Business Analysis GGG - High risks and Costs, Very competivive market

The Greenland news paper has produced an excellent market review about GGG and Kvanfjeld

Kvenefjeld had huge risks even before the EIA and Uranium risk and the likely delay of at least 4 years

-There are worldwide reserves of rare earth metals of about 120 million tons according to the US Geological Survey, and consumption is about 250 thousand tons per year, so it is not in short supply. There are many mining projects that are on the rise (Figure 2). So there is no shortage of rare earth metals worldwide.

- In addition to deposits found in solid rock, rare earth minerals are now also produced as a by-product of titanium extraction. In India alone, there are reserves of 12.5 million tonnes of rare earth minerals that can be produced that way.

- Can financing be obtained for the mine There is a design of mines and facilities, but it is hardly the final design, what will be the final price and how will the financing come into place.

-What will be the price and is there and access to the market
For some metals, it is relatively simple to calculate what it costs to produce a ton, and you can then make some assumptions about how the market will behave. Metal prices fluctuate. But with rare earths, it's more like trying to calculate the price of oak based on the price of an architect designed chair.

- Kuannersuit The ore contains 1 percent rare earths. Can it compete with the Chinese ore or the ore in the Australian deposit Mount Weld, which contains about 6 to 8 times as high a concentration of rare earths?

- Will new projects with a high content of the heavy rare earths mean lower prices? The cost of Kuannersuit will be at the high end, the content of rare earths is at the low end, and one is very dependent on the price of the heavy rare earths maintaining the high price level.

- The key to the market for rare earth metals probably does not lie with those who own a deposit, but rather with those who control the technology and the market, and have the capital to invest in plants for the reprocessing of the metals and can produce the semi-finished products that the market demands.

Google Translation
https://sermitsiaq.ag/chefredaktoeren-anbefalersikre-kuannersuit-pengemaskine

The editor-in-chief recommends:
How sure are we that Kuannersuit will become a money machine?

The market for rare earth metals is difficult to penetrate and the content of these metals in Kuannersuit is not high on an international scale. So whether Kuannersuit will be a "money machine" is not certain. The key to making money goes through access to technology, processing plants and market shares.

"Greenland Minerals" offers great income to Greenland if they are allowed to mine the ore in Kuannersuit. It is one of the largest deposits of rare earth metals in the world. But the market for the rare earth metals does not resemble the normal markets for mining products, and whether money can be made depends on a very wide range of assumptions. We have set out to try to shed light on the matter from the perspective of two professionals.

What are the metals of the rare earths and how rare are they?This group of elements has become a topic of conversation in Greenland, but what is it? It is quite confusing, for they are neither rare nor earthy. One of them - cerium is for example the 26 'most common element on the earth's surface, where nickel, zinc, copper and lead are respectively numbers 23, 24, 25 and 36. In Figure 1 you can see the list of abbreviations at the bottom of the Periodic Table

There are worldwide reserves of rare earth metals of about 120 million tons according to the US Geological Survey, and consumption is about 250 thousand tons per year, so it is not in short supply.

There are many mining projects that are on the rise (Figure 2).

So there is no shortage of rare earth metals worldwide. In addition to deposits found in solid rock, rare earth minerals are now also produced as a by-product of titanium extraction. In India alone, there are reserves of 12.5 million tonnes of rare earth minerals that can be produced that way.

The rare earths are divided into light and the heavy ones. What will be the cost of operating the mineWhat will be the cost of mining, crushing, grinding, separating the ore minerals from the rest, dissolving the minerals into strong acids and separating uranium and rare earth metals from the liquid. The ore in the Kuannersuit does not look like what is mined elsewhere in the world. It is a hard rock, the minerals are small and about half of the rare earth metals are lost along the way. These are costly and energy-intensive processes that require advanced machines and know-how. Is this profitable when it comes to the play?s (Figure 1), where most of the light ones have a lower price. In Kuannersuit, there is a share of about 10 percent of the heavy rare earths, and that is quite high in an international perspective. But in the minerals, which are by-products of titanium, and in some of the new projects, for example the Pretzels or Strange Lake in Canada, there is also a high proportion of the heavy and more expensive heavy rare earths.

Can financing be obtained for the mine
A large billion is needed for the investment in the construction of the mine and the facilities associated with it. There is a design of mines and facilities, but it is hardly the final design, what will be the final price and how will the financing come into place. The Chinese company "Shenghe" has a shareholding of about 12.5 percent, but whether it is they who will make the rest of the investment, is unknown.

What will be the price and is there and access to the market
For some metals, it is relatively simple to calculate what it costs to produce a ton, and you can then make some assumptions about how the market will behave. Metal prices fluctuate. But with rare earths, it's more like trying to calculate the price of oak based on the price of an architect designed chair.

Here it is in its place with an example from history: China has, through the second half of the last century, built up a large industry around a huge occurrence of rare earths: "Bayan Obo" in Inner Mongolia. The rare earths occur in a soft rock as large crystals, and the content of the rare earth metals is about 6 percent. The Chinese have then for decades refined the technology needed to extract the rare earths, and not least to separate the 17 different elements from each other, which is extremely difficult as they are very similar to each other and require complicated chemical plants. That was only the beginning, because the Chinese have built markets for all the 17 different metals, and they also manufacture the semi-finished products that are included in, for example, wind turbines and electric cars - permanent magnets. Vertical integration, as it is called in the language of business. Around the year 2000, a de facto monopoly on rare earths was established.

In China, they have studied market economics, and in 2010 it was to be tested what it can be used for. With apologies in a crisis with some Japanese fishing boats, China implemented a boycott of Japan's access to rare earths. There was panic in the markets and a 10 doubling of the price of rare earths. This boosted the exploration of rare earths all over the world, also in Greenland, and the price of "Greenland Minerals" shares rose.

As a result, the company "Moly Corp" dug up the deposit in Mountain Pass from the moth bag and invested in chemical plants and the production of permanent magnets based on the rare earth metals.

Then it was time for the next chapter in the book on market economics.

The Chinese added to the dispute with Japan and lowered the price of rare earths. The American company, "Moly Corp", went bankrupt. The mine in Mountain Pass is now up and running again, but is selling its production to China, as this is where you have the technology to process the minerals and can sell the products.

Another example is the Mount Weld mine in Australia, which is owned by Lynas Corporation.

The content of rare earths in both Mount Weld and Mountain Pass is about 8 times as high as in the Kuannersuit. The mine is also a result of the "hype" that was around 2010. Like so many new projects, Lyna had great start-up difficulties, and it took five years to get up to the production that the mine was designed for. Lynas is the only major company that both mines the ore and manufactures its own separated rare earth elements.

Technology development is the key

On top of the bankruptcy in 2015 of the US flagship in rare earths, Moly Corp, the Americans have re-saddled. The Americans recognize that there is a lesser shortage of raw material for rare earths, but rather a lack of "know-how" and facilities that can remedy the West's inability to produce end products of rare earths themselves. Since 2015, the American think tank, Technology Metals Research, has focused its work towards breaking this technological emergency.

So there are a number of questions that arise when evaluating

Kuannersuit:The ore contains 1 percent rare earths.

Can it compete with the Chinese ore or the ore in the Australian deposit Mount Weld, which contains about 6 to 8 times as high a concentration of rare earths?

Will new projects with a high content of the heavy rare earths mean lower prices?

The cost of Kuannersuit will be at the high end, the content of rare earths is at the low end, and one is very dependent on the price of the heavy rare earths maintaining the high price level.

The key to the market for rare earth metals probably does not lie with those who own a deposit, but rather with those who control the technology and the market, and have the capital to invest in plants for the reprocessing of the metals and can produce the semi-finished products that the market demands.