Future Alternative Energy Resource Supply
I put together some of the more salient points (emphasis is mine) from a Jack Lifton post from this informative REE blog (linked below).
Here's what we know: China controls over 60% of the world's refined indium production. The main commercial sources of indium are zinc concentrates, a byproduct of sphalerite mining. Global recessions really hit base metal production hard as we've just seeing the past few months in a lot of existing copper and zinc production being curtailed. In addition to the shelving of new base metal projects. Less zinc, obviously means less indium coming to market.
That not to say "The Great Recession" isn't hurting indium demand and its pricing. Demand for LCD displays, for example, a relatively new application for indium, has of course come down significantly.
But that's today's "page one" Story. Tomorrow's headline, which can be read on page 16, is that a substantial future demand will be coming from clean tech application with solar power'sCIGS technology being a prime example.
As you read, ask yourself this: Would you like to be holding what is probably the world’s largest area of premium indium exploration targets? And an indium source that is potentially not a by-product and thus relatively independent of zinc pricing?
And, crucially, the Mount Pleasant camp is an non-Chinese source and in a politically secure area of the world.
Geodex is undervalued on its flagship Sisson Brook project alone. How much future value will eventually accrue to their Mount Pleasant West acreage?
If you read nothing else, read the highlighted bit in the last paragraph...
On March 20th, the New York Times reported that ”The U.S.Department of Energy has tentatively awarded its first alternative-energy loan guarantee, breaking a four-year logjam in the federal loan program.” In this regard, did anyone at the US DoE, examine the long-term consequences of decisions involving the supply and demand for technology metals in awarding a US$500 million loan guarantee to a CIGS thin-film solar panel builder?
CIGS technology is critically dependent on the supply of not only (C) copper, but also of (In) indium, (Ga) gallium, and(Se) selenium.
"...the US is
totally dependent on foreign sources for indium and gallium.
Furthermore, gallium and indium along with selenium are
only produced as byproducts of zinc, aluminum, and copper base metal production, and are only present in newly mined base metals. Even then, they are only recovered if and when those metals are processed at added costs.
Ultimately, these by-products, which are part of a group of the minor metals that I call the ‘technology metals’ without which no country can maintain itself as a high-tech economy.
USGS data indicates that, for gallium, world production of new metal in2008 was estimated at 95 metric tons and US consumption at 48.4 metric tons, more than 50% of the world’s production!
For
indium, the figures are 568 metric tons total production and 160 metric tons U.S.consumption. In other words the US
consumed nearly 1/3 of the world’s new production of indium just last year!
The production of thin film photovoltaic solar cells using CIGS technology will
increase the demand for gallium, indium, and
selenium,which will need to come from new production sources. Existing supplies are known not to be in surplus, and are basically by-products, which are only produced if and only if the base metals in which they are found are produced and processed to recover them.
My concern and argument is that the demand for the technology metals such as gallium, indium, and selenium has very little in common with the demand for their source base metals: aluminum, zinc, and copper,but the supply of these technology metals is almost completely dependent on the supply of those base metals.
Has it occurred to the DoE or its Canadian counterparts to examine Canadian mining data to see if it might be worthwhile to
consider guaranteeing mining development loans or off-take agreements to Canadian companies that can produce gallium, indium, and selenium from the associated mining of other minor and/or precious metals?