Billions of Dollars in Funding available are you missing the next opportunity?
When you think of rare metals I’m sure it’s gold. A political crisis gave opportunity to create a free flowing money pool. To jump in and take a swim the entry fee comes on most favorable terms. Political gridlock is threatening production of electric car motors, iPhones, military jet engines, batteries, weapon systems and satellites.
Now the Department of Defense has a crisis. A trade embargo on its supplies could seriously affect its capabilities.
The U.S. Defense of Department (DOD) announced on May 29th its desire to seek new federal funds. The federal funds are to bolster domestic production of rare earth minerals. The specific goal is to reduce dependence on China. The Pentagon said this on Wednesday May 29th at a published press conference. These announcements came amid mounting concern.
Washington is deeply concerned about Beijing’s role. Beijing is the major global supplier of rare earth minerals. The Department of Defense (DOD) is now the new funding source for those wanting to break into the refinery business.
Wouldn’t you like to know the terms? What is the next funding opportunity from the DOD? Let’s check it out together.
Don’t worry the about payback of money just build a rare earth processing facility.
Sound crazy? It’s not. The DOD has a national security issue to address. The money will come in forgivable loans, grant funding and speculative R&D. What do you need to process to qualify? You need to process metals like praseodymium, cerium, lanthanum, neodymium, samarium, europium and gadolinium to obtain funding.
How much is available?
Before we answer that let’s understand a few facts. Few viable areas on the planet exist where rare-earth elements can be mined and refined. Cost for extraction is expensive. The purchase price of rare earth metals can be staggering. Building a rare-earth mine can cost up to $500 million, according to the Wyoming Mining Association.
The answer to “How much is available?” is summarized in one phrase, “As much as needed to solve a national security issue.”
Welcome to my focus on Public Private Partnership (P3). I simply go where friendly money is — you should too.
THE RARE EARTH METAL INDUSTRY
Rare earths are a group of 17 elements. Rare earth metals are everything from “iron grey” to “silvery lustrous metals”. Metals that have great commercial use are “typically soft, malleable, ductile, and usually reactive”, according to the US Geological Survey. These metal groups are crucial for manufacturing a broad array of high-tech products. Rare earth elements are used for devices such as smartphones, wind turbines, camera lenses, magnets and missile defence systems.
China produces more than 85% of the world’s supply. Half of China’s production is from Baotou. Baotou is a city of 2.5 million. Baotou is located in China’s Inner Mongolia Autonomous Region about 650km northwest of Beijing.
Between 2004 and 2017, China accounted for 80% of U.S. rare earth imports (according to US Department of Commerce). Few alternative suppliers have capability to compete with China. China has 37% of global rare earths reserves but nearly all the refineries to process these metals are in China. This information was obtained from the “Defense Production Act III rare earths mineral report” available on the Pentagon website.
The US Government Accountability Office published a report in 2016 specifying that the Department of Defense accounts for 9% of rare earth metal global demand. Raytheon Co, Lockheed Martin Corp and BAE Systems Plc all make sophisticated missiles. Every sophisticated missile system uses rare earth metals. The rare metals are essential for guidance systems and sensors.
According to the report only three (3) US Based companies have rare earth processing plants under construction or in the planning stages.
IMPLICATIONS, EFFECTS & OPPORTUNITY
Identifying concentrated reserves is one step in a difficult production process. The step often overlooked is environmental protection. It takes very toxic practices to extract rare earth metals. Processes such as leeching and chemical processes are typically used.
Waste products (called tailings) from refining rare-earth minerals are often dumped in dams and reservoirs near processing facilities. Sometimes, radioactive chemicals are used during refining processes. Often chemicals enter waterways as well. On Reuters, Guo Gang, a 58 year old farmer near Baotau, China deals with the tailings from a 10 square kilometer dam. This 10 square kilometer dam holds 230 million cubic meters of the waste. What are Guo’s words?
“”When we boil the water to drink, this white scum forms on top and it tastes bitter,”
Guo is drinking poison.
Eugene Gholz, a rare-earth expert at the University of Notre Dame, was quoted on Verge saying the following, “Once you take it out of the ground, the big challenge is chemistry, not mining; converting the rare earths from rock to separated elements,”
In 2010, China reduced its export quotas of rare-earth minerals. As a result of China’s export reduction, rare earth prices increased by nearly ten percent.
China started exporting more minerals again after the European Union filed a dispute with the World Trade Organization in 2012. The dispute claimed export restrictions limited access for companies outside of China. China complied to improve its standing with the world community. The only U.S. rare earth mining facility is California’s Mountain Pass Mine in San Bernardino County.
The California plant ships 55,000 tons of rare earth concentrate each year to China for processing. The company managing the facility is MP Materials, which plans to start its own stateside operation in 2020.
“This is a game changer for Japan,” Jack Lifton, a founding principal of market-research firm Technology Metals Research, told The Wall Street Journal. “The race to develop these resources is well underway.”
FOCUSING ON THE POINT
If you’re an investor you need to pay attention to companies solving this issue. Buy stock or invest in companies solving this problem. If you’re an opportunist you need to put together a Request For Proposal (RFP) package to submit for consideration to build a 500mm processing facility. Pick Nevada or Arizona not California. Build it in the middle of a desert where no one will get sick (as California is very environmentally conscious). If you’re in school looking to pick a career that will offer you job stability, choose to be an engineer in mining.
To your knowledge success!
About Christopher: Christopher Knight Lopez is a Professional Entrepreneur. Christopher has opened over 7 businesses in his 14-year career. Christopher’s purpose is to take advantage of various market-driven opportunities. Christopher is a certified Master Project Manager (MPM) and Accredited Financial Analyst (AFA). Christopher previously held his Series 65 securities license. Christopher also has his General Lines — Life, Accident, Health & HMO. Christopher has managed a combined 286mm USD in reported Assets Under Management & Assets Under Advisement. Christopher has work experience in 29 countries, raised over 50mm USD for various businesses, and grossed over 7.5mm in his personal career. Christopher worked in the highly technical industries of: biotechnology, finance, securities, manufacturing, real estate, and residential mortgages. Christopher is a United States Air Force Veteran. Christopher has a passion for family, competitive sports, fishing, martial arts and advocacy for entrepreneurs. Christopher provides self-help classes for up-and-coming entrepreneurs. Christopher’s passion to mentor comes from belief that entrepreneurs need guidance. The world is full of conflicting information about entrepreneur identity. See more at www.christopherklopez.com