Rare earth: The new star in the sky commodity. What you should know about your customers and consultants of 3

Part 2

go to part 1 go to part 2

5 Investment opportunities in rare earths

Who wants to invest in the business of rare earths, has basically three different options for system:

a) direct investment in SE-mines, -Production Company: The purchase of shares of individual companies requires SE, that the investor is seriously addressing the market and the respective companies. For this he should know, how management is composed, how to work seriously on the individual projects, SE which elements are present in any concentration and how fast is a project ready for production.

b) Investment in SE-Oxide und -Metalle: The investor has the opportunity, in a roundabout way directly from the price movements of rare earth benefit, by buying shares of companies, the rare earth oxides and metals have physically and act. Recently, some companies offer in Germany and Switzerland, the rare earth elements physically as an investment.

c) Investment in SE indexes, ETFs and certificates: By this, for metals technology is still relatively new financial instrument, there is the possibility, the investment to diversify a bit and to spread the risk. However, it must also develop the market and the composition of individual songs studied carefully and regularly assessed continuously re-.

6 Crisis, Euphoria, Uncertainty and opportunity

Although the investment market for Rare earth is still very young, He was the first major storms course already passed. On the recognition of a looming supply crisis was followed by a phase of euphoria, which in the summer 2011 peaked. Where a few months, a simple, positive exploration report of a mining company with investors prosperous enough to exchange fantasies and desire to buy an appropriate trigger, Today, more a kind of uncertainty prevails over the long term success of the relevant criteria of a rare earth company.
The reason: The two largest companies outside China's future SE, Molycorp Inc. (Mountain Pass, California) und Lynas Corporation Ltd. (Mount Weld, Australia), are about to start its production to the future, they can cover a large part of the demand for rare earths outside of China. As these companies produce only light rare earths, this may not mean the long-term solution to the problem offer. In addition, it is anticipated, that China is changing in a few years ago by a SE-net exporter to importer will, what the demand and thus also affect the prices will be sustained.
The gap, close to the West needs is less to be found in the exploration of rare earths, but rather in search of the know-how, as the heavy rare earths are separated from their substrate. With the acquisition of Neo Materials has the U.S. company for U.S. $ Molycorp 1,3 Billion. im April 2012 the know-how purchased, the heavy rare earths to separate from the substrate material. Neo Materials is the only Western company, under the then leadership of Alastair Neill, a refinery, North of Shanghai, for the separation of Light and heavy rare earth elements built. Alastair Neill is now working for another U.S. company in the field of rare earths, die Firma Black Sea Metals Inc. This has recently announced, that they would build a refinery with the same construction in Shanghai in the Asian part of Turkey.
Each month, the rest of the world moves China in the race closer to the knowledge about the rare earths. Thus, the U.S. and the EU are trying to sue the trade dispute with China before the WTO (world trade organisation) To gain time. Thus, only the United States at the time of 2007 to date 73 Trade investigations against China conducted. China defended on the other side with arguments such as: The growing environmental awareness of Chinese people is contrary to an increase in production of rare earths, or the increasing demand of China for rare earth presents the personal use of the Export.
But on the other hand, more and more high-tech products placed on the market, the increasingly rare earths need and unfortunately these are the most difficult to be obtained HREE (Heavy Rare Earth Elements = heavy rare earths). More and better-resolution LCD screens, more effective working windmills, Solar Panels, electric motors, Computer, Smartphones etc. drive the consumption of rare earths to be gaining momentum. If, as it is expected, China in the next five years from the SE to SE importer exporter longer walk is a shortfall, despite rising production in the West inevitable.

7 The trade dispute between the United States, EU, Japan and China

China is preparing for a lawsuit, which the United States, have been brought by the EU and Japan because of China's export controls on Seltenerdmineralien. The triumvirate of industrial powers brought the case on 13. March before the World Trade Organization (WTO). The Chinese Ministry of Industry and Information Technology was announced, the country was ready, to refer the allegations against position. May Xinyu, research associate of the Academy of International Trade- and economic cooperation, said on 16. March China's financial newspaper Securities Times his view of things with. Following are edited excerpts:
Before the early 1970s, China exported no rare earths, and the world market for rare earths was of the United States, Europe and Japan dominate. In the 1970s, China gradually faded into the world market for rare earths, and its market share increased over the next few decades to. With its current share of about 90 Percent of the global mining of rare earths from China exercises de facto monopoly. The use of this important raw material needs to be improved urgently, and not only through the production of individual Seltenerdprodukte, but also through the optimization of each step of their processing.
China has every reason, to impose strict controls on its exports of rare earths, even if it means an increase in the prices of these precious resources, because of the existing pricing mechanism has serious flaws. As up to date, the impact of mining on the environment in the price not included, not to mention the scarcity of raw materials throughout.
The problem is, that WTO rules, of the United States and Europe, drawn with a heavy hand, are unfair. The Western states are to, these rules tricky construed in their interest, However accusing developing countries and regions, violate WTO rules, if they try, to protect their legitimate rights. China are not alien to these tricks. Therefore, China should keep during the coming confrontation over rare earth following two points in mind: China should do everything, to win the argument, and at the same time efforts in production and sale of rare earths in the- and strengthen international, so that the Western states and then can not win, if China were to lose the process.
The coordination of the reduction of deposits of rare earths, which began a year ago, should constitute our highest priority. This is the foundation of a trade association for rare earths. This will allow China, exert greater control over the market for rare earths, mainly because Chinese companies to obtain rare earth mining low profits. The restructuring of the sector is to consolidate the industry. It is primarily about, the many - close to small businesses and to provide the large state enterprises has a higher proportion - especially in southern China make. This also benefits the environment.
However, this will lead to a loss of income at the level of local governments. Into areas, where the decomposition of rare earth elements is set, to ensure sustainable development, large companies should provide financial resources in a reasonable amount, to help the communities in the rehabilitation of the environment and the promotion of new industries.
The existing tax system are the fees for investors from outside, concluding with local governments on a regional scale in the business, still too low. In addition, large corporations and conglomerates maximize often through in-house cost allocations and other measures profits. Thus, they reduce their tax payments and other charges, to which local governments rely. Under such circumstances, conflicts between large companies and local governments inevitably. But if the proceeds go to the Central Government, can get these through transfer payments spread evenly over the land or return directly to the Local Government, be exploited in the management of natural resources area.
The consolidation of the industry through restructuring should not wavered; the leading position of the central government in tax collection and allocation of public funds should not be changed; and market-oriented activities of large companies should not be disturbed. Under these conditions, we should ensure, through adjustments in taxation for, that local governments are able, benefit more from using their land by industrial-scale mining operations. A win-win situation for both large companies and for the communities can only be achieved by taking appropriate measures.
In addition to restructuring the industry, we should turn our attention to the question, as other countries reduce these raw materials. China's rare earth resources account for only forty percent of global reserves. If foreign resources are not degraded, is China's rare earth industry sometime in the future suffer a burglary, incapable, maintain a sustainable development.
If we do not consider the Seltenerdminerale from abroad, Our goal is, to raise prices for rare earths and improve returns for our rare earth industry, even the rare-earth industries in other countries use. Now that China has intensified in recent years in control of their rare earth exports, Other countries have 200 Projects to develop their own reserves of rare earth brought to life. Particularly in the United States is in the Mountain Pass, California - the largest Seltenerdmine the country - the resumption of production with an annual capacity of 10 000 Tons expected.
Of course, many countries are selling their rare earth reluctant, primarily, because these commodities have become a coveted commodity. In order to gain a competitive advantage over global competitors and to maintain its control over the market for rare earths, China must release its first- and cleaning techniques as well as its processing technologies to develop.
The splitting of rare earth elements in their chemical components is very difficult because of their similarity. The process requires both time and expertise. The most difficult is the separation of praseodymium and neodymium. Some foreign companies had a monopoly in these technologies, China was reduced to the role of exporter of rare earth-containing ore and slag.
China has been trying for its first trials in 1972 for the separation of praseodymium and neodymium, to get this problem under control. Led by Xu Guangxian, a member of the Chinese Academy of Sciences, Chinese scientists successfully developed the most advanced extraction technology in the world cascade, and ended the monopoly of the western countries in this area.
With this advanced technology, China has almost reached the level of Western mining companies for rare earths. The high-purity rare earths from China have captured the global market. As a result, prices were lowered in the international market by thirty to forty percent. Under this "China effect", some Western countries, which had monopolized the world market for rare earths long, production restricted or stopped, and some have sought the cooperation with Chinese enterprises.
If China seeks cooperation with other countries, it should hold on to exclusive ownership of rare-earth company, for control of the separation and purification of rare earths to maintain and strengthen and protect China's core technologies in this area effectively.

8 In China, a trade association for the sustainable development of the sector in order

At the 08.04.2012 in China have formed a trade association for the sustainable development of the rare earths. The association consists of 155 Members from the entire industrial chain of the rare earths. Some members are real heavyweights in the industry, wie die Aluminium Corporation of China oder die China Minmetals Corporation. The duties of the association is lower than other, to establish a reasonable pricing system for SE. Furthermore, should the illegal exports from SE to brake from China, Environmental standards are established and the disputes with foreign companies and governments to be settled.
In the opening ceremony, the President of the Association, Gan Yong: "Many countries have REE. The rest of the world should not only allow China to do the dirty work ".
The U.S., The EU and Japan believe, that the real reason the founding of the association is found in a deliberate centrally regulated control of the market through SE China.

9 Focus on essentials

An investment in the market for rare earths offers well-informed investors to be a high chance of winning. In order to utilize the existing potential, However, investors should consider some key success criteria:

a) Short, fast ways: Focus on Projects, what to do without expensive infrastructure. The most economical and most trusted source for rare earths is the mineral monazite, which is primarily found in heavy mineral sand deposits. Since the production of SE-concentrate without detours directly possible from this mineral is, eliminates a lot of expensive precursors and related problems. The time from exploration to marketing, thereby reducing from five to seven years, approximately. 18-24 Months.

b) Heavy rare earths: Focus on producers of heavy rare earths. The demand for the light rare earths is very likely in a few years ago to be covered by new producers outside of China can. The offer forecasts for key, heavy elements such as e.g.. Dysprosium (Two), Terbium (Tb) However, the long term remain highly critical. This is where great opportunities for small-SE projects with appropriate resources and access to the necessary know-how.

c) Long supply chain: Remove focus on companies which not only rare earths but also process it into high-quality end products can. The largest value in the business of rare earths only upon their degradation in the process of separation and the production of high purity oxides and metals. The necessary know-how but is still almost exclusively from China. A fact, projects with the Chinese joint venture partners a distinct advantage.

d) Marketing to measure: Focus on companies with experience in the marketing of rare earths. Each user of SE-oxides and metals is very individual, specific requirements on the purity of the individual elements of the SE, which are defined by the particular application. The economic success of a company SE thus depends crucially on his marketing experience. A close collaboration with customers on a technical scale, long-term contracts are essential for success.

and) Networked management: Focus on companies, run by managers, years of experience in the rare earth bring business. Lead to the SE projects to success, have a variety of difficult hurdles to overcome – from the recruitment of some existing experts on the negotiation of operating licenses (a great and often insurmountable stumbling block for many projects, incurred since the processing of the rare earths always radioactive by-products such as thorium and uranium) to the procurement of capital, and gaining strategic partnerships. Who here can rely on a proven network, comes closer to success in any case, even a large piece.

f) Upside potential: In recent years, many rare earths are several public companies 100 Percent rocketed upward. The Usual Suspects, wie Molycorp, Lynas, Great Western and Avalon are behind most of the trip is already. They have a market capitalization of several hundred million amounts; Molycorp and Lynas are now worth even a few billion €. On the other hand, many new corporations in the field of rare earth came to jump on this train of euphoric investors. Many of them have up to now no real value, the rudimentary given the market capitalization could justify. Caution is warranted. The Institute for Rare earth and metals e.V. gives you information about Werthaltigkeiten.

10 About the Institute of Rare Earth Metals and e. In.

The world economy depends on oil. This fact was realized at least with the oil crises of 1973 and 1979 . In the same proportion,, as much as the awareness of the scarcity of oil increases, , so does its price..
However largely unconsidered, we have actually fallen into a second dependency - of the so-called Rare Earths for a long time: In fact 17 these 17 difficult to obtain metals are required in many high-tech fields, from cell phones and LED TVs for the modern medicine to electrical - and Hybrid engines, that are intended to solve the mobility of oil. Today, the Rare Earths are among the most valuable raw-materials in the world.

Likewise, the largest supplier of indispensable elements is by far China. Moreover, similar to the Arabic states with oil, the People’s Republic wholly has the market in hand. Although, China has drastically reduced the export quotas for rare earths in the past, a further reduction is going to be announced in the near future. The reason for this monopoly, among others , is that China has not considered the reduction of environmental impacts yet. As a result, air, soil and water will be inconsiderately polluted.
In order to break this dependence to Chinese exports on one hand, and on the other hand, to encourage others to an environmental friendly mining, the Institute of Rare Earths was established. We consider ourselves as a consultancy and networking platform. In addition to comprehensive information on Rare Earth, we offer professional research analyses, mining projects and equity investments. This institute aims to bring , suppliers, customers and investors together, in order to tap the critical economic resource of Rare Earths outside of China as well.

The headquarters of the Institute of Rare Earths and Metals Association. in Dusseldorf. Under its charter, the institute is a nonprofit organization, may earn a profit of. The founding members are drawn from the fields of economy, Mining, Electronics and manufacturing industries in Germany. In addition, the institute from an expert team, the Board, supported by the rare earth region.

11 A recommendation of the Institute of Metals and Rare Earths

Given the current development of the above SE-market, the Institute of Rare Earths and Metals Association. SE young company recently examined:
Of the total 220 listed companies, that are active in the SE market, more than half are worth less than their cost has website. Nevertheless, the Institute of Rare Earths and Metals Association. a handful of highly interesting projects visited, analyzed and presented. For further information please contact the Department of Rare Earth ( a.uhlendorff @ institutselteneerden.com ).

12 A challenge for ambitious investors and investment advisors.

Since there will be for the rare earths in the longer term no alternatives, the demand for these critical metals in the coming years, rising steadily. The battle for market share is more and more towards the heavy rare earths, Know-how transfer and integration of downstream production stages. The understanding of these complex and dynamic relationships sets of investors and advisors ahead of a great personal interest and commitment. Rare earths are an area for people, looking like challenges, where you can create lucrative potential through knowledge and experience - a challenge for you?

Authors:
Arndt Uhlendorff, Institute of Rare Earth Metals and e.V., Dusseldorf
Andree Löschke, GIA Board of Industrial Consulting Ltd., Wipperfürth

Link to Online Articles:
http://institut-seltene-erden.org/wp-content/uploads/2012/05/sAnlagebrief_spezial_2012_09.pdf

Links REE:
www.institut-seltene-erden.org
www.edelmetallinstitut.com
www.oeko.de
www.techmetalsresearch.com
www.ree-investor.com
www.roskill.com

Rare earth: The new star in the sky commodity. What you should know about your customers and consultants of 1

Rare earth: The new star in the sky commodity. What you should know about your customers and consultants of 2

This entry was posted in Rare earths General and tagged , , , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply