Metals News with an overview of the rare earth metals market and his ideas for the future. Said Lifton, “There are about 300 (rare earth) companies now. There are going to be, in my opinion, by 2015 about 15 of them. I think there will be 15 survivors of the cull.” Lifton believes that companies will be cut due to changes in the market. He said, “Capitalism works brilliantly. There was perceived demand and supply. Today, we've overdone it something fierce.” There are so many rare earth companies that even Lifton has trouble keeping track of who is who. Said Lifton, “I can't keep track of them.
Instead of looking at company names, Lifton looks at a different set of metrics. Said Lifton, “I look at the deposit and the difficulty of extracting the deposit. As I mentioned in my talk, Avalon's deposit is the largest in the world. However, it is a billion dollar headwind. You have to build stuff to take it away and to process it.” Avalon is not the only company facing these types of challenges. Lifton said, “All of the juniors are up against the same problem. What do we do with the concentrate? You have a pregnant leech solution – pregnant with metal values. The question is: Will it ever give birth?”
These types of issues are ones that have to be solved in order to move the market forward. Said Lifton, “Economics drove the rare earth industry to China. By 2004, there was no more supply chain in the US or anywhere. In China, they accepted solvent exchange since 1978. They have had quite a bit of progress.” Lifton's study of solvent processing has revealed that there is little or no technology available outside of China, “There is no readily available solvent exchange for anyone else except for China. There are some new technologies for solvent exchange, but they haven't happened yet. There are some developments that are very intriguing. Solvent technology, in my opinion, will get cheaper fast.”
The need to develop solvent technologies is demand driven. Said Lifton, “The automotive industry wants to pay the least they can. If we can't lower the prices, they will either substitute away or go back to older technology.” The choice to go back to older technologies that don't use rare earth metals would be a costly one for both the automotive and the mining industry. Lifton said, “If they have to re-engineer, they will never go back to [rare earths]. Mining companies have to cut costs. Mines that come in at a couple hundred million dollars with fifty million dollars worth of processing to convert rare earth minerals to usable forms are the winners. Look for the low cost plans, except for the heavies.”
Because of the demand for the heavy rare earth metals, Lifton believes they are the exception to the rule. Lifton forecasts that dysprosium, terbium and yttrium will only go up in price while neodymium will correct to $100 per kilogram by mid decade. In addition, Lifton believes that cerium has no value and that lanthanum will correct to $40-$50 per kilogram.
In terms of who will “win” in the rare earths race, Lifton said, “We're talking about regional winners here. Tasman is the winner in Europe. AMR it is currently based in Toronto and will be a public company next year. The Turks have been at this for a while and have it down pat. They export chrome. I'm very high on that company. Ucore will be the first to come into production in the US, then Rare Earth Elements. Great Western will be first in Africa. Northern Minerals in Australia looks pretty good.”
Lifton is currently recommending Avalon, Great West, and Matamec, though they face challenging chemistry. In addition, Lifton believes that Rare Element Resources offers a better set of deposits than anywhere else in North America and boasts great management. Tasman has the richest deposits of heavy rare earths and is permitted with governmental support. Lifton believes that Ucore Rare Metals will begin producing in the next twelve to fifteen months and they have a deposit that is exceptionally rich in heavy rare earths. Said Lifton, “These companies can produce rare earths at lower costs than other companies. I just don't see the need for the rest of the companies.”
Lifton bases his information on the ability of mining companies to separate rare earth component parts. Said Lifton, “I'm basing my opinions on the separation process. There has been significant progress. In my opinion, the roadblock is the separation technology. They just don't know where to get it. Some of them have found it; some are developing it – like Moly Corp. Other than that, who is going to do that for them? Fortunately, rare earths are moving to the next plane. Those who can produce the lowest cost are the winners. Smart is better.”
Overall, in terms of the mining industry, Lifton is watching copper. He said, “[The manufacturing] industry is far more worried about copper supply than rare earths. If I had to choose the most critical environment it would be copper. You've got dramatic potential for mining in California, but it has been cut back. These guys are not fighting science, they are not fighting the environment, they are fighting the regulatory atmosphere.” The situation is serious and worth consideration by Washington and state lawmakers, according to Lifton, “We are coming to a choke point here. If you ever want to have a supply chain in the US again, you'd better get cracking.”