Metals

Silicon is the crude oil of the Digital Age. Millions of metric tons are mined every year in China, Russia, Norway, the US and elsewhere, much of which is used in the $500 billion global market for semiconductors.

Not so much, no.

The majority of the world production which is done mainly in China and Russia (in 2014 about 7 million tonnes) is used as an alloy component for steel and aluminium, as well as a raw material for the production of silicones.

Only about 2% of the raw silicon is prepared for hyper-pure silicon as described in the following section,
of which approximately 90% is used for the manufacture of silicon solar cells. Some 100 tonnes a year
are ultimately used in the production of silicon wafers for the semiconductor sector, which this chapter is
devoted to.

That 100 tonnes looks a little low to me but then what do I know?

It’s still true that silicon production for semiconductors is the merest fraction of silicon production overall.

The rest of the piece is very good.

Lithium and cobalt are nightmares to recycle and very toxic.

Where do these ideas come from?

Cobalt is recycled all the time. Get me a pile of scrap Co and I’ll have it sold by lunchtime. Even if you’re reading this at 11.45 am.

Lithium very toxic?

Sure, there’s something called lithium toxicity but this is about peeps who have a pharmaceutical dose that’s too high. It’s not about someone leaning up against a battery.

Sigh.

Jadarite, a mineral unique to the valley, contains lithium, a fundamental component in batteries, which is in increasing global demand thanks to the boom of the electric car industry. Experts believe that there could be as much as 200 million tonnes of lithium ore — a tenth of the world’s supply — in the land surrounding the town of Loznica, the region where Kokanovic farms.

“Could be” tells us that this isn’t a mineral reserve. This is, at best, a resource. And 200 million tonnes of ore grading 1.8% ain’t 10% of the world’s supply of anything.

It was originally estimated that there are 200 million tons of the lithium borate ore, which would make the future Jadar mines one of the world’s largest lithium deposits, supplying 10% of the world’s demand for lithium.[8]. Later on, United States Geological Survey concluded that lithium supply is closer to 1.51% of world’s demand for lithium.

Even that’s not right because it’s still mixing and matching definitions. If it all exists, if it’s all mined, and if other people don;t open up other mines, then it might be that single percentage point or two of global supply. And at 3.6 million tonnes of, so far, resources:

Owing to continuing exploration, identified lithium resources have increased substantially
worldwide and total about 86 million tons. Lithium resources in the United States—from continental brines,
geothermal brines, hectorite, oilfield brines, and pegmatites—are 7.9 million tons. Lithium resources in other countries
have been revised to 78 million tons. Lithium resources are Bolivia, 21 million tons; Argentina, 19.3 million tons; Chile,
9.6 million tons; Australia, 6.4 million tons; China, 5.1 million tons; Congo (Kinshasa), 3 million tons; Canada,
2.9 million tons; Germany, 2.7 million tons; Mexico, 1.7 million tons; Czechia, 1.3 million tons; Serbia, 1.2 million tons;
Peru, 880,000 tons; Mali, 700,000 tons; Zimbabwe, 500,000 tons; Brazil, 470,000 tons; Spain, 300,000 tons; Portugal,
270,000 tons; Ghana, 90,000 tons; and Austria, Finland, Kazakhstan, and Namibia, 50,000 tons each.

Or, that 1.2 million more conservative resource indicated there for Serbia.

All of that before we even begin to think about seawater content, something that people are claiming they can extract economically now…..

It’s a nice deposit there in Serbia. But it ain’t a mineral reserve – Rio Tinto hasn’t even designed the extraction technique yet, let alone defined the deposit – and as a resource it’s a nice little addition to global supplies but no more than that.

No idea whether it actually works but fun all the same:

Despite mind-boggling technological change in almost every part of life over the past 100 years we still transmit electricity and electrical communications over copper wires. Tirupati says it has produced a new substance, a mixture of aluminium and a type of graphite called graphene, that can be used to make wires with superior technical qualities – qualities that will bring benefits such as increasing the capacity of airliners.

Hmm. well, OK. One thing here is that to make graphene you don’t have to start with graphite, although that’s an aid. It’s just carbon and can be made in other ways. Yes, OK, that’s like saying diamond is just carbon but then that’s also true, you can make diamond without the kimberlite and the volcano.

So, aluminium plus carbon beats copper for wiring does it? Ain’t that a fun story about substituitability? And makes some of those worries about running out of metals for the green revolution go away too.

Yes, there is lithium in the geothermal waters in Cornwall. Yes, it can be extracted. Profitably? Well, that’s to be found out.

And then a little alarm bell:

“We would not be spending money if we didn’t think it was a very large opportunity,” says Wrathall. He says they have also found cesium, used in 5G networks, although the potential to exploit it remains unclear.

Well, yes, there’s cesium in there. The rock that lithium is being dissolved out of will contain it. However, thinking that you’re going to extract cesium is one of those well, hmm, do these people actually know what they’re talking about moments? And for 5G? Well, yes, atomic clocks, but the volume required is tiny.

The time to start heading for the hills is when they mutter about the closely allied rubidium. Yes, it’s $12 a gramme. Lovely stuff too. But with a global market of a couple of tonnes a year not something upon which mining companies are built…..

The ambition is a fully circular economy,

If he raises enough to satisfy the creditor demands of Credit Suisse, then Sanjeev Gupta will be left as the operator of Britain’s only electric arc furnaces and aluminium smelter.

Only electric arc? Nonsense.

It’s blast furnaces that are thin on the ground…..

It’s certainly familiar:

The first thing you need to know about rare earth metals, the 17 crucial elements that could shape our economic future, is that they’re actually not that rare. There is more cerium in the planet’s crust than there is copper or lead. Neodymium is more abundant than tin. There are rare earths in Wales, Scotland and the Pennines.

What makes these elements rare is not so much their scarcity but the fact that they are fiendishly difficult to process. Even when you find more concentrated grades, extracting them from their ores and turning them into something useful takes an extraordinary effort.

Well, except for the bit about extracting them from their ores – that’s trivially simple. Separating them one from the other now, yes, that’s tough. Where Ed Conway goes wrong though is:

Given what really matters with rare earths is not so much finding them in the ground as processing them, there is nothing to stop this country from becoming a leading producer. One Australian mining firm, Peak Resources, is hoping to extract rare earths from a mine in Tanzania before shipping them to a site in Teesside for processing.

No. Building a separation plant up on Teeside – using current technology that is – won’t work. Because it still doesn’t deal with that problem of being reliant on overseas supplies, does it? Nor with requiring long runs of homogeneous material. What we want is a new method of separating the rare earths, one from the other. So we can use short runs of material, wastes from other mining processes, domestic supplies if we wish – even, this would help massively with recycling efforts.

As it happens Teeside would be the best place in the world to do this too. All of which is an interesting test of the Mazzucato thesis. Government does the stuff that private industry won’t or can’t so all hail government. Except it doesn’t, does it?

A giant gold coin weighing 22lb (10kg) and worth £10,000 has been produced.

Lessee – 30 odd troy ounces to a kilo, 22 lbs is 10 kg (sorry, but these are the numbers that stick in the head) and $2,000 a troy ounce for gold. Roughly, between friends.

So that’s $600,000 for sale for £10,000. Send me a truck load.

The mint said the price of the £10,000 denomination gold version was available on application.

Ah, bugger.

Neodymium (Nd) is by far the most valuable RE metal by volume (few sellers).

Tons Per Year(tpy) vs Markup:

Global Iron Ore production 3.3 billion tonnes per year (tpy)
Global Steel Production 2.3 billion tpy

Conversion Markup: Oxide to Metal 200 to 500%

New Global Nd Oxide Production* ~ +30,000 tpy
New Global Nd Metal Production* ~ 25,000 tpy

Conversion Markup: Oxide to Metal ~ 10%
The chemical process of converting iron ore to steel and RE oxides to metal is exactly the same. Iron to steel tends to be large batch & mechanized, rare earths are produced in small batches, by hand (literally by hand)

Iron ore to steel is not the same as Nd oxide to Nd.

Iron ore to iron is the same reaction – extracting the oxygen even if it has to be done in a different way – but then you’ve got to get iron to steel by adding in carbon……

If this really is essential that is:

ADS, an aerospace trade group, wrote to Business Secretary Kwasi Kwarteng last week to warn about the impact the failure of the speciality steel division would have on firms such as Rolls-Royce.

Kevin Craven, head of ADS, said: “ADS urges the UK Government to support the continuity of production at Liberty’s steelworks”, noting the Rotherham and Stocksbridge sites “produce most of the stock for aerospace”.

Rolls Royce and such should buy the firm.

Hmm, what’s that? It’s not that essential? Then it’s not essential, is it?

A magnificent tall tree called Pycnandra acuminata grows on the island of New Caledonia in the South Pacific, and it does something strange – when its bark is cut it bleeds a bright blue-green latex that contains up to 25% nickel, a metal highly poisonous to most plants in more than tiny amounts.

An estimated 700 plant species have unusually high levels of metal, mostly nickel but not in all cases. The macadamia tree has leaves and sap rich in manganese, although fortunately not in the nut. If such metal-containing plants are dried and burned to ash they yield extremely rich, high-grade metal ore, with far less pollution and using far less energy than needed in conventional mining. Perhaps this could offer new sources of much needed metals. It is highly unlikely they could fully replace traditional mining, although they can also help clean up soils contaminated with toxic metals.

Sigh.

The nickel must be in the soil in order for the tree to concentrate it. So, what’s going to provide the nickel we want, waiting a century for the tree to grow, harvest, then plant again for the next cycle to lift 1% or whatever of the soil’s nickel?

Or dig up the soil the tree is extracting from and extract directly?

And when you say you want 50,000 tonnes a year of Ni…….

The electric car boom risks being stalled by a severe shortage of a crucial ingredient used in batteries within the next decade, analysts have warned.

Car makers will face production delays on millions of electric vehicles as mining for lithium fails to keep pace with soaring demand, according to Rystad Energy.

Mining capacity can cope with current demand in electric vehicles, but car makers will face “a serious lithium supply deficit” from 2027, the energy research firm predicted.

Everyone and their mother is trying to extract lithium currently. Lithium mines are actually going bust so many are trying to open.

Seriously, the prospect of high profits is quite enough to get people digging holes in the ground. Which is why I could list 20 such projects in embryo at least 10 of which will themselves go bust as extra supply far outstrips future demand.

Even you can do better than this:

A rare earth like neodymium begins life as a mineral encased in another mineral. Once pulled from the ground, the rock has to be crushed and cracked – a process that involves heating the material to break the chemical bonds that bind it together. After that comes “leaching”, where a chemical wash is used to dissolve the rare earth so it can then be gathered up as a concentrate. From there is refined into a pure oxide ready for manufacture.

Seriously?

Why not try getting someone who knows some science to write your science articles?

An email correspondent writes to query a piece out there about molybdenum prices. They’re rising. They’re rising because China demand. So, what oogieboogie is China up to to drive the price of molybdenum up and thus murder us all in our beds?

My response is less than temperate:

That’s a particularly stupid piece.

The answer is in there he just doesn’t recognise it.

China’s steel production is booming. We can see it in the iron ore price. It’s a part of the Chinese stimulus plan through infrastructure. The major use of Mo (80% of total) is in FeMo for steel making. There is no mystery here.

More steel means more FeMo use means more Mo use.

Now, if China was buying up metallic Mo, the major use of which is in superalloys – ie those not containing iron – then we’d have an interesting question. But that ain’t what’s happening.

However, it is understood that officials are unsure whether a state rescue of Liberty’s UK steel operations is even possible as Greensill, which provided billions of financing for GFG, may have first call on its assets.

That is going to pose more than a little problem…..

Bankruptcy of the steel assets seems, to my mind, likely. But if they’ve been used as security then The Bloke from Oz owns them at least as an intermediate position……

The development of new technologies such as hypersonic missiles and laser weapons is to be given a boost from the Ministry of Defence (MoD) with extra money, the Government has announced.

I have actually done some work on hypersonic weapons. Those Mach 5 and all rockets. Hmm, scramjets? The insides of those engines get very hot indeed. Which means you need hafnium carbide to line them. Which is not a usual material to have lying around.

So we made some for the Americans in Moscow. Nice little job too.

I stand ready when the nation needs me – although to be fair a Russian supply line might not be quite what they’re looking for…..

The steel tycoon Sanjeev Gupta is racing to underpin his empire with taxpayer funding by furloughing hundreds of staff at his biggest British plant within 48 hours.

Liberty Steel will furlough workers at its operation in Rotherham and Stocksbridge on Thursday after speeding up initial plans to use the scheme from next week, sources said.

The bid to use the job retention programme comes amid reports that Liberty has missed payments to HMRC for VAT and staff income taxes. GFG Alliance, the owner of Liberty Steel, declined to comment on the tax claims in the Financial Times.

Mr Gupta’s operation is under massive pressure after the collapse of his financial partner Greensill, to which his businesses reportedly owe around £3.6bn.

In his first public remarks since Greensill crashed into administration on Monday, Mr Gupta said that Liberty is facing a “challenging situation” but insisted it has “adequate financing to meet its current requirements”.

Well, if you don’t pay your banker £3.6 billion then you might well have enough money.

This is all very Adam Smith. New ways to finance are easy enough to find. New people worth financing are rare.

One of the world’s biggest commodity traders has fallen victim to an alleged fraud in which it paid $36m (£26m) for copper that was replaced with painted paving stones.

Worse, they paid out on the letters of credit (or some other payment method before inspection at least) and also the insurance was fake.

And to reach $36 million they did it on 4,500 tonnes, or 125 separate containerloads.

I’d be having a look at whether any of the clerks have a new gofaster motor tucked around the back or summat.

Even if we agree that both lithium volumes and also prices are going to rise significantly this does not mean that any specific lithium project is a goer. Firstly, it does rather matter how well the people running the project do so. It’s entirely possible, as we’ve seen with Altura, to have an operating mine, with customers and sales, even to be mostly covering or even exceeding operating costs with revenues and still go bust. Another way to make much the same point is that while mining a material may work that’s not really the point. In order to make a return for shareholders, it must be possible to cover the development costs as well as the operating ones. This is, as the perceptive will note, more difficult.