March 30, 2012 (Source: The Australian) — There’s nothing like the convergence of two hot stories – in this case Mongolia and rare earths.
Add some fluorite (also in Mongolia) to the news mix today and we start pressing a lot of buttons.
Black Ridge Mining (BRD) was trading at 0.8 cents this morning after reminding the market that it has a rare earth project in the northern Asian country. Caution is needed: these are very early days, rare earths projects are devilishly difficult to bring on line and – if successful – that will take a very, very long time. (Remember, the Mt Weld mine now coming into production in Western Australia was discovered in 1970. The Dubbo zirconia-rare earth project, now in an advanced stage, has been continually worked on since the mid-1990s.)
The positive thing about BRD’s deposit – if it passes the due diligence process now under way – is that early data suggests it has the more valuable heavy rare earths, including yttrium (the latter looking to be in deficit at least until 2016).
BRD’s plan – like those of most of the emerging rare earth producers – is to offer an alternative to China, now a source of 97 per cent of the world’s rare earths. The junior would use its Mongolian deposit to target customers in the US, Japan, South Korea and India. Japan recently signed a free trade agreement with Mongolia to ensue supplies of minerals including rare earths.
The other bit of news out of Mongolia this morning is that Guildford Coal (GUF) has discovered fluorite – also called fluorspar – at its Middle Gobi exploration licence area.
Fluorite is used in metallurgy, ceramics, glass, aluminium and fluoro polymers. In 2009, the world reserves of fluorite were estimated at 230 million tonnes, and the largest deposits were in South Africa. About 6m tonnes are traded on the market every year, and China produces half of that and is also the greatest consumer. Since 2009, China banned the export of fluospar and prices have tripled to about $US600 a tonne.
Also in today’s news, we might soon start getting greater transparency in the rare earths space.
Toronto-based REE Stocks Co has launched three indices.
The REE Global Index will be calculated by Standard & Poor’s and will hold the 30 largest precious metals companies outside China, including Australian players Lynas Corp (LYC) with its Mt Weld project, Dubbo owner Alkane Resources (ALK) and Northern Minerals (NTU), which is building a large heavy rare earth inventory in Western Australia.
There will also be the REE Leaders Index calculated by FTSE International – the 15 largest companies outside India and China – and, also managed by FTSE, the REE Shariah Index for those companies compliant with Shariah rules.