Metals

Depleted Uranium

So three blokes in China have been found smuggling depleted uranium.

The scrap merchants, two brothers and a friend, found the lump of low-radiation uranium metal in a yard in Bishkek last year. Attracted by its shiny surface and its “gold sparkle”, they haggled the dealer down to a price of $US2,000 for what both sides regarded as a treasure – but neither could identify.

Quite a piece of it too….600 lbs odd.

A long time since I had a market price for this stuff but they got a bargain there I think. $9 a lb is (from an all too infallible memory) about the right price so there was a few thousand $ in profit for them….if only they knew where to sell it of course.

Andrew Roberts

Writing about spies and Stalin\’s bomb program:

But the knowledge that the Soviets, relying on their Siberian uranium and plutonium deposits, could theoretically build an unlimited number of H (hydrogen) bombs and A (atomic) bombs, meant that such international brinkmanship would henceforth always herald the possibility of global Armageddon.

Now that is new information. Siberian plutonium deposits, eh? And there was I thinking that plutonium was a man made element, created in reactor piles by the use of Uranium in them.

That\’s certainly the way we Brits and the USians got their plutonium so the Soviets really were very lucky to have it just lying around, weren\’t they?

Not quite, not quite.

In all of the Soviet Union\’s existence, where research was considered a priority, not one discovery was made that scientists in the free world considered worth using.

A couple in metallurgy: the use of scandium in aluminium alloys for example.

An extremely poor return on the money and effort put in, I agree, but "not one" is too extreme.

Update: I\’m told by Pollard himself (ooooh, look at him, swank, swank) that the subs left out the word "pharmacology" which would have made his point a great deal more supportable.

 

Invest in Aluminium?

Here\’s the pitch. Energy prices are way up, the bulk of the cost of aluminium is energy in production, so shouldn\’t aluminium rise in price?

We were all rocked by the news that British Gas had imposed a whopping 35 per cent increase on energy bills – and its rivals will undoubtedly follow suit in the coming weeks. This is a huge blow to households already wilting under higher mortgage costs, higher food costs and higher petrol prices. An aluminium exchange traded fund, which tracks an aluminium index, could be a route to profiting from the sky-high energy costs.

The manufacture of aluminium uses immense amounts of energy: it takes 15,000kWh to make a tonne of aluminium, compared with 67kWh for lead. Again, supply is constrained yet the metal is used by the automobile industry and in consumer durables, mobile phones, LCD televisions, MP3 players, cans and foil. Again, experts argue that the growth of China will fuel the demand, which they reckon will outstrip that for any other metal.

Well, mebbe. Except the aluminium companies know the energy cost of Al of course. So the plants are deliberately put in places where there\’s lots of cheap energy. Indeed, lots of energy that cannot be used in other ways. Like hydro projects in the wilds of Quebec, or Iceland for example.

Sure, there\’s some effect (it\’s been known in times of high energy prices on the West Coast for Al companies to turn off their pots and make more money selling the electricity they buy on long term fixed price contracts from hydro plants than bothering to use it to make Al) but a great deal of the industry relies upon power that can\’t be used any other way. Deliberately so. Indeed, many dams have been built specifically to feed Al plants….rather than build the dam and then set up hundreds of miles of high voltage cable to export the leccie (with all the associated transmission losses) it\’s cheaper by far to import the alumina and export the Al and the electricity embedded into it.

This doesn\’t mean that Al won\’t rise in price….just that it\’s not a bet that I would take on this basis.

 

That Quantas Plane

So a piece falls off and there\’s an explosive decompression.There\’s one extremely odd thing that could have caused this. Indeed, I\’ve heard (anecdotally) that it has actually happened in the past, on a Russian transport plane.

Now, no, I\’m not suggesting that this is what happened at all: it\’s just an opportunity to tell a little story from the world of weird metals.

Gallium. A low melting temperature (29 oC or so) means that in summer in the hold of a plane in certain parts of the world it will become liquid. The problem is that when liquid gallium meets the Al alloys that make up planes a hole appears in the Al.

As I say, I\’ve been told that this actually happened once in Russia, badly packed Ga leaked out, ate a hole in the plane\’s floor and left part of it sitting rather sadly on the tarmac while the rest of the plane taxied away.

 

Well Sorta Like

A small point:

The explanation lies in a deal struck in 2005 whereby Mr Mugabe handed over to China his country\’s mineral rights, including the world\’s second largest reserves of platinum, worth £250 billion.

It\’s sorta right and sorta very wrong indeed.

To get to something like that figure you have to use the gross value of all the metal if it were mined…..but then apply that valuation to the metal as it lies still in hte ground.

There are a couple of comparisons to this method of valuation. One is the police when they intercept some drugs. They always take a high end valuation of street prices (say, £50 a gramme or whatever) and then multiply that up to tonnage weights. Even when the stuff they\’ve caught is actually on a boat in the Caribbean, not in eighths in Bermondsey. They\’re ignoring the point that drugs change in value dependent upon location (most especially which side of a border they are….which is really rather why people smuggle them) and all the other things, packaging, quantity etc.

The second is the way in which firms wail about the cost of counterfeiting. The biggest whiners are the software industry….$squiddley billions are lost each year by Chinese copies and so on. They value each copied licence at full retail. When it\’s blindingly obvious that not everyone who has a 50 cents knock off would be willing to pay $400 for a legitimate copy. At least, if the economists are correct about demand curves sloping downwards they\’re not (umm, while we might indeed regard Microsoft software as an inferior good, we wouldn\’t regard it as a Giffen Good).

This valuation of the metals resources above is wrong in the same way. The impression given is that there\’s £250 billion in profit to be had…..which really ain\’t the case. That\’s the value being assigned to the total possible production, when produced….without subtracting the costs of doing the producing.

Think of it this way….I\’ll bet you that the tin in Cornwall is worth $5 billion. So why is no bugger mining it? Because it\’ll cost more than $5 billion to get it out of the rock.

Perhaps when this blogs\’ mining engineer correspondent returns he\’d like to elucidate further?

It\’s not that the £250 billion figure is wrong so much as it\’s terribly, terribly misleading.

George Today

Actually, he\’s quite fun today. Airships. Sure, I\’ll get behind that, however, one teenise technical detail he\’s missed:

A new generation of solar panels relies on gallium and indium, whose global supplies appear close to exhaustion.

Erm, no. Not even close. Both are extracted as by products from other mining processes. Both require only the addition of a capture circuit to those existent processes. We most certainly don\’t have capture circuits on all of the plants that could support them.

Now these are rough numbers, pulled from memery. But there are some 35 Bayer Process plants around the workd. These are the plants that take in Bauxite and spit out Alumina (aluminium oxide). Gallium can be captured from this process: but, while I\’m not certain of the number, I\’m almost certain that less than ten of the plants have such capture circuits.

There\’s also all of the red mud (the waste from this process) of the past 50 years or so of the global aluminium business lying around in ponds that can be processed to extract gallium should anyone want to do so.

And no, no one at all goes mining for Gallium (or indeed Indium) so to claim that supplies are near exhaustion is, umm, a little odd.

Update. This file.  Global reserves of gallium are some 1 million tonnes. Global production is around 100 tonnes.

Meaning that we\’ve got some 10,000 years\’ supply  just in the rocks we know about.

Close to exhaustion that ain\’t.

A New Element

You know, this makes so much damn sense it\’s amazing that no one thought of doing this before.

If we think (as many do) that the actinides and  above become stable near or around element 120, then instead of sweating buckets trying to make them, why not go and look and see if there are traces of those stable elements out there?

Et Voila!

We find them.

Simple ideas, eh?

Thallium Poisoning

A slightly odd report in The Guardian about a case of thallium poisoning in Iraq.

Thallium is a highly toxic soft radioactive metal that was once widely used in rat poisons and insecticides.

It ain\’t, I\’m afraid, radioactive. There may or may not be radioactive isotopes (I\’ve not bothered to look that up) but the commercial material itself is not radioactive.

There\’s also one other thing about this. The individuals may well have been poisoned by thallium. But not, perhaps poisoned by thallium, if you get my rather odd meaning.

"This is a disturbing incident," said Mohammed Abbas, a police official. "The use of thallium in this way appears to show that someone in Adhamiya is reviving the techniques of the mukhabarat [the Saddam-era secret police].

"What happens if al-Qaida gets the know-how? We are urgently trying to discover how much thallium is out there and who would know how to utilise it."

This information is a little out of date but certainly there was (perhaps still is) a thallium based cockroach poison. And yes, it was (perhaps is) popular in the Middle East. So while it is indeed thallium poisoning, the cure for which is Prussian Blue, from the point of view of the poisoner it\’s not so much that, it\’s adding cockroach "chalk" (that\’s the form the insecticide comes in) to the food. It\’s not a matter of "know how" really.

AE Bullion

American Elements has launched something called AE Bullion. This post should be considered as a warning not to actually buy any of their products.

Los Angeles based American Elements announced today the launch of AE Bullion™. The new product group will mint certified high purity coins and bars from approximately sixty advanced, rare and less common metals for short and long term physical investment. Metals include rhodium, tellurium, indium, hafnium, scandium and the 14 rare earth elements; all metals which have experienced dramatic world price increases in 2007.

Coins and bars will be minted from assayed materials produced by American Elements\’ AE Metals™ high purity refining group. Coins will be available to hedge funds, currency reserves and exchange traded funds (ETFs) in order to establish tradable securities and to allow for exposure and controlled risk to commodity and industrial demand fluctuations. Also, private investors, collectors and hobbyists can now take direct physical title and possession to these metals with risk exposure equivalent to movements in the world spot price.

Portfolios of different elemental metal coins and bars may also be structured allowing for strategic risk allocation and indexing across a basket of metals. American Elements will offer bonded short and long term warehouse inventory services for AE Bullion™ coins to investors, funds and collectors who do not wish to take physical custody of the metal or lack secure storage or warehouse capabilities.

This is a terrible idea, seriously awful, from the investors point of view. The first and most important point is that these metals don\’t have liquid markets. Taking scandium for example: as regular readers will know I make my day job living dealing in the material. But in over a decade I\’ve never actually sold the metal itself to anyone. The oxide, yes, the oxide when made into a aluminium master alloy, yes, but not the metal. I would be astonished if the global market in 2007 was more than 1 kg of the metal in total. The same goes fo many of the rare earth metals (some do indeed have markets, others, ytterbium etc, not. I once had a piece of lutetium and the only thing I could manage to do with it was sell it to someone who prepared elements for collectors.). Further, even where there are markets fo them, no one ever buys them piecemeal. Long term supplpier contracts are the order of the day. Hafnium as coins and bars also strikes me as rather silly: a typical Hf metal purchase would be 500 kg to 5,000 kg. Piddling about with an ounce or two in a coin simply won\’t happen.

Rhodium is something that might be worth speculating in but there\’s already a mechanism to do that. Open an account at Johnson Matthey and get on with it.

This has overtones (and no, I\’m not making an accusation here of it being the same) of a program that went on a decade ago, with indium and germanium. An investment boiler house was selling these "vital electronic metals in short supply" by the ounce to impressionable retail investors in the US. They were paying $ hundreds an ounce to take physical possession of material worth, at that time, $10s per ounce. Usual hard core telephone sales techniques.

Prices did indeed rise but not enough to cover the marketing mark up: and anyway, with these metals it\’s an industrial market. Buyers are the big electronics companies and they pick up a tonne or two at a time.

The basic point is that these metals are really not for the private investor as there are no liquid markets. And even when there are, they\’re not in the sort of quantities that a private investor would be dealing in. With the exception of rhodium (where, as noted, there is already a mechanism) this just isn\’t a sensible place to go speculating.

Disclaimer: yes, I do deal, or have done, in several of these metals. Yes, I would benefit if a private market was created to speculate in them. Yes, I still think it\’s an extremely bad idea that you shouldn\’t go anywhere near.

There was in fact a scandium metals futures market in Moscow in the early-mid 1990s. It collapsed after about 50 trades as there was no terminal market. This idea will face very much the same problems.

 

 

Mainstream Minerals Corporation

Just a minor point for Mr. Google and anyone who might have received the press release from Mainstream Minerals Corporation:

New 40 ft intersection with a grade of 13.54 g/t Gallium (Ga), 21.50 g/t Scandium (Sc), 12.98 g/t Rubidium (Rb), 20.27 g/t Cerium (Ce), 8.25 g/t Lanthanum (La), 12.03 g/t Yttrium (Y), 1.83 g/t Ytterbium (Yb), 3.23 g/t Selenium (Se), 6.76 g/t Lithium (Li), 3.58 g/t Cadmium (Cd), 4.28 g/t Niobium (Nb), 2.25 g/t Hafnium (Hf), 38.57 g/t Cobalt (Co), 79.29 g/t Vanadium (V), 83.61 g/t Strontium (Sr), and 96.53 g/t Zirconium (Zr).

Those concentrations of rare earths are what is commonly known as "dirt".

All these metals have significant economic and strategic value and depending on purity and lot size, individual powders refined into metal may range in price from US$15.00 per kilogram for lanthanum metal, to US$30,000 per kilogram (US$30.00 per gram) for scandium metal. Some of these metals like Rubidium, which is not actively traded, have sold for as much as US$58.20 per gram.

Worth noting that scandium metal is also not "actively traded". I would be astonished if more than 10 kg a year was sold annually, globally.

 

Commerce Resources Corp

Just a quick note for any thinking about investing in a company called Commerce Resources Corp.

In the company\’s press release here they seem to have  made a small error.

Rare earth oxides, which are processed into powdered form, may range in price from US$3.00 per kg, for cerium oxide to US$15,000 per kg for scandium oxide.

That\’s an at least ten times over estimation of the price of scandium oxide. For bulk uses (ie, anything over about 100 kg a year) perhaps 30 times.

Not wildly important, I know, but perhaps Mr. Google will help bring this to the attention of anyone searching for information on the company.