more than meets the eye.
As the saying goes, “If It Can’t Be Grown, It Must Be Mined” and we in the western world need to get back to discovering, permitting, financing and bringing forward into production new domestic supply mines to create jobs and hold secure our position as an economic world leader in the 21st century. It’s great to see China and other BRIC nations transforming into modern day societies with higher standards of living for their people but we can’t let them control our natural resource supply for the future.
"A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned – this is the sum of good government."– Thomas Jefferson
As Always: Thanks for reading; Ken Reser
Disclosure: The author is an Independent Research Consultant, and NOT employed by any company or Corporation or other entity that may have been mentioned in the afore-going commentary. He is not an accredited investment advisor and as such the opinions expressed herein are entirely his own. No fees of any kind were paid for the writing of this report: Ken Reser