Battery ree companies to become dominant producers in the near...

Battery ree companies to become dominant producers in the near future.

The currentdominant design for electric vehicles (EV’s) batteries is lithium-ion, but theglobal R & D in battery design has not actually chosen the winner, with somany competing designs such as the Toshiba titanium/niobium battery.

However, in themanufacture of magnets, this global R & D drive was essentially put to restfive or more years ago after a period of intense scrutiny following theincredible price spikes following the cessation of all shipments of REE’s byChina to the world’s second largest market, Japan, which at that time, was thedominant magnet manufacturer. Needless to say, China now dominates the magnetmanufacturing world, but there were no commodities found to substitute for theREE’s in magnet manufacture in this multi-year drive.

The current riseof prices for the specific REE’s that are essential for the manufacture ofmagnets, makes complete sense if they are viewed with the requisite importancethat these magnets play now, and which they will play for the future of theworld. Rising REE prices should be seen as representing spiking global demandagainst major fundamental issues on the side of supply, but here following aretwo projects that both enjoy the fundamental characteristics that very fewprojects have, and which have allowed them both to achieve robust positiveeconomics.

Background

Within theperiodic table there lies a set of 15 metallic elements, (lanthanum, cerium,praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium,dysprosium, holmium, erbium, thulium, ytterbium, and lutetium) with atomicnumbers 57-71. Along with chemically similar scandium (atomic number 21) andyttrium (atomic number 39) these elements collectively make up what arereferred to as the rare earth elements or REE’s.  Scandium andyttrium are included because they tend to occur in the same ore deposits as thelanthanides and exhibit similar chemical properties.

REE’s and alloysthat contain them are used in many devices that are used daily such as computermemory, DVDs, rechargeable batteries, cell phones, catalytic converters,magnets, fluorescent lighting and medical technology such as surgical lasers,magnetic resonance imaging, and positron emission tomography scintillationdetectors. During the past 20 years there has been an explosion in demand forthese items – two decades ago very few people owned a mobile phone, but todayover 5 billion people own a mobile device. However, the manufacturing ofpermanent magnets represents the single largest and most important end use forREEs, accounting for 38% of total forecasted demand.

Rare earthcompounds are found in batteries that power every electric vehicle andhybrid-electric vehicle. As concerns for energy independence, climate change,and other issues drive the sale of electric and hybrid vehicles, the demand forthese batteries will likely climb even faster.

Although othersubstances can be substituted for rare earth elements in their most importantuses these substitutes are usually less effective and more costly.

While REE’s arerelatively plentiful in the earth’s crust with cerium being the 25th mostabundant element of all, economic REE deposits are very rare. For example,there are hundreds of good lithium projects but only a handful of good REEprojects.

The chemicalproperties of REE’s make them difficult to separate from surrounding materialsand from one another which makes them difficult to purify.

According to theUnited States Geological Survey, China dominates the REE market globally withsome 35% of global reserves located in China, the most in the world, andChinese producers’ accounting for 80% of global supply.

Canadiansadvancing Rare Earths Projects

While not aproducer of REEs, Canada is host to several advanced exploration projects andsome of the largest reserves and resources of these metals – see below.

Vancouver-basedpublicly traded Commerce Resources Corp. and separately Defense Metals Corp.,are both companies positioned to address the REE supply dependency issue.