Sunday, January 31, 2010

Lithium and REE: 1.4 billion vote from DOE to bring Electric Cars to U.S. TNR.v, CZX.v, LI.v, RM.v, WLC.v, SQM, ROC, FMC, AVL.to, RES.v, CCE.v, QUC.v,


C.S. Obama is calling for an action, financial situation of the State is close to desperate and middle class, the backbone of our society, is struggling to survive. It is a time of change and we have an opportunity to capitalise on this dramatic shift.
Time is to write about Revolutions, transformation technology and disruption in the market place.
Ideal market situation for the new disruptive technology to create a life time investing opportunity is when Demand for product or service is already there and you are able to deliver it in a new way, which will be more appealing to Existing consumers of this product or service. You have a dramatic shift in consumer preference and are gaining a market share in a tidal wave fashion by shifting consumers from existing providers to the new product or service place. You do not have to teach the market and prove that they need this product - you just need to prove that the new technology you are putting in place is viable to deliver the Better Experience.
We have always loved our music. Sony made a Revolution in the way we consume the music with its Walkman - we were able to take our music with us as we go. CDs made the quality of music more appealing and record companies sold us our music one more time.
Steeve Jobs made another Revolution by providing the means to consume what we exactly want with iTunes and means to Store and Retrieve All Our Music as we go in iPod. He sold us our own music one more time and we were happy to buy it. He has brought us a new Experience of how we consume the same music: it is convenient, easy, Searchable, high quality and with us - all of it. We have moved in droves to the new source of Joy.


With Electric Cars all market estimations that we saw so far (apart from quote from Warren Buffett) looks like a drop in the bucket at a time. Will it be 2%, 5% or 10% claimed by Nissan in 2020? It is not a Revolution - it is like a tea party. We dare to differ and think that Electric Cars will provide to us a new Experience how we consume Mobility: energy efficient, environment friendly and cheaper with all cost accounted. And yes - they will sell us our cars one more time, this time in Electric version.
Is it bad - not at all if you will be investing in Electric Cars value chain. Even if not, we will all gain from it more than from iPods - after all we have never heard about somebody being killed by CD, but those, who still do not believe that cars pollute and kill our environment including us, can try to breath from exhaust pipe for a while to be sure.
We expect consumers to shift on a mass scale from CVs to EVs with prove that technology is viable and can provide the same utility with a Better Experience. Emotional Drive will be the driving force of this switch of consumer preferences.


America needs to catch up with the rest of the world in Electric Space. U.S. is years away from recent advance in lithium batteries and electric cars compare to Japan and China. Nissan spent 5.5 billion dollars and 16 years developing electric cars based on lithium ion technology. Competition is heating on and it is very positive to see DOE supporting at least production of Electric Cars in U.S. developed in another countries. Green Leaf growing in the Homeland is better than nothing even if it is from a foreign tree.





"Price of Lithium batteries is in access of 1000 USD/kWh at the moment, with mass production it will drop to 300-400 USD/kWh ( S. GM is aiming now for 450 USD/kWH in a near term) and with recent technological advance we can talk about 100 USD/kWh as possibility."



As we have wrote before, lithium battery price of USD 25o per kWh will make production of Electric Cars cheaper than a comparable CV - you do not need automatic transmission as part of your power drive.



This is why we are calling it Green Mobility Revolution. Make a step back and look at the big picture. With electricity being the most convenient form of energy known to us, stable pricing and ready availability from existing source infrastructure - we have a transformation technology in place: you can store energy on board of your vehicle Produced Somewhere Else. It means that that energy could be produced thousand miles away using mass scale and most economical production method including Nuclear power, Hydro power generation, Geothermal, Wind, Solar and other renewable sources of energy available today.



Our conventional vehicles did not move far away from steam powered trains. They still carry fuel and power plant on board with very inefficient conversion cycle technology from fuel to mechanical power. Power source is restricted to mobility application and it is very expensive, it can not use economy of scale or different sources including renewables (think about tidal wave generator on board) and you are caring exhaust pipe with you everywhere you drive.
It is time to start thinking about Electric Cars as means to transform our Energy Diet nation wide - you do not need to have power generation plant on board (which will be always expensive and inefficient compare to Industrial Scale version even of the same technology) - you need just most effective storage system and power delivery system: Lithium ion batteries and Electric Powertrain.


This is where you can start thinking with us: that all current estimations about Electric Cars adoption rate could be blown away once technology will be proven to be viable in a mass sale applications.


This vote from DOE with 1.4 billion dollars is a very important step. Japanese companies are hunting all around the world for Lithium and REE resources today just to be ready for our Next Big Thing scenario.


AUTOPIA:

At today’s press conference at The Washington Auto Show, Department of Energy Secretary Steven Chu had something to say about electric vehicles, and how the U.S. government would approach aiding EV manufacturers. Although it was originally thought that announcement would concern the loans that Tesla, Fisker et al have received, the surprise announcement concerned Nissan’s Leaf all electric car.
The Leaf, which Nissan says should get 100 miles to a charge, cost around $25,000 to $30,000 and should be in showrooms soon, will be receiving $1.4 billion from the American government to upgrade the company’s manufacturing plant located in Smyrna, Tennessee.
At the D.C. Auto Show Secretary of Energy Steven Chu announced that the Department of Energy had closed a $1.4 billion loan agreement with Nissan to support the modification of the company’s Smyrna, Tennessee, manufacturing plant to produce both the Nissan LEAF as well as the lithium-ion battery packs that will power them.
The $1.4 billion is part of the Advanced Technology Vehicles Manufacturing Loan Program, a $25 billion program that was authorized by Congress in 2007, according to Clean Skies. The Japanese automaker says the loan will allow them to generate up to 1,300 jobs when the Tennessee plants are working at full volume. The factory modifications will begin later in 2010 and include the new battery plant as well as changes to the existing structure for electric-vehicle assembly.
Eventually the plants will construct up to 150,000 Nissan LEAF electric cars a year and as many as 200,000 batteries.
AutoBlogGreen said that Secretary Chu’s announcement of the $1.4 billion Advanced Technology Vehicle Loan Program loan was down from the original $1.6 billion amount. ABG also reported that Chu dealt a blow to those wanting to get hydrogen up and running as soon as possible. The energy secretary stating that even though hydrogen is part of the DOE’s $13 billion advanced vehicle technology budget, it was “longer in the distance.”
Chu has long been a vocal proponent of electric vehicles, stating back in October of 2009 that he would ” … put every cent into electric cars.”
Photo: NissanRead"

Saturday, January 30, 2010

Lithium Charge: 350 million vote of confidence for Better Place. TNR.v, CZX.v, LI.v, RM.v, WLC.v, SQM, FMC, ROC, BYDDY, NSASY, DAI, BMW, TM, TTM, F,


"CS. Obama has told you about our Investment Thesis in three short sentences. We are not so smart and we do not have such an authority - we need to bring reason to decompound his message. Time for us to drop couple of lines about Middle-class and our Christmas wish."



One thing is when we are preaching about coming Green Mobility Revolution and another is when HSBC opens its cheque book. Serious money are committed to development of infrastructure for electric cars in this transaction, but the most important is the resonance in the investment market place: Electric Cars are becoming reality.


Friday, January 22, 2010

Study: Electric Cars Show “Great Promise” in Fight Against Global Warming TNR.v, CZX.v, WLC.v, LI.v, RM.v, LMR.v, SQM, FMC, ROC, NSANY, BYDDY, AVL.to,



"We have tested our Next Big Thing idea with Macro View on Micro Cap and we have wrote about Electric cars intensively with our idea of Lithium and REE: How to invest in the Next Big Thing - Electric cars and Green Mobility Revolution. Now it is time to bring Political Will into the picture. We will make a few social economic observations crucial for our investment thesis and recent policies confirming our conclusions."







theEnergyCollective:




by Osha Davidson on 01/21/2010 12:
Kyocera's employee parking lot, San Diego. The solar panels on the roofs generates power to charge plug-in cars during the work day. Photo by Envision Solar.
A new study by Environment America finds that electric vehicles (EVs) could do a lot to fight global warming and clean up the urban smog that contributes to respiratory and heart problems. But, the report concludes, changes in public policy are needed to make the switch from internal combustion to all electric vehicles on a mass scale.
Environment America is a national coalition of environmental groups in 25 states.
To download the full report, click on the graphic at the bottom of this page.
Executive Summary
America’s current fleet of gasoline-powered cars and trucks leaves us dependent on oil, contributes to air pollution problems that threaten our health, and produces large amounts of global warming pollution. “Plug-in” cars are emerging as an effective way to lower global warming emissions, oil use, and smog. A “plug-in” car is one that can be recharged from the electric grid. Some plug-in cars run on electricity alone, while others are paired with small gasoline engines to create plug-in hybrids. Many plug-in hybrids can get over 100 miles per gallon, while plug-in electric vehicles consume no gasoline at all.
As automakers race to become the first to introduce a mass production plug-in vehicle to American consumers, citizens and decision-makers are grappling to understand the implications of switching to a vehicle fleet fueled primarily by electricity for our environment, for consumers, and for the nation as a whole.
Plug-in vehicles show great promise for addressing the nation’s environmental and energy challenges. But it will take strong public policy action to help plug-in vehicles make the leap from promising technology to everyday reality for Americans.
Plug-in cars can make a major contribution to America’s efforts to reduce global warming pollution.

Public charging station, San Francisco. Photo by Siena Kaplan.
• More than 40 recent studies show that plug-in cars produce lower carbon dioxide than traditional gasoline-powered cars. One study by the Department of Energy’s Pacific Northwest National Laboratory (PNNL) found that a car fueled by unused capacity in the current electric system would emit 27 percent less global warming pollution than a car fueled by gasoline.
• Studies also found that plug-in cars reduce global warming emissions even when electricity comes primarily from coal, because plug-in cars use energy more efficiently than conventional cars. The PNNL study found that plug-in cars would produce lower global warming emissions than conventional cars in almost every area of the country, using the current electric system.
• America can reduce emissions even further by making its electricity supply cleaner. A study by the Electric Power Research Institute and the Natural Resources Defense Council found that a plug-in hybrid with a 20 mile electric range running on completely clean electricity would emit less than half the global warming emissions of a plug-in hybrid running on electricity from coal-fired power plants.
Switching to plug-in cars will improve our air quality for most Americans.
• Replacing gasoline with electricity will reduce the smog found in our cities and other densely populated areas dramatically. The PNNL study found that powering cars on electricity instead of gasoline would reduce smog-forming volatile organic compounds (VOCs) and nitrogen oxides (NOx) by 93 percent and 31 percent, respectively.
• A study by the Electric Power Research Institute and the Natural Resources Defense Council found that if current emissions standards for power plants are enforced, converting 40 percent of U.S. cars to plug-in hybrids by 2030 would decrease smog for 61 percent of Americans, and increase it for 1 percent of Americans. Soot would decrease for 82 percent of the population, and increase for 3 percent of the population.
• Powering cars on clean electricity such as wind and solar power, either directly or via the electric grid, would eliminate smog in cities and highways with no increased power plant pollution.
Switching to plug-in cars will reduce oil consumption
• If three-fourths of the cars, pick-up trucks, SUVs and vans in the United States were powered by electricity, oil use would be reduced by the equivalent of 52 percent of U.S. oil imports.
Plug-in cars have many benefits and are quickly becoming practical for an increasing number of drivers
• Plug-in hybrids that have been converted from conventional hybrids already exist that achieve 100 miles per gallon or more.

Tesla Roadster
• Electric cars that can go over 200 miles on one charge are being sold in the United States today.
• Most plug-in cars can charge in a normal wall outlet found in many home garages, and rapid chargers have been developed that can fill a 100-mile battery in 10-15 minutes.
• Fueling plug-in cars costs two to five cents per mile, or the equivalent of $0.50 to $1.25 a gallon of gasoline.
• Fuel savings over a ten year period, compared with fuel costs for a conventional car, combined with a federal incentive, can reduce the lifetime cost of a plug-in car as much as $17,000.
• Electric cars are much simpler to maintain than conventional cars, with one moving part compared with the hundreds of moving parts required for an internal combustion engine. Electric cars have no oil changes, and require far fewer repairs.
• Plug-in hybrids are more expensive than conventional vehicles, but will become cheaper over time as battery technology improves and mass production is achieved.
America’s electric system has the capacity to fuel most of our cars today, and plug-in cars could make our grid more reliable and cleaner
• America’s electric system could fuel 73 percent of U.S. cars, pickup-up trucks, SUVs and vans without building another power plant, by charging vehicles at night.

Easy on the grid
• One million plug-in cars charging simultaneously would only use about 0.16 percent of America’s current electric capacity.
• Plug-in cars could help stabilize the electric grid and provide emergency backup power – reducing the cost of electricity for all consumers.
• If half our cars were plug-in hybrids whose batteries were available to utilities, wind power in the U.S. would double by 2050 through market forces alone, according to a study by the National Renewable Energy Laboratory. This is because parked plug-in cars would provide electric storage capacity that could displace the backup generation capacity utilities would otherwise need to purchase to provide power when the wind isn’t blowing, lowering wind power’s cost.
There are still barriers to the widespread adoption of plug-in cars, but public policies can help to overcome those barriers.
• Despite rapid advances in battery technology over the past decade, automakers and battery developers still have strides to make in arriving at battery designs that deliver the range and affordability American consumers are looking for. Continued funding for research and development of advanced batteries can help.
• The cost of plug-in car prices will be high until they are mass produced. Consumer incentives for plug-in cars and government and fleet purchases can help spur the market for plug-ins, enabling them to achieve mass production more quickly.
• Plug-ins have the potential to deliver many economic benefits – from reducing the cost of electricity to curbing global warming pollution. State and federal governments should adopt policies – ranging from investments in “smart grid” technology to a cap on global warming pollution – that would unlock these benefits, and ensure that purchasers of plug-in vehicles are compensated for the benefits their choice delivers to society.
• The lack of public charging infrastructure – while not a deal-breaker for plug-in vehicle owners who can charge their cars at home – could limit the willingness of some consumers to buy or use plug-in vehicles. Local, state and federal governments should jump-start the creation of charging infrastructure by installing chargers at publicly owned facilities, developing procedures for the installation of chargers on city streets, and encouraging private development of charging infrastructure.
Governments should ensure that the electricity fueling plug-ins is increasingly clean and renewable.

The Sun's "green screen" test drive of the Nissan Leaf, before the real one.
• States and the federal government should enforce a low-carbon fuel standard, requiring that transportation fuels be 10 percent less carbon-intensive by 2020. When calculating global warming emissions, full lifecycle emissions such as indirect land use impacts should be included. This would encourage a switch to electricity as a fuel.
• States and the federal government should require that at least 25 percent of our electricity comes from clean and renewable sources like wind and solar by 2025.
• The federal government and states should strictly enforce current power plant emissions regulations, and fill any gaps in regulation, so that our air quality will continue to improve regardless of the amount of electricity produced.
• The nation should adopt a cap on global warming pollution that reduces emissions to 35 percent below 2005 levels by 2020 and to 80 percent below 2005 levels by 2050."




Report: Plug-In Cars

Thursday, January 21, 2010

Lithium and REE: The Electric Car Revolution Will Soon Take to the Streets TNR.v, CZX.v, WLC.v, LI.v, RM.v, LMR.v, AVL.to, RES.v, QUC.v, BYDDY, NSANY




CS. Obama has told you about our Investment Thesis in three short sentences. We are not so smart and we do not have such an authority - we need to bring reason to decompound his message. Time for us to drop couple of lines about Middle-class and our Christmas wish.




YALE
Environment 360:


21 JAN 2010: REPORT

For years, the promise and hype surrounding electric cars failed to materialize. But as this year’s Detroit auto show demonstrated, major car companies and well-funded startups — fueled by federal clean-energy funding and rapid improvement in lithium-ion batteries — are now producing electric vehicles that will soon be in showrooms.

by jim motavalli

Electric cars are a green movement that is finally moving. Shunted to the side as the public indulged its love affair with gas-guzzling SUVs and four-wheel-drive trucks, history has finally caught up with the plug-in vehicle.

The North American International Auto Show in Detroit is the domestic auto industry’s biggest annual showcase, and the new models have traditionally been brought out in a son et lumière of dancing girls, deafening music, and dry ice smoke. The few green cars that made it this far were usually for display only — very few actually made it to showrooms.

Tesla
Getty Images
The Tesla Model S electric vehicle at the North American International Auto Show in Detroit.
But not this year. It’s become a race to market for green cars, and soon you’ll be able to buy many of the electric vehicles that were on display last week in Detroit. The auto show featured one hybrid and battery electric car introduction after another. Although the only truly road-worthy, plug-in electric vehicle you can buy today is the $109,000 Tesla Roadster, by the end of 2010 it will be joined by such contenders as the Nissan Leaf, Coda sedan, and the Think City.

Indeed, the entire auto industry — from giants such as Ford, GM, and Renault-Nissan to startups such as Fisker Automotive — has joined the movement to build and market affordable electric vehicles.

There’s a reason the automakers in Detroit are finally plugging in as something more than a greenwashing exercise. Spurring them forward is a historic confluence of events. Chief among them are Obama administration green initiatives, including Department of Energy (DOE) loans and grants, as well as economic stimulus funds that provide $30 billion for green energy programs, tax credits for companies that invest in advanced batteries, and $2.4 billion in strategic grants to speed the adoption of new batteries. (Much of that money is going to Michigan, which despite record unemployment is emerging as something of a green jobs center.)

Other factors behind the push to manufacture electric vehicles are a federal mandate to improve fuel efficiency to an average of 35.5 miles per gallon by 2016, concerns about global warming and peak oil, and sheer technological progress building better batteries.

Even without federal largesse, some companies are moving aggressively into the electric vehicle market. A prime example: Coda Automotive, a
A key factor in making electric vehicles possible is the rapid development of lithium-ion batteries.
southern California start-up, has raised an impressive $74 million in three rounds of private funding. CEO and President Kevin Czinger is a former Goldman Sachs executive, as is co-chairman Steven Heller. Among the company’s investors are Henry M. Paulson, who was Goldman Sachs’ chairman and Treasury Secretary under the second President Bush. Clearly, these former investment bankers see electric cars as a good bet.

A key factor in making today’s electric vehicles possible is the rapid development of the energy-dense lithium-ion battery. William Clay Ford Jr., the executive chairman of the company that bears his name, told me in Detroit, “Five years ago, battery development had hit a wall, and we were pushing hydrogen hard. But now so much money and brainpower has been thrown at electrification that we’re starting to see significant improvements in batteries in a way we hadn’t anticipated. Now we have the confidence that the customer can have a good experience with batteries.”

Drawing a huge crowd, Tesla Motors Chairman and CEO Elon Musk showed off his company’s 1,000th electric Roadster at the auto show. “For a little company, it’s a huge milestone,” he told me. “A year ago, we had built only 150 cars. We had two stores then, and now it’s a dozen.”

For a major automaker, 1,000 cars would not be much to show for a year, but electric vehicles are still in their infancy. And since the electric car’s
An e360 discussion with Tesla's Elon Musk.
first swan song in the 1920s — when the widespread availability of petroleum ushered in the era of the gasoline-powered car — very few start-up companies have reached the milestone of making green vehicles, especially battery-powered ones.

Here’s a look at some of the prime contenders bringing battery cars and plug-in hybrids to market:

  • Renault-Nissan Alliance. This is the one automaker with a truly global plug-in strategy and the means to carry it out. Under the Nissan banner, the company will deploy the Leaf battery sedan, with 100-mile, all-electric range. Nissan isn’t just dumping its sleek entry into the market — it’s also building a home charger with new partner AeroVironment and partnering with local, state and federal governments — both in the U.S. and abroad — on public charging stations. In partnership with Better Place, the company will deploy a second Renault electric vehicle as part of its plan to wire up Israel with charging stations for electric cars. Renault-Nissan chief Carlos Ghosn predicts that electric vehicles could constitute 10 percent of world car sales by 2020.

  • Ford Motor Company. Ford’s green strategy includes a plug-in version of the new Focus for 2011 and a “next-generation” hybrid — based on its global compact-car platform, or C-platform — in 2012. The company announced in Detroit that it would invest $450 million in Michigan as part of its electrification strategy. Michigan Governor Jennifer Granholm told me at the auto show that until recently the state “wasn’t sure it had a viable auto industry.” Today, she said, the state is enjoying $1 billion in new auto-related investment, much of it jump-started by a combination of federal funding and state tax credits.

  • General Motors. GM’s big news is the Chevrolet Volt, which has definitely helped the company’s image. The Volt, which uses a small gas engine to generate electricity for its electric motor, is a lot of fun to drive if the version I drove recently in Michigan is any indication. Until now, GM has stumbled in its hybrid strategy, and it really needs this car — which will go on sale at the end of the year for a hefty $40,000 — to be a hit. But success may be more a matter of perception than actual sales. “In terms of numbers, the Volt will be pretty small for the first couple of years,” says product chief Bob Lutz. A Cadillac version of the Volt is also a possibility.

  • Tesla Motors. This California start-up launched at the top of the market with its $109,000 Roadster, which combines sexy looks with supercar performance (zero to 60 in 3.9 seconds). The company is on something of a roll, having sold 10 percent of itself to Daimler for $50 million, and landed $465 million in DOE funding for its forthcoming Model S sedan — a Maserati-like, more practical version of the Roadster. Tesla’s Musk says that the company’s strategy has always been to use its sale of performance cars to finance its third vehicle, a mass-market electric vehicle. The company is currently looking at California locations for a Model S factory.

  • Fisker Automotive. Perhaps Tesla’s closest competitor when it comes to glamour electric vehicles, Fisker – whose CEO is Danish-born automotive designer Henrik Fisker — is preparing to debut a high-performance plug-in hybrid (zero to 60 in 5.8 seconds, with 67 mpg fuel efficiency) known as the Karma at the end of the year. Al Gore is on the waiting list. Fisker also has a lower-cost car in the wings, called Project Nina. Fisker won $528 million from the DOE to build the Nina in a former GM factory in Delaware.

  • Coda Automotive. This start-up will deliver, in late 2010, a small battery-powered sedan with batteries from its own joint venture in China. The car is based on the Saibao, a Chinese car, but Coda has put a host of western companies to work honing an
    Electric vehicles will be built in hard-hit Elkhart, Indiana, once the ‘the RV Capital of the World.’
    electric drivetrain for it. “A large part of our mission is to accelerate adoption of all-electric vehicles,” Coda CEO Kevin Czinger told me. “We have put together a core group of auto and battery engineers, and are leveraging specialty automotive firms that we think can get us to the right price point.” Coda will launch with an Internet marketing strategy in California only, but it will have the capacity to produce 20,000 cars a year.

  • Think Global. Think is a survivor, with perhaps the longest and most colorful history among green automakers. It is a Norwegian company that attracted Ford Motor Company investment in the late 1990s with its plastic-bodied City commuter car. Ford sold the company in 2003 and it went through bankruptcy proceedings in late 2008. It has since emerged under the partial ownership of U.S. battery company Ener1, which snagged $118 million in DOE funding to expand its battery production in Indiana. Think electric vehicles will also be built there starting in 2011, in hard-hit Elkhart — once proudly known as the “RV Capital of the World” — and now suffering the effects of the recession. The two-seat Think City (with approximately 100-mile range on lithium-ion batteries) will sell for less than $20,000 in the U.S., but that price does not include the leased battery pack and includes the $7,500 federal tax credit for electric vehicles.

The list of players in the electric vehicle race goes on. Toyota is building

MORE FROM YALE E360

The potential for electric vehicles has been talked about for decades. But a former Israeli software entrepreneur is developing a game-changing infrastructure that could finally make them feasible.

After years of false starts and failures, the electric car may finally be poised to go big-time. With automakers from GM to Chrysler to Nissan preparing to roll out new plug-in hybrids or all-electric models, it looks like the transition from gasoline to electricity is now irreversible.
plug-in hybrids and fuel-cell vehicles, and showed off a small cousin of the Prius in Detroit. Chrysler has an ambitious electric vehicle rollout that’s been stalled by the company’s bankruptcy and merger with Fiat. Honda continues to deploy clever hybrid cars, including the upcoming two-seat CR-Z it showed in Detroit. BMW has electrified the Mini for a test program, and has similar intentions for the Concept ActiveE, a plug-in version of the Series 1 BMW coupe. And Audi has shown sudden interest in this segment, debuting the second of its electric e-tron vehicles.

By this time next year, electric cars will no longer be just on auto show stands, but will have arrived in showrooms at last.

Wednesday, January 20, 2010

EVs mass market: EU to introduce electric car initiative TNR.v, CZX.v, ORE.ax, LI.v, RM.v, WLC.v, LMR.v. SQM, FMC, ROC, RNO, BMW, DAI, BYDDY, NSANY,


"Building a robust clean energy sector is how we will create the jobs of the future, jobs that pay well and can't be outsourced," Obama said."This initiative is good for middle-class families. It is good for our security. It is good for our planet," he said.




"You have to be very selective on every company in this sector: Majors will be still driven by CV sales and even meaningful growth in EVs' part of the business will be diluted in share performance. These automakers can actually decide to be very aggressive with EVs business model: they can lease batteries with a very attractive terms and accommodate pricing in order to squeeze all newcomers into the sector to gain a market share. National governments will make this process even more destructive for margins: they will support by all means national automakers and once success for EVs will be apparent moves in the affordability could be very dramatic. It will be extremely positive for our Next Big Thing and development of EVs' Value Chain as a whole, but shareholders in these companies could wait for a long time to be actually rewarded."



Competition is open: who will be Electric Cars capital of the world: China with its control of REE and BYD with other dozen cars ready to go, Japan with Toyota moving to secure the Lithium supply and Nissan with Leaf or Europe with Renault, Mercedes, BMW, Audi and "Europe wide plan for Electric Cars"? If this plan will follow the lead of France: Americas will need to move very quickly in order not to lose in Electric race - apart from GM Volt, which will not be very aggressive on its numbers in production as we understood it, Tesla and Fisker will not make it for the EV mass market. Foreign automakers supported by the home markets will be able to cut costs and move quickly into U.S. auto market filling the gap. Where is U.S. wide plan for Electric Cars?





RONAN MCGREEVY in Strasbourg
A new initiative to launch a Europe-wide plan for an electric car will be launched as part of the Spanish presidency of the EU next month.
Spanish rime minister José Luis Rodríguez Zapatero, whose country currently holds the EU presidency, said there was a need for a pan-European strategy to produce a viable electric car.
Mr Zapatero said he had met some of Europe's biggest car manufacturers in recent days who impressed upon him that the EU should take a lead in developing electric vehicles.
The outcome of the meeting will be unveiled in San Sebastian on February 8th.
The European Commission is already working on its proposals for electric cars which the Commission President José Manuel Barroso described as a "very important" part of its green strategy.
Mr Zapatero told MEPS in the European Parliament that the car industry was already going huge change and there was a need for a co-ordinated response and a common strategy.
He said competitors such as China and Japan would have the advantage unless EU car manufacturers had the right incentives to invest in electric vehicles.
"It was felt to be fundamental that there should be co-operation of efforts in developing the electric vehicles among all EU countries with the commission taking a lead in developing electric cars," Mr Zapatero said.
He added that there was a need for a regulatory framework to provide financial support for electric vehicle manufactures, common standards and technologies without which it will be "difficult for Europe to take a lead in this area."

Gold and Copper: NGEx Announces Updates on South American and Eritrean Drill Programs NGQ.to, TNR.v, NSU.to, AUY, ABX, LUN.to, BVN, GG, SSRI, SLW,


"Lukas Lundin looks like missing from our Lithium and REE fever: we can hardly call it an "exposure" via his holdings in Canada Zinc Metals CZX.v after investing in TNR Gold TNR.v"
"We expect Lukas Lundin to storm the junior space back with his troops. He was out of the picture for a while and put his exploration ambitions on hold consolidating Canadian Gold Hunters CGH.to, Suramina Resources and Sanu Resources. He has grown up fast first in size of the controlled assets and status of Major League by Lundin Mining and then was hit with problems followed - he was busy saving them after the crash. But now we have a few signs of his team coming back into the junior M&A market space and we would like to speculate whether it could lead to any catalyst in juniors we are following."



With this Global Exploration vehicle of Lukas Lundin group it is easier to tell where they do not have projects than where they have. NGEx Resources presented in South and North Americas and in Africa.
In Argentina Company has a few J/V deals and properties with TNR Gold TNR.v. Results from Jose Maria will be important for Batidero property under option from TNR Gold.
NGEx has recently raised capital and the most important news is that Lukas Lundin has increased his position in the company via his family investment vehicle Zebra Holdings. We are always following smart money and companies where insiders are holding a significant stake and are increasing their positions.

"TNR Gold investor acquires five million more units
2009-12-23 18:44 ET - News Release
Mr. Kirill Klip reports
TNR EARLY WARNING REPORT
Kirill Klip has acquired through a private placement, directly or indirectly, five million units at a price of 30 cents per unit of TNR Gold Corp. Each unit consists of one common share and one-half common share purchase warrant. Each whole warrant entitles Mr. Klip to purchase an additional common share at a price of 40 cents, up to and including Dec. 17, 2011. The common shares of TNR are listed on the TSX Venture Exchange. Assuming full exercise of the warrants, Mr. Klip would hold a 22.46-per-cent interest in TNR.
As stated in Stockwatch on Feb 25, 2009, Mr. Klip owned, or exercised control or direction over, an aggregate of 14,250,500 common shares, 975,000 warrants and 950,000 stock options, and a $150,000 principal amount debenture and associated warrants. Assuming conversion of the $150,000 principal amount debenture and exercise of the associated warrants, together with Mr. Klip's warrants and stock options, TNR had 85,486,983 common shares outstanding of which Mr. Klip would exercise control or direction of a 25.94-per-cent interest."


Now with recent news in Lithium sector Argentina promise the hot Summer in that part of the world, but do not discount solid Gold and Copper and we are looking for the results from announced exploration programs.

NGEx investor Zebra buys five million more shares
2009-12-23 19:39 ET - News Release
Mr. Aksel Azrac of Zebra Holdings reports
ZEBRA HOLDINGS & INVESTMENTS S.A.R.L.: CORPORATE UPDATE-NGEX RESOURCES INC.
Zebra Holdings and Investments SARL, on Dec. 21, 2009, purchased three million common shares of NGEx Resources Inc. at a price of 70 cents per share, through the facilities of the TSX Venture Exchange and purchased two million shares of the company pursuant to a private transaction. Prior to the purchase of the shares, the offeror owned 10,411,841 common shares and an investment company acting jointly with the offeror owned 5,615,400 common shares of the company, representing approximately 10.91 per cent of the company's issued and outstanding share capital. The offeror and the joint actor now own and have control over a total of 21,027,241 common shares of the company, or approximately 14.32 per cent of the issued and outstanding shares of the company. The offeror relied upon the accredited investor exemption provided for in Section 2.3 of National Instrument 45-106 in connection with the issuance of two million of the five million common shares."






NGEx Announces Updates on South American and Eritrean Drill Programs


Press Release Source: NGEx Resources Inc. On Tuesday January 19, 2010, 3:35 pm EST

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 19, 2010) - NGEx Resources Inc. (TSX:NGQ - News; 'NGEx' or the 'Company') is pleased to report on its drill programs currently underway in Chile and Eritrea. The Company's 2010 drill program at its Los Helados project located in Region III, Chile started on January 14, 2010 at site I (to see photo please click on: http://us.lrd.yahoo.com/_ylt=AswKZuVE5V_pYRj3k5PxmUqtcq9_;_ylu=X3oDMTE2YTJoZXNrBHBvcwMzBHNlYwNuZXdzYXJzdGFydARzbGsDaHR0cG1lZGlhM21h/SIG=11ipio592/**http%3A//media3.marketwire.com/docs/ngq119a.jpg). The planned program will consist of approximately 3,800 meters in 6 or 7 holes. Drilling is planned to follow up on encouraging results obtained in DDH 04 drilled in 2009 which intersected 762 meters of 0.43% copper and 0.22 g/t gold, including 343 meters of 0.58% copper and 0.21 g/t gold. The drilling will target a 1 kilometre long chargeability anomaly that lies to the north of previous drilling. Outcrops above the anomaly contain potassic alteration, stockwork veining and local copper sulphides. The drill program is expected to take approximately two months. Los Helados is part of the Company's joint venture with the Japan Oil, Gas and Metals National Corporation (JOGMEC). JOGMEC holds a 40% participating interest in Los Helados.
Drilling at the Company's nearby Josemaria project concluded in mid-December, 2009. Seven diamond drill holes totalling 2,253 meters tested possible extensions of the Josemaria resource. Results are expected toward the end of January, 2010.
The Company also has a drill program underway in western Eritrea that is targeting volcanogenic massive sulphide targets on its Mogoraib and Kerkebeit licenses. Drilling will test additional targets at the Koken Prospect where initial drilling in 2008 intersected encouraging results; possible extensions to the Hambok deposit identified by a gradient IP survey conducted in November, 2009 (to see map please click on: http://us.lrd.yahoo.com/_ylt=ApC35xY5MGLkxqdeh1rIoUGtcq9_;_ylu=X3oDMTE2OWh2ZWsxBHBvcwMxBHNlYwNuZXdzYXJ0Ym9keQRzbGsDaHR0cG1lZGlhM21h/SIG=11idv5u0k/**http%3A//media3.marketwire.com/docs/ngq119b.jpg).
Drilling is also underway to test a new mineralized gossan known as the Aradaib prospect that was identified by prospecting (to see photo please click on: http://us.lrd.yahoo.com/_ylt=Ai1af2wHCCu6h2wvpT.s5watcq9_;_ylu=X3oDMTE2M2xsajZuBHBvcwMyBHNlYwNuZXdzYXJ0Ym9keQRzbGsDaHR0cG1lZGlhM21h/SIG=11idniojr/**http%3A//media3.marketwire.com/docs/ngq119c.jpg). Initial work identified 350m of discontinuous strike exposure of the gossan. Of twelve rock chip samples taken, ten returned anomalous gold values (100 to 350ppb) with two assaying 4.1 and 8.9gpt, five had Cu values greater than 1000ppm, and two had Pb greater than 1000ppm. Zn is moderately anomalous in all of them.
Aradaib Gossan
Dr. Wojtek Wodzicki, P. Geo. (BC), President and CEO of NGEx, a Qualified Person as defined by National Instrument 43-101, has review the technical contents of this release.
On behalf of the Board,
Dr. Wojtek Wodzicki, President and CEO"

Tuesday, January 19, 2010

Lithium in Argentina: Toyota Tsusho shares jump on lithium news TNR.v, CZX.v, ORE.ax, RM.v, LMR.v, LI.v, WLC.v, TM, TTM, BYDDY, NSANY, F, DAI, BMW,


International Lithium Corp. will be spin out in a very fertile grounds: Lithium sector is getting recognition from Industry insiders and soon investment public will take notice as well: our consolidation stage is over and Lithium Development and exploration plays are ready for the next leg up.
We own shares of this company, biased and nothing should be taken as an investment advise on this blog as usual: just enjoy our travel notes "On the way to the Green Future."




"Mariana Project -- Argentina: ILC's focus lies in the 120 square kilometre 100% held Mariana lithium brine project. Within proximity to major producers of lithium carbonate (FMC and SQM), Mariana has all the key characteristics of a potential producer. ILC has completed initial sampling and hydrogeology, is producing a NI43-101 technical report and is in preparation for the initial exploratory drill phase. Should all the factors prove to be favourable and the project advances accordingly a mineral resource can be estimated and a feasibility study completed in approximately 2 years."




Our Next Big Thing is in action today! Auto makers are rushing to secure lithium supply. Argentina is getting hotter with every deal. First Magna bought into Lithium Americas and now Toyota Tsusho makes a J/V with Orocobre. Who will be next: Las Vegas show will be all around the poker tables this time. We are following here International Lithium to be spin out from TNR Gold TNR.v with their Mariana Lithium property in Argentina, tomorrow will be interesting day for all Lithium Brines plays: TNR.v, RM.v, LI.v, LMR.v

China controls Rare Earth Elements market, Japan will control Lithium market after dozen of deals like this: our "investments bottlenecks" in action: total market of Top Five Canadian Lithium Exploration and Developments plays one month ago was only 190 million CAD.





SAN FRANCISCO (MarketWatch) -- Shares of Toyota Tsusho Corp. /quotes/comstock/!8015 (JP:8015 1,405, -12.00, -0.85%) rose as high as 11% early Wednesday, amid reports that the trading company, in which Toyota Motor Corp. /quotes/comstock/!7203 (JP:7203 4,140, -50.00, -1.19%) /quotes/comstock/13*!tm/quotes/nls/tm (TM 91.76, -0.02, -0.02%) /quotes/comstock/11i!toyof (TOYOF 44.75, +0.50, +1.13%) owns a large stake, has secured a long-term source of lithium, used in hybrid and electric-car batteries. The lithium project, sited in Argentina, could begin commercial production by 2012, according to reports. Shares of Toyota Tsusho later eased back, though were still up 8%, while those of Toyota Motor rose nearly 1%, roughly in line with gains enjoyed by other car makers"


WSJ:


Toyota in Lithium Agreement


By ANN DAVIS And DAISUKE WAKABAYASHI
A key supplier of Toyota Motor Corp. moved to secure a long-term source of lithium in Argentina, in one of the first global natural-resource plays of the electric-car age.
Edging out Chinese buyers, Toyota Tsusho Corp., which is 21.8% owned by Toyota Motor, secured low-cost loans from the Japanese government to take a stake in a lithium project that could begin commercial production by 2012.
The move signals how the search for high-quality lithium used in hybrid and electric-car batteries is prompting jockeying for the earth's commodities.

A supplier to Toyota, which makes the Prius hybrid, has tied up a potential source of lithium for batteries.

With demand projected to grow rapidly for car batteries over the next decade, "we think we should start preparing to supply the market," Naoto Yamagishi, general manager of the metal-and-mineral resources department at Toyota Tsusho, said in an interview.
The investment would give Toyota—the largest seller of hybrid vehicles—as well as Japanese battery makers a secure supply of lithium rather than leave them at the mercy of a few producers if, as some fear, supplies tighten in coming years.
Japanese electronics makers already control a majority of the lithium-ion battery market for electronic devices such as laptop computers. In the new deal, a state-owned Japanese entity, the Japan Oils, Gas and Metals National Corp., is giving Toyota Tsusho inexpensive financing to secure relatively low-cost lithium for Toyota and other companies that are competing with South Korean and Chinese rivals in the car-battery market.
The investment is valued at $100 million to $120 million, said people with knowledge of the matter. Toyota Tsusho will pay for the completion of a feasibility study this year on a lithium project operated in northern Argentina by Australian-listed
Orocobre Ltd. and will take a 25% stake in the project thereafter.
Although lithium is found in rock formations on many continents, in only a few spots does it exist below the surface of natural salt flats where weather and geography make it the most economical to extract. Developers with access to underground salt brines pump the liquid out and concentrate the lithium into a white powder through steps that include outdoor evaporation.
Mr. Yamagishi said Toyota Tsusho approached Orocobre, citing the potential quality of its supply, located not far from rich deposits in Chile, known as the Saudi Arabia of lithium. He said he doesn't expect supply concerns to be a problem in the next five years, but "if you look at it over 10 years, then we think the supply is going to get extremely tight."
At current prices, lithium represents only about 5% of the cost of either a laptop battery or a large-format car battery. But margins in the electronics industry tend to grow thin over time.
The global market for lithium-ion batteries used in automobiles is forecast to grow 90-fold to 2.25 trillion yen ($24.8 billion) in 2014 from 25 billion yen last year, according to market research firm Fuji-Keizai.
Only 27% of lithium currently goes into batteries, according to the annual report of Sociedad Quimica y Minera de Chile SA, which claims a 30% market share of the alkaline metal. Lithium is also used to make ceramic glass and coatings, to cast steel and as a component in lubricating greases.
The metal is extremely lightweight, heat resistant and has other properties that also make it ideal for rechargeable batteries.
James D. Calaway, the Houston-based chairman of Orocobre, said in an interview that mining companies active in the Chilean salt flats can increase production, but as with oil fields, lithium reservoirs can be damaged by too-rapid extraction, curtailing future productivity.
Mr. Calaway added that his company had considered investment proposals from one of China's largest lithium-chemistry companies, as well as other companies in the lithium supply chain. "The Asian lithium-ion battery and auto sector is taking a very proactive approach" to securing supplies, he said.
Japanese electronics makers, facing losses on TVs and other consumer electronics, are making a big push to supply lithium-ion batteries for the hybrid and electric vehicles of the future.
Toshiba Corp., Hitachi Co., and NEC Corp. have all made investments in the lithium-ion battery business for automotive use, while Panasonic Corp. bought a majority stake in Sanyo Electric Co., the world's top supplier of lithium-ion batteries, to carve out a stronger footing.
Toyota and Panasonic are partners in the development and production of lithium-ion battery packs for electric cars. Sony Corp. has also said it is considering entering the car battery business.
To secure supplies for those companies, Japan's trading companies, such as Mitsubishi Corp. and Sumitomo Corp., have been active in searching out opportunities in Latin America especially in the lithium-rich countries like Bolivia and Chile."





Bloomberg:


Orocobre, Toyota Partner to Develop Lithium Project



Orocobre, Toyota Partner to Develop Lithium Project
By Nichola Saminather
Jan. 20 (Bloomberg) -- Orocobre Ltd., an Australian mineral exploration company, will partner with a Toyota Group company to develop a lithium and potash mine in Argentina.
Orocobre will establish a joint venture with Toyota Tsusho Corp., the trading affiliate of Toyota Motor Corp., to develop its Salar de Olaroz lithium potash project in Argentina’s northwest Jujuy province, the company said in a statement to the Australian Stock Exchange.
Toyota Tsusho will acquire a 25 percent stake in the project, based on the cost achieved from a feasibility study to be completed in the third quarter of 2010, Orocobre said. The Nagoya-based company will also provide $4.5 million for the study, and will obtain a low-cost Japanese government loan to fund at least 60 percent of the project’s development.
The partnership means Orocobre won’t need additional funding for the project’s development, Orocobre Managing Director Richard Seville said in the statement.
“Toyota Tsusho becoming our strategic partner allows Olaroz direct access to Toyota Motor Corp. and its partners such as Panasonic and Sanyo,” Seville said. “These companies have significant expertise and understanding of supply requirements in large format lithium-ion batteries for the automotive industry and consumer sector and that will add greatly to our understanding of end-user requirements and demand.”
Orocobre shares surged as much as 64 Australian cents, or 46 percent, to A$2.04 as of 11:24 a.m. in Sydney.
Project Overview
Orocobre will own the remaining 75 percent of the project after construction is completed, and will operate the joint venture, the company said.
Construction is expected to be completed by early 2011, and the mine will be operational by the end of that year, Orocobre spokesman Paul Ryan said in a telephone interview.
Toyota established a joint venture in 2007 with Panasonic Corp., then Matsushita Electric Industrial Co., to ensure supplies of lithium-ion batteries for the automaker’s planned plug-in hybrid cars.
Toyota Tsusho is seeking reliable, low-cost lithium supplies to meet rising global demand for lithium batteries for automobiles, the company said in the statement.
“The size and quality of the deposit is world-class and we believe will produce high-purity, battery-grade materials required for the global battery industry at a cost that is competitive with existing lithium brine producers in South America,” Toyota Tsusho said."

China Dominates The Global Rare Earth Metals Industry TNR.v, CZX.v, AVL.to, RES.v, QUC.v, WLC.v, LI.v, RM.v, LMR.v, ABN.v, HAO.v, BYDDY, NSANY, TM, F


Contrary to the reply of Chinese expert, we think that this global expansion by Chinese companies in REE sector is already under way. China still remembers how it was blocked in U.S. in energy deals in Oil sector and in Australia in Rare Earth Elements, they can chose this time a low profile approach in Canada.
Now we can have an another view on some recent investments by Chinese companies. Conclusion could be made, that by making a low profile investments in Canadian juniors Chinese companies are actually developing a well planed strategy if not to control, but at least to secure access not only to basic commodities like Zinc and Copper, but to strategic resources of Lithium and REE on a world-wide basis:

"One day we can wake up with new shareholders in TNR Gold with a very deep pockets. Recent news on Tongling acquiring Copper assets in Ecuador with Chinese Railway Construction Corporation speaks for itself about place of this company in Chinese Government circles. It is no surprise that Los Azules has attracted their attention.
"
China's second largest copper producer, Tongling Nonferrous Metals Group Holdings Co, has joined with China Railway Construction Corp (CRCC) to make an agreed bid for Canada's Corriente Resources Inc."








Idea of Rare Earth Elements' importance for the high tech and clean energy industries is filtering through mass media on the investors radar screens. We are expecting a great deal of government push into this sector in all countries, including China, and investors will follow with their money later.

"It is our second investment bottleneck. This investment area could have even more potential then very exciting Lithium opportunity itself. If in Lithium space resources are presented in more or less available form even in a tightly controlled market, REE market is controlled by China with over 95% of the market under its influence."



SAI is very provocative this time with their headline:



"Here's How China Came To Kick The World's Ass, And Dominate The Global Rare Earth Metals Industry





Joe Weisenthal Jan. 18, 2010, 12:09 PM
The latest edition of The China Analyst hits on the hot topic of rare earth metals, and includes an excellent interview with Chinese professor Fu Zhongde, a scientist deeply involved in the country's advancement of this industry. (via MineWeb)
Will the Chinese government encourage domestic rare earths companies to ‘go global'?
I am afraid the government will not do so. If, on the one hand, the Chinese government regulates the industry and limits rare earth exports, while on the other hand encouraging REE companies to go global, it would be contradictory and unfair. I do not think the government will do this. (S-???)
What is currently the status of Chinese rare earth processing technology compared to the rest of the world? How advanced is it exactly? Will China require technological assistance from overseas?
Rare earth processing technology in China is highly advanced and can be regarded as filling an important gap in the world. China can supply REE products as pure as 99.9999%, while for example French companies can only produce 99.999% pure products and Japanese firms generally produce 99.9% purity products. In addition to the purity, Chinese technology now uses low energy consumption, creates no pollution, and utilises a zero discharge process. So in terms of rare earths processing technology, China definitely leads the world and is certainly very competitive. I can attest to that myself, being the owner of a few patents in the field of ion exchange technology.
The full interview and more is found in the report below.



http://www.businessinsider.com/heres-how-china-came-to-kick-the-worlds-ass-and-dominate-the-global-rare-earth-metals-industry-2010-1"

MineWeb has put a very good overview of REE sector recently:

MineWeb:

RARE EARTHS
Rare Earths in China: Cornering the market or a victim of its own success?

A closer look at the history of the rare earth industry in China, the recent controversies surrounding it, and some of the upcoming trends to watch.

Author: Lilian Luca Posted: Sunday , 17 Jan 2010
BEIJING -
In addition to all the other trade disputes involving China-tyres, steel pipes, books, chicken, etc.-2009 has also brought up a relatively obscure issue that keeps coming back with a worrying consistency. This is the issue of rare earths, where China has a dominant position as producer. The Chinese government has imposed ever-increasing export duties and quotas on the rare earths industry, and there are recurring rumours that the most valuable of these elements will be banned from leaving China.
What are rare earths and why are they important?
The Rare Earth Elements (REEs) are a group of 15 chemically-similar elements called lanthanides (from element 57, lanthanum, to 71, lutetium). Commercially, REEs also include two elements not strictly in the REE group, but which share with REEs some chemical, functional, and occurrent features: scandium and yttrium. They are all usually soft, ductile metals, with very unique properties: catalytic, magnetic, optical and others. REEs are sometimes referred to as ‘industrial vitamins' due to the fact that tiny quantities of them, when added to other elements, tend to confer unique properties on the latter. In many applications, moreover, no substitute has been identified for a particular REE.
The REE elements surround us in our everyday lives by being a part of common high-technology and modern equipment. Of the more familiar applications of REEs, neodymium is probably the most widely known, as it is used in the light magnets found in earphones, mobile phones, hard disk drives, and hi-fi speakers, among others. Europium is present in the LCDs (liquid crystal displays) of computer displays and flat-panel television sets, while fibre optic cables that power the Internet depend on erbium. The lenses in photo and video cameras are almost exclusively polished with cerium oxide, and the even more popular high-efficiency fluorescent light bulbs contain a few different REEs. Other common applications of REEs include as catalysts in oil refinement and as an aid for the cleaner burning of fuel in automobiles, lasers, pigments, superconductors, medical imaging devices, as well as in a range of other metallurgical and nuclear applications.
REEs are not, strictly speaking, that rare. The least common of them, lutetium, is more common in nature than silver, while the most abundant REE, cerium, is more prevalent than copper. The problem with mining REEs, however, is that they are rarely found in economically viable concentrations, and tend to occur together as a group, creating additional issues with separation. Furthermore, the so-called light rare earths (LREEs) such as cerium and neodymium are more common and therefore cheaper than the less common and therefore very expensive, heavy rare earths (HREEs) such as dysprosium and terbium
Burning issues with rare earths
The latest controversy surrounding REEs is, in a nutshell, the following: China controls over 93% of the world's REE production. Every year China reduces export quotas and raises the export duties for REEs, yet advanced ‘industries of tomorrow' (for example, wind turbines, electric and hybrid cars) worldwide depend on the availability and affordability of REEs. Moreover, important defence applications (anti-missile defences, jet engines, missile guidance systems, etc.) also use REEs widely, thus making the issue of Chinese-only supply especially sensitive.
China possesses around 50% of the world's REE reserves, and has over the past two decades supplanted the US as the premier world REE supplier, due to a few significant factors. First, the development of REE resources has over the years received Chinese government support (some sources even quote Deng Xiaoping saying that one day China will become ‘the Saudi Arabia of rare earths'). Second, at the world's largest deposit of REEs, Bayan Obo (Baiyunebo) in Inner Mongolia, rare earths are produced as by-products of iron ore mining, which dramatically lowers their cost. Thirdly, China has also benefited from being naturally-endowed with rich, accessible HREE-containing deposits, such as the ion-absorption ores in the south of China. Lastly, the numerous small players active in mining and processing REEs are highly competitive, while the ‘China factor' helps keep production costs among the lowest in the world, in a fashion similar to China's other manufacturing industries.
In a way, China's REE industry has become a victim of its own success. On the one hand, low production costs in China have made deposits outside China uneconomic, while at the same time increasing the range of viable REE applications. With new applications and a multitude of competitive local suppliers, China has also developed a vibrant, sophisticated group of REE-based product suppliers for downstream applications (REE oxides, neodymium magnets, electric motors). The recent successes of Chinese wind turbine producers and the ever-growing number of electric bicycles on the streets in China are, to some extent, due to the local availability and affordability of neodymium-containing permanent magnet components of electric motors and generators, and an integrated Chinese supply chain for such products. World leaders in REE applications, such as Rhodia of France and Showa Denko of Japan have built manufacturing facilities in China, thus increasing the share of value being added to REE products in China, and transferring some of their skills and know-how to Chinese industry.

But on the other hand, the fragmented nature of the Chinese REE processing industry has also generated various problems-pollution, overly-intensive mining, smuggling of REE materials abroad, low extraction rates, and low R&D expenditure by most players due to a lack of scale. The Chinese government has over the years been steadily reducing the REEs available for export via quotas and export duties, while also actively encouraging M&A activity to increase scale and sophistication. This year, significant progress has been achieved in consolidating China's REE industry-three major players in China (Baotou Steel's REE division, Minmetals and Jiangxi Copper) have been identified as the companies to receive government support and were chosen to lead the industry's consolidation. Additionally, Baotou Steel has announced a joint venture with China Investment Corporation, which means additional financial and political support.

Recent developments
As with virtually every other traded commodity, REEs saw significant price increases in 2006-2008. The global financial crisis introduced some price corrections, and currently suppliers in China do not have any problems meeting market demand. But with increasing demand from booming industries such as hybrid and electric vehicles, electric bicycles, wind turbines, car batteries, and other ‘green' applications, combined with the Chinese government's plans to limit supply and consolidate the industry, it is certain that new sources of supply outside China will be required.
There are quite a few production sites being developed at the moment, for example, in Australia, Canada, South Africa and Greenland. Unfortunately, most of them will not be able to ramp up output until 3-4 years from now, and significant environmental, technological and financing concerns may yet keep production costs high and supply outside China uncertain. According to Roskill, this new supply will become available just in time, as by 2012 China's own elevated demand due to the growth in high-tech industries will have outstripped local supply.
The implications are sobering for the world's mining community and for investors, as well as for governments. The Chinese supply of REEs may become increasingly expensive and priority may be given in the future to China-based users (which can, however, be foreign-owned). In our opinion, China is tightening control as a means of ensuring a stable and affordable supply to its domestic high-tech firms, as well as to increase the value being added to REEs in China. It is most likely not trying to ‘corner the market' in REEs or attempting to extract higher prices from buyers.
Most REE properties outside China are risky investment propositions due to their need to be mined as standalone minerals (rather than by-products), high environmental and technological costs, and lack of large-scale, efficient processing facilities, and momentary dearth of capital. Without significant government or substantial corporate support (from leading world manufacturers that use REEs such as Toyota or GE) deposits outside China risk not being developed in time to meet growing demand, which puts high-tech industries in the US, EU and Japan at significant risk of tight supplies and escalating costs for REEs."

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