Neodymium & REE Musings"The global annual production of neodymium, essentially all of whichis mined in China, is today at an all-time high," Lifton says. "Thereis no surplus -- the existing demand uses up all that's produced eachyear. So to build more wind turbines and hybrid cars, you'll need moreneodymium. Where are you going to get it?"
Kaiser's recommendation for AVL and for Quest are predicated on their
unique deposit concentrations of heavy rare earth elements (HREEs).
The Lifton quote above on wind turbines and hybrids is discussing
neodymium, which is a "light" rare earth element (LREEs).
If I were just looking at storng neodymium component for an REE play, I would focus on REE miners that have a
high TREO (total rare earth oxide) of which 97% to 98% of are LREEs. And. of course, list neodymium as the one of the deposit's most abundant elements.
Of the 15 lanthanoid elements, 5 are in the light category; 10 areHREEs. Scandium and yttrium are usually also considered rare earthssince they tend to occur in the same ore deposits and exhibit similar chemical properties.
Having said that, I've been doing some research of potential future demand of
indiviudal rare earths.
Victor Goncalves has written that
"...amount of rare earths that go into the battery is about 75-80% of the total amount of rare earths that go into the car."
He then goes on to note that
"in the batteries: lanthanum, and to a lesser extent cerium, praseodymium, and neodymium"...are the key REEs used.
He breaks down REE usage in by the engine and regenative braking systems as well. His blog can
be found here. I would caution, however, that Goncalves has mixed up a couple of facts before...bring your salt shaker...still this might be a good start for more serious DD.
Not only I'm I trying to ascertain which REEs will have the greatest future applications but, in the back of my mind, I'm also wondering that, given they are all lanthanoid based elements, is their a potential for inter-substitutibilty between individual REEs. In other words, if a particular application needs a rarer and most costly REE, can a one REE be substituted for another given their similar chemical properties. And such substitution might be "partial" as well.
REEs are also found together and have to be expenisvely separated. That makes metallurgical studies a crucial factor in selecting individual REE plays for your portfolio.
Sound complicated?
That's what I think. It's a lot easier to get your head around a gold or copper play as it's relatively easier to ascertain their respective supply and demand curves.
With REEs a lot the projected demand is coming from embryonic technologies which themselves are in fight for standardization of tommorrow's energy standards.
Take batteries as just one example. Will tomorrow's standard for hybrid and/or electric vehicles be a nickel metal hydride or lithium-ion model? How about the game changing potential of a new type of ultracapacitor like secretive EEstor is working on?
Believe as you will, but no one today has the answers.
I do know this: there some very serious money and people eons smarter than ThaiDiamond working in areas that aren't even covered in your typical resource newsletter. The kind of stuff that serious VC folks like
Kleiner Perkins and
Vinold Khosla are looking at today. A couple of the sources I'm following...to the degree one can.
Even more so, now that an Obama administration is funding billions of dollars in pure research...with no guarantees of commericial applicability.
Don't get me wrong: I do think REEs have a tremondous future in tomorrow's world. I added my first REE play to my protfolio in 2005.
But when Dines "screamed" in his recent REE issue where he told subscribers to buy all 5 of his recommendations in equal dollar amouts, he telling them to
buy the sector much more than any individual play.
Sounds like wise advise. A REE mini-portfolio within my overall commodity investments is certainly the way I'm going.