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Rare Metals Bonanza

Posted by Brian Hicks - Wealth Daily

on Saturday, 13 February 2010 3:08

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It’s a small chunk of land, about half the size of Rhode Island, located in a part of the world most people know nothing about.

The heads of Toyota, Honda, and the Pentagon all share a common interest.

But they’re not the only ones watching. Venture capitalists, hedge fund managers, and resource companies from all over the globe are also watching and waiting. . . ready to pour billions into Greenland once they get the green light.

Why?

This coming January, when the Kingdom of Denmark relinquishes sovereign control over Greenland’s natural resources, the world’s biggest deposit of Rare Earth Metals (or REEs), will fall into private hands. . . for the first time ever.

This single site boasts deposits valued at an estimated $1.3 trillion. . . and yet, REEs are worth more than just money.

Which is why the world’s leading manufacturers of hybrid cars, wind turbines, batteries, and yes — even the guidance systems to our most sophisticated air and ground defense missiles systems, are watching the events in Greenland unfold with baited breath.

The elements that fall into the category of Rare Earths include:

  • Lanthanum – essential in the production of electric car batteries;
  • Terbium – without this element, high-strength magnets would not exist;
  • Erbium – makes possible a wide range of light-weight, high-strength metal alloys;
  • Thulium – makes high-frequency lasers a reality.
  • And once Greenland takes control of its mineral wealth, this land — totaling barely 800 square miles — is projected to supply 25% of the world’s entire REE market. . . for half a century.

To companies like Toyota and Honda, that have virtually staked their futures on the rapidly expanding hybrid/plug-in car market, and to our own defense industry, which cannot perform even the simplest task without highly-involved electronic assistance, this news could not have come at a better time.

Because for the last decade and a half, our greatest and most populous modern rival has been hard at work to corner the market on these vital elements.

And on April 17 of this year, with the signing of a single contract, the Chinese reached a record 96.7% global market share.

China’s “Dragon Metals”

That’s why we’ve dubbed these commodities “Dragon Metals,” because China literally owns that market.

This is the kind of monopoly that has caused emergency Congressional meetings in the past. . .
Meetings that have ended in government-mandated intervention.

But there is nothing Congress can do to stop the Chinese government from closing its global stranglehold on materials without which the modern world cannot function.

It’s part of a plan that Deng Xioping claimed almost two decades ago would: “Do for China what oil did for Saudi Arabia.”

Evidently, the People’s Republic is wasting no time in putting this advantage to strategic use.
Plans to limit exports and systematically inflate prices have already trickled down from the party leaders, and progressive decline in production has been standard operating procedure for the past several years.

According to Wired Magazine, “China’s Ministry of Industry is weighing a total ban on exports of terbium, dysprosium, yttrium, thulium, and lutetium — and may restrict foreign sales of other rare earth metals.”

This news is a potential death knell for hybrid manufacturers that have forecast 500% growth in the next 6 years alone. . . alongside a wide spectrum of other cleantech companies whose products depend on magnets, motors, and batteries to create and store energy.

Not to mention a political and economic nightmare for our Department of Defense. . .

However, as Greenland prepares to open its resources to the open market, this Chinese monopoly has finally met a foe it cannot easily topple.

Come January, a single company will control this massive deposit, turning it into the world’s second biggest single producer of REEs.

With a stock price just under 60 cents today, this company has already gained close to 30% since the start of September. . .

But the big spike is still just around the corner, with a vast majority of the gains still in the future.
In the next few weeks, we’ll be publishing specific approaches to squeezing the most mileage out of this historic stock, as well as more information on an approaching commodities boom that may be the biggest we’ve seen in decades.

Profitably yours,

Brian

P.S. Rare Earth Metals and other commodities vital to the developing electric car and battery markets and Uncle Sam’s own defense industry should be on every investor’s radar. And as current energy prices continue to rise, we find ourselves in the early stages of the greatest commodities bull market in history. . .

 

Just as gas powered autos have depended on oil for the past 100 years, the world’s future fleet of electric vehicles may very well depend on a strategic element mined in a primary capacity in only a handful of locations. This essential element is cobalt.

Cobalt (Co) is a hard, lustrous, silver-grey metal that based on its unique properties has many applications. Although cobalt has been used since ancient times to impart a rich blue colour to glass, glazes and ceramics, it wasn’t until 1735 that the free metallic form was prepared and discovered. Since then, the applications have been varied and the element has played a significant role in industrial uses, the hi-tech industry, medical uses, environmental operations and strategic purposes.

There has been growing momentum in recent years around environmental sustainability and as the socio-economical impact of environmental issues rises, green initiatives have become a global focus.

Cobalt is an element of critical importance to the future energy economy due to its critical role in rechargeable Lithium-ion batteries. The primary use of these batteries is in Hybrid Electric Vehicles (HEVs). Due to escalating gas prices and concerns around fossil fuels more and more nations have recognized the importance of HEV production. HEVs not only reduce air pollution but also cut back on fuel consumption by more than 50% compared to conventional vehicles. This trend has increased HEV production on a global scale with an estimated 8 million units by 2015, thereby increasing annual cobalt demand by nearly 22,000 tonnes/year. The HEV also offers a more environmentally friendly “plug-in” which includes an extra Cobalt-bearing battery, further increasing cobalt demand.

Although some primary Cobalt operations do exist, supply generally comes from the byproduct of Nickel and Copper production and has varying degrees of cost dynamics. A large portion of Cobalt is produced in the Democratic Republic of Congo (DRC) and Zambia as such a byproduct. Puget Venture’s Werner West Cobalt mine is one of the few cobalt resources aiming to be a primary cobalt operation. Werner West is located in the geo-politically stable and progressive jurisdiction of Ontario, Canada.

Puget Ventures has strategically positioned itself in the forefront of the Cobalt industry to supply the growing demand for this essential resource in the near future.

COBALT AT A GLANCE

Chemical Symbol Co

Atomic Number 27

Description Transition Metal

Properties Shiny, grey, brittle metal

Atomic Weight 58.9332

Density (g/cm2) 8.90

Melting Point (K) 1768

Boiling Point (K) 3201

Av. Abundance 25 ppm

UNIQUE PROPERTIES MAKE COBALT AN ESSENTIAL ELEMENT

• High melting point (1493 *C) and retains its strength to a high temperature
Applications: Cutting tools, superalloys, surface coating, high speed steels, cemented carbides, diamond tooling

• Ferromagnetic (nickel and iron are as well) and retains this property to 1100*C, a higher temperature (Curie Point0 than any other material
Applications: Alnico magnets, recording tape, soft magnetic materials, saarium cobalt, NdBFe + cobalt

• Produces intense blue colours when with silica
Applications: Cobalt Blue in paints, glazes, enamels, etc.

• Multivalent
Applications: Catalytic action is enhanced –OXO reaction, Fischer-Tropsch, oil desulphurisation, paint and ink drier, tire adhesives

Cobalt’s green applications extend beyond rechargeable batteries and hybrid vehicles and into the following sectors:

• Renewable Energy
– solar panel technology

– wind generation (turbine blades),

• Emissions Control
– oil desulphurization

– gas to liquid technology

• Digital Revolution
– Cell phones and PDAs

– Computers and electronics

We have compiled a list of about 100 diamond companies and explorers so far. They are all listed in alphabetical order. If your company is not listed, just email us with your URL, a bit of info and your stock exchange code. We will get you listed right away.
If you are a junior diamond company and would like to be featured on juniorminers, just contact us and let us know.
A-E F-K L-P Q-T U-Z

Diamond Companies & Explorers
Until the 1990’s junior miners really didn’t do much diamond exploration. There were a few in far out of the way places, but most juniors were pre-occupied with precious metals. But in the early 90’s that all changed. The discovery of diamonds in Canadas north, in the NWT sent the junior mining industry into a frenzy. Litterly hundreds of companies large and small staked out claims and started exploring for diamonds.

These days things have slowed down somewhat although there are still juniors out exploring the north. While some have stumbled onto new finds of nickle or uranium, there are those who are still in seeking the ever illusive kimberlite.

A lot of juniors have left the north to explore for other minerals or have headed off to places like Botswana or Australia. There are even some companies exploring the country of Greenland for diamonds.
We like to trade diamond stocks and have done quite well at it in the last few years. If you would like start trading diamond stocks you can search from our list then analyze that stock using technical analysis. We offer a free service here.

A Bit About Diamonds
Diamonds have assumed a range of symbolic meanings throughout history, including the historic notion that diamonds bestowed mysterious powers of protection and healing upon the elite few who possessed them. Widely renowned and commercially prevalent today, diamonds are now commonly associated with wealth, status, and love.

A diamond is the most concentrated form of carbon, the element essential for all forms of life. The diamond is differentiated from other substances comprised of carbon due to its unique crystal structure, which identifies the bond among a repeating arrangement of compounds or elements that produce a solid entity. In fact, the diamond consists of the strongest chemical bond known today, lending to the diamond’s exceptionally resilient properties.

The natural process through which diamonds form adds mystique to their enchanting allure. Diamonds typically form deep within the earth where there exist conditions of extreme heat and pressure, with evidence suggesting that diamonds have formed hundreds of miles below the earth’s surface. Temperatures in excess of one thousand degrees Celsius and pressure of at least fifty kilobars are conditions necessary for diamond formation, with the atmospheric pressure at sea level measuring just one kilobar. In some cases, diamonds form at shallower depths which exhibit abnormally high levels of pressure, though the quality of these diamonds is generally lower than those which form deep within the earth.

Diamond deposits that are large enough for mining are generally located in cratons, which are vast areas of the earth’s crust which have reasonably stable properties and cover a large percentage of most continents. Cratons consist of a substantial crust with roots that extend into the earth’s mantle below. Diamonds are transported to the earth’s surface by magma, or liquid volcanic rock traveling through these roots, which cools and hardens as it reaches the cooler temperature of the earth’s surface. During this hardening process, cone shaped diamond deposits materialize, named kimberlite pipes after Kimberley, South Africa where the first kimberlite pipe was found. While diamonds are occasionally discovered in meteorites and different types of rocks, most diamonds have historically been found in kimberlite pipe deposits.

The value of the diamond extends far beyond the exquisite beauty that makes it popular for use in fine jewelry. The hardest substance known to man, diamonds can also withstand extreme pressure and shock, making them valuable for industrial use in tools for cutting, polishing, drilling and grinding. Flawed diamonds that are not suited for jewelry as well as synthetic diamonds are often designated for such manufacturing applications.

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