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West dependent on China for key resources
Published: 22 January 2010 14:30 | Changed: 22 January 2010 14:31
http://www.nrc.nl/international/article2465570.ece/West_dependent_on_China_for_key_resources
China controls the world’s supply of rare earth metals. It might not be willing to share much longer.
By Piet Depuydt
An iron ore mine is western Australia.
Photo AP
A plaque hangs in the lobby of Baogang Group’s headquarters. “The Middle East has oil, China has rare metals.” The words are attributed to former Chinese leader Deng Xiaoping and have the force of an oracle for many Chinese.
China holds 95 percent of the globe’s ‘rare earth elements’, which are almost as essential to Western industry as oil. The export centre for these metals is Baotou in Inner Mongolia, where the Baogang group has its headquarters. Here, this state company produces nearly half of the world’s supply of neodymium. This metal is practically unknown, but it has fundamentally changed the appearance of consumer electronics.
“Without the powerful magnets developed using neodymium, makers of mobile phones and mp3 players would not have been able to carry out extensive miniaturisation,” says André Diederen of the Dutch research institute TNO.
At least 500 grams of neodymium is needed in every hybrid car to make the magnets in the engine work. The deep blue material is also an essential element for the latest generation of powerful wind turbines. A 16 metre high turbine produces an average of five megawatts of energy; about 200 kilograms of the metal is needed for every megawatt.
Technology cannot do without rare metals
Experts estimate that global demand for neodymium will rise by a factor of 3.8 by 2030. Demand for other elements in the rich earth of Baotou – cerium, praseodymium en lanthanum – has increased exponentially in recent years. They are not only used for numerous Western devices, such as energy efficient light bulbs or smart air-emissions detection systems, but are of strategic importance for Chinese industry itself. At least 60 percent of the rare earth metals extracted in Baotou are intended for Chinese use.
This creates concern in the market. “The Chinese government wants to do everything to secure the flow of these metals for their own industry,” says Michel Rademaker of the The Hague Centre for Strategic Studies. “They have imposed export quotas which get stricter every year.”
Last summer, an internal memo from the Beijing government was leaked which proposed that exports of rare earth metals should be limited in the following six years to 35.000 tons per year, far below expected demand. There report stirred commotion among industrial experts in Europe, Japan and the US. “It rubbed our noses in the facts,” says Derk Bol of the Materials Innovation Institute (M2i) in Delft. “Scarcity of materials suddenly became a real threat.”
If China really implements this measure, shortages of certain metals, such as terbium and dysprosium, are expected this year. One of these metals is used in the production of energy saving light bulbs, the other in lasers.
Global use has quadrupled
But even if this measure is not implemented, shortages are unavoidable. Global use of rare earth metals has more than quadrupled in the last years to 125,000 tons per year. Analysts expect demand to reach 200,000 tons in 2014, and, by that time, China will need all it produces for its own use.
“Chinese exports of rare earth metals will be reduced to zero over time,” says Christian Hocquard, economist and raw materials expert at the French geological service BRGM. This is a doom scenario for Western industrial experts. Numerous high-tech industries in Europe, Asia and the US will be without essential raw materials.
According to Hocquard there are only two ways to avoid this. “We relocate our factories to China, or open new mines for rare earth metals outside China.”
Western mines re-open for business
China actually has only 53 percent of world supplies within its borders. In the West, overproduction and low prices in the 1990s caused most mines to close. The recent increase in demand has overturned that situation. A kilo of neodymium goes for 22 dollars now, five times as much as in 2002. Dysprosium’s value is ten times what it was in 2002.
But it will cost a lot to reopen the old mines. A whole new industry has to be built. Mountain Pass in the US was reopened in 2007, but will only reach full production sometime this year. In Australia, the Mount Weld mine is expected to produce rare earth metals on a large scale from this year. But last year the company that owns it sold 51.6 percent of its shares to a Chinese company in exchange for cash and debt financing. The search for rare earth metals is a global race.
Europe has no role to play. It has no major deposits of rare earth minerals in the ground and must depend on the rest of the world for supplies. If China stops the supply, the EU will have acute shortages. Beijing’s party leaders deny that they intend to do that. China doesn’t want to hold the European industry hostage, officials stress. Around Hexi Industrial Zone, Baogang Group’s technology park, an active campaign is underway to lure European companies to open factories there in exchange for access to rare earth metals. Baotou hopes to expand into a giant industrial site where the raw metals are refined and converted into finished products. It wants to be the global Mecca of rare earth metals, and the West is welcome to take part in this.
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JNR Resources Inc. (TSX Venture - JNN) is a junior resource company currently engaged in the exploration and development of mineral properties in the provinces of Saskatchewan and Newfoundland. The company has a varied interest in several prospective uranium properties in the Athabasca Basin of northern Saskatchewan that have been and will continue to be the focal point of JNR's exploration efforts.
Background
In February 1997, with uranium prices on the rise and expected to increase substantially within the decade, JNR Resources began to acquire a significant land position in the Athabasca Basin of northern Saskatchewan. The Athabasca Basin is recognized as the most prospective uranium-mining district in the world. JNR's highly experienced technical team engaged in a systematic program by of prioritizing and staking targets based on geology, metallogenic models and extensive review of historical assessment records. JNR's early foresight of a strong uranium market enabled the Company to acquire its prospective ground long before the Athabasca staking rush and current exploration "area play".
JNR's holdings in the Basin include a 100% interest in 5 properties totalling 164,626 hectares, a 30,767-hectare joint venture with Denison Mines Corp. (Dension; formerly International Uranium Corporation) where JNR holds a 40% interest, and an additional 7 properties totalling 166,750 hectares in which Denison has the option to earn varying interests.
In Dec 2004, JNR entered into a joint venture agreement with Altius Mineral Corporation to earn a 70% interest in their Rocky Brook uranium property located in western Newfoundland. The property is approximately 11,000 hectares in size and features three distinct areas of un-sourced, altered and mineralized sandstone boulders with reported values of up to 11.5% U3O8 and 859 oz/t (2.9%) silver.
Technical Expertise
President & CEO, Rick Kusmirski, MSc, PGeo, has 30 years of experience in exploration in North America and overseas, and has actively participated in the discovery of a number of gold, uranium, and base metals deposits. Rick joined JNR Resources in 2000 and subsequently directed the exploration program that led to the discovery of the Maverick Zone on the Moore Lake joint venture property. Prior to joining JNR, Rick was the Exploration Manager for Cameco Corporation's uranium projects in the Athabasca Basin.
Heading up the Company's Technical Advisory Committee is Dr. Les Beck, PEng, PGeo, a world-renowned uranium expert and the author of numerous scientific publications dealing with uranium deposits in Saskatchewan, including, "Uranium Deposits in the Athabasca Region". Dr. Beck is the former Executive Director of the Geology & Mines Division for Saskatchewan Energy & Mines.
Rounding out JNR's technical team is Vice-President, Exploration, David Billard, BSc, PGeo, with 30 years of industry experience, including 12 years with Cameco Corporation in western Canada and the western United States. Irvine Annesley, PhD, PGeo, is Director of Exploration, with 30 years of industry experience including the past 19 as a senior research geologist with the Saskatchewan Research Council. JNR's Chief Geochemist, Ken Wasyliuk, MSc, PGeo, has over 20 years of industry experience including 16 years with Cameco Corporation, where he became an expert on geochemical and clay alteration patterns associated with uranium deposits in the Athabasca Basin.
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COMPANY WEB PAGE
http://www.jnrresources.com/s/Home.asp
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JNR RESOURCES INC.FILINGS & PUBLIC DOCUMENTS with SEDAR
http://www.sedar.com/DisplayProfile.do?lang=EN&issuerType=03&issuerNo=00003829
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SHARE STRUCTURE
Authorized shares: Unlimited
Shares outstanding: 88,645,505
Options outstanding: 4,150,000
Fully diluted: 92,795,505
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