Short supply on Rare Earth. China limited exports or rare earths elements, China has around 95% Rare Earth Element resources. Alternative sources are missing. On July 9th, 2010 announced the Department of Trade of China for the second half year 2010 an export contingent of 7’976 tons. For 2010 will the export be limited to 30’259 tons = 40% below the 50’145 tons in 2009. Furthermore is the quantity in the second half year 72% lower than the 28’417 tons in the second half of 2009. The China’s Ministry of Industry and Information Technology intends to discuss a draft for an export ban of different Rare Earth Elements such as for Terbium, which is used for low-energy light-bulbs. Even so for Neodymium used among others in Hybrid cars. Each Toyota Prius uses 23 pounds of rare earth elements. Cerium and Lanthanum are used in catalytic converters. See rare earth applications
In the edition for the 4th Quarter 2010 or later in the issue for the 1st Quarter 2011 we come back again on Greenland Minerals and Energy (GGG). Until then we know if the company got their permission for the sole mining of uranium in Greenland. Assuming this will be the case – and the metallurgical side (separation of uranium from rare earth) is feasible – the GGG shares will massive win on value. Mid of July 2010, I met Rod McIllree (Managing Director of GGG) in Geneva, some days after the successful small capital raising at institutional investors. Rod is persuaded, that the political problems (metallurgical problems don’t exist according him) will be solved until end of the year.
Greenland Minerals & Energy (GGG:ASX)
One of the largest projects of Rare Earth on the planet now underway. To read about the difference between Rare Earth Elements, Light Rare Earths vs Heavy Rare Earths see (pdf) Rare Earth Industry Overview recent article in Industrial Mineral magazine . The Chinese may be able to “flood” the market of Light Rare Earth but not that one of the high priced Heavy Rare Earth market. Leading are the Chinese there with the Bayan Obo Mine in Inner Mongolia. But just after Bayan comes Kvanefjeld in Greenland.
Comparison of significant Rare Earth Deposits
Name of deposits RE in mio. tons part HRE Total HRE in mio tons
Bayan Obo (China) 56 2% 1,12
Kvanefjeld (Greenland) 2,6 l4% 0.364
Mountain Pass (USA) 1.8 1% 0.018
Nechalacho (Avalon/CA) 1,3 20% 0.260
Mt Weld (Australia) Lynas 1,2 3% 0.036
Nolans (Australia) 0.9 4% 0.036
Dong Pao 0.8 n.a
Bear Lodge (USA) 0.4 n.a
Hoidas Lake (Canada) 0.04 7% 0.0028
Concerning HERE – GGG has rare earth resources on Terbium Oxide – Dysposium Oxide – Yttrium Oxide in larger quantities and Europium Oxide and Gadolinium Oxide in smaller proportions. On the internet page of the competitor Lynas – you will find precise indications where Rare Earth are used.
Rare Earth prices in US$ per kg
See details on German version enclosed.
Greenland Minerals & Energy has through the most recent capital raising (6 million A$ – placement of 17’647’060 shares at A$ 0.34) over 9 million cash reserves. Therefore can the 10’000m drilling programme been started. 6’000m are in the new high mineralized zone, 6kmSouth East of Kvanefjeld. In addition, an equity facility has been established with US-based YA Global Investments (Yorkville) that provides GMEL with the option to draw down on a $15M facility at any time over the next five years. This equity facility will be used slice for slice against the emission of GGG shares at a higher price. But certainly not earlier than 2011. The final bankable feasibility study starts in the first quarter 2011 and will be finished in the 4th quarter 2012. GGG reckons with a yearly output of 15-20% of the global Rare Earth world production. Thanks to uranium as by-product to unbeatable prices. GGG has 61 per cent on the Kvanefjeld uranium/rare earth project. The remaining 39% holds the Joint-Venture partner: Westrip Holding Ltd who may be ready to sell his stake at a certain price. In order to pay this amount needs GGG the participation of a commodity giant. It can be assumed that for such an elephant project the interest will be very high. However that may not happen before end of 2010 at a time when all official approval from the Government of Greenland are granted.
We put all our recommendation, made end of May 2010 on hold with the only exception of Greenland Minerals & Energy which we recommend to buy on current share price level.
Marcel R. Ewald,
Consulting – Marketing
CH -5073 Gipf-Oberfrick