IM Rare Earths News in Brief 22 – 28 September

By James Sean Dickson
Published: Monday, 28 September 2015

Ossen revenues and income decline; TRER signs research contract with Defense Logistics Agency; Volkswagen emissions scandal could encourage rare earths consumption in catalysts and EVs.

Shanghai, China-based rare earth products manufacturer Ossen Innovation Co. Ltd has announced a year-on-year (y-o-y) decrease in earnings of 12.7% to $1.3m for Q3 2015.

The company’s income weakness resulted from a 28% y-o-y decrease in revenues, which fell to $25.9m in Q3. Weakness in rare earth-coated product sales led revenue declines in Q2, Ossen said in its last results, however, in this quarter, zinc-coated pre-stressed concrete steel products suffered more.

Liang Tang, Ossen’s chairman, said that the revenue decline "highlighted increasing challenges facing our business, as weak investment and trade, combined with high levels of volatility in the domestic stock market, negatively impacted China's already weakening economy during the second quarter".

"In light of the central government's plan to transform China's growth model from big-ticket projects to a 'more efficient, equitable and environmentally sustainable' consumer demand-driven economy, we expect China's fixed asset investment, a measure of government spending on infrastructure, will continue to expand at a slower pace in coming quarters and thus hinder our ability to grow our business," Tang added.

In the US, Texas Rare Earth Resources Corp. (TRER) has been awarded a broad agency announcement research contract by the US Defense Logistics Agency (DLA) strategic materials division (SMD).

Under the contract, TRER will conduct bench-scale research to produce purified yttrium, ytterbium and a third publicly undisclosed rare earth oxide (REO) using continuous ion exchange and continuous ion chromatography with its partner, K-Technologies Inc.

The DLA’s SMD is charged with "maintaining cognisance of worldwide strategic and critical materials supply chains from source to final assembly, evaluating the capability of these supply chains to support national defence and essential civilian industries, and developing mitigation solutions when access to materials is insufficient," according to TRER.

"TRER is committed to developing a reliable source of critical rare earths here in the US, as well as an effective means to separate them," Dan Gorski, TRER’s CEO, said.

ASX-listed Greenland Minerals and Energy Ltd (GMEL) has announced positive results from the first phase of rare earth refinery pilot plant research at Outotec Oyj’s labs in Finland.

The Finnish processing company ran the plant for around 250 hours, utilising mineral concentrate from GMEL’s Kvanefjeld deposit in Greenland produced in May by the company’s concentrator pilot plant.

GMEL said that extraction rates of around 95% were achieved, exceeding the feasibility study assumption level of 77%. Phase two will consist of metathesis, where by the residues from phase one are conditioned with caustic chemicals to allow step three re-leaching, after which product precipitation can occur.

In Canada, Vancouver, British Columbia-headquartered Medallion Resources Ltd has announced that a proportion of its previously announced private placement will be made available to existing shareholders owing to regulatory requirements.

Medallion’s maximum offering is for 7.5m units priced at Canadian dollar (C$) 0.03/unit ($0.0225/unit*) for maximum gross proceeds of C$225,000, whereby each unit is comprised of a common share and a share purchase warrant. The warrants entitle the holder to purchase one share per warrant at C$0.20/share until May 1, 2018.

The company intends to spend around C$75,000 on metallurgical studies and site selection for monazite processing; C$50,000 on feedstock sourcing work; C$25,000 on feedstock analysis and logistics; and C$50,000 on general and administrative expenses, with the rest set aside as a balance to working capital.

In India, once a significant rare earths producer, the country’s Mines Secretary Balwinder Kumar has announced the allocation of 80 offshore exploration blocks in the Arabian Sea and the Bay of Bengal for exploration of sand and rare earth minerals, according to the Business Standard.

The paper said that natural river bank and lake sand is becoming scarce owing to strong demand from large construction projects across the country and that the block offering was conducted to alleviate supply concerns.

Meanwhile Profit Confidential, a stock market forecaster and financial and economic analysis news site has suggested that the emissions scandal currently enveloping Volkswagen AG could signal brighter times for rare earths producers in the future.

The difficulty of shifting internal combustion engines towards lower emissions, laid bare by the so-called "defeat device" tactic utilised by the company, could result in renewed focus on hybrid and new energy vehicles, the site suggested.

Rare earths are consumed in the magnets of the electric motors used by electric vehicles (EVs). The set of technology metals are also utilised in emissions-cutting catalytic converters, which could be advantageous should additional environmental regulations be implemented.

*Conversion made September 2015