RE:Re Conversations: Mark on present/future Ucore possibities This is clearly consistent with this post from December. The plan is set and things are progressing nicely. See post:
By Peter @Newton Bell, 12 December 2016
Back in 2015, Ucore Rare Metals secured exclusive rights to use an advanced separation technology for production of rare earths. That was a big win for their Bokan project in Alaska, which is a rich source of the heavy rare earths that are a source of geopolitical tensions between China and the USA.
Ucore also secured exclusive rights to use the separation technology from IBC Advanced Technologies to produce any metals from mine tailings or other waste sources.
In our recent interview Mr. Jim McKenzie, CEO of Ucore, told me: "There are over 60 fully-developed ligands in the existing IBC catalogue." And the implications of that statement are simply mind-boggling: Ucore effectively faces an opportunity where they could produce most of the metals in the periodic table. It seems that the company will be able to position itself around whatever metal comes into fashion next.
How will Ucore possibly determine which metals they should pursue first?
Well, on December 7th, Ucore released news that starts to show how they will exploit the large opportunity in front of them. The key piece of new information was simply this:
"Phase One of the SMC development will focus on the extraction of high purity PGM’s from supply sources within the recycling sector."
Great, now we know where Ucore is going to start. But, why platinum? Is that a good place to start?
After surveying platinum markets, it is clear to me that Ucore made a good choice.
The PGMs have a well-established market with a good macro backdrop: there are diverse sources of demand with large potential for growth in current and new uses, but a highly-concentrated source of supply that has risk of potential disruption. There may even be a perfect storm coming in PGM markets similar to the kind I learned about recently in the zinc markets here.
What's more, PGMs seem to be in play in the USA now following the proposal of a major acquisition of Stillwater by Sibanye, a South African gold mining company that is aggressively expanding into platinum. The US-based Stillwater has a platinum-palladium mine with high quality ore, a low-cost profile, and a stable geopolitical setting. In fact, Stillwater has one of the largest PGM recycling operations in the world, which also suggests that the PGM recycling industry is alive and well in the USA.
Recycling of platinum, in particular, is responsible for over 20% of global annual production, worth approximately $2B USD. This is a well-known business that commands respect from participants and it's a good place for Ucore to start because it allows them to compare their achievements against clear industry benchmarks.
Ucore is at a stage where they need to prove their ability to use MRT commercially. It is appropriate to do that first in a well-developed market, like PGMs, because it reduces execution risk. Ucore will be able to leverage the experience of their partners, whether it is suppliers of PGM recycling materials, buyers for their metals output, or even the team that is helping design the facility.
Furthermore, starting with well-known metals like PGMs will help Ucore reduce the perception of execution risk a priori by reducing the number of unknown variables in the venture. It will also help reduce perception of risk ex post by allowing them to compare their achievements against reliable benchmarks in the PGM recycling industry.
In other words, starting with PGM is a good idea because it is the smallest possible step forward. Ucore is only changing one thing in the standard PGM recycling business -- substituting MRT for solvent extraction, as I understand it.
After they demonstrate their ability to successfully change the game for PGM recycling, then Ucore can move on to more ambitious goals. Phase Two will focus on REE Processing, using "magnet manufacturing refuse, swarf, and end-of-life electronics sectors" to produce REE inside the USA. That will be a much more interesting story because it means working on two new things: a new processing technology and a new commodity. That will mean different things to different people and I can't wait to see what happens there.
As Mr. McKenzie said in our interview: "If you look at the oil sands, the coal-ash in West Virginia, the iron mines in northern New York, there are tremendous hidden assets in terms of their tailings. You need powerful, new technology to take advantage of those assets and that's what we have... In any event, 2017, in our estimation, is going to be the launch year of our licensing program." Best of luck, Ucore. From Peter Bell.