Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21
CISCO 2020 Dot com Bubble Stock vs 2021 Bubble Tech Stocks Warning Analysis - 6th Oct 21
Precious Metals Complex Searching for a Bottom - 6th Oct 21
FB, AMZN, NFLX, GOOG, AAPL and FANG+ '5 Waves' Speaks Volumes - 6th Oct 21
Budgies Flying Ability 10 Weeks After wings Clipped, Flight Feathers Cut Grow Back - 6th Oct 21
Why Silver Price Could Crash by 20%! - 5th Oct 21
Will China's Crackdown Send Bitcoin's Price Tumbling? - 5th Oct 21
Natural Gas News: Europe Lacks Supply, So It Turns to Asia - 5th Oct 21
Stock Market Correction: One More Spark to Light the Fire? - 5th Oct 21
Fractal Design Meshify S2, Best PC Case Review, Build Quality, Airflow etc. - 5th Oct 21
Chasing Value with Five More Biotech Stocks for the Long-run - 4th Oct 21
Gold’s Century - While stocks dominated headlines, gold quietly performed - 4th Oct 21
NASDAQ Stock Market Head-n-Shoulders Warns Of Market Weakness – Critical Topping Pattern - 4th Oct 21
US Dollar on plan, attended by the Gold/Silver ratio - 4th Oct 21
Aptorum Group - APM - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 3rd Oct 21
US Close to Hitting the Debt Ceiling: Gold Doesn’t Care - 3rd Oct 21
Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
Original Oculus VR HeadSet Rift Dev Kit v1 Before Facebook Bought Oculus - 3rd Oct 21
Microsoft Stock Valuation 2021 vs 2000 Bubble - Buy Sell or Hold Invest Analysis - 1st Oct 21
How to profit off the Acquisition spree in Fintech Stocks - 1st Oct 21
�� Halloween 2021 TESCO Shopping Before the Next Big Panic Buying! �� - 1st Oct 2
The Guide to Building a Design Portfolio Online - 1st Oct 21
BioDelivery Sciences International - BDSI - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 30th Sep 21
America’s Revolving-Door Politics Behind the Fall of US-Sino Ties - 30th Sep 21
Dovish to Hawkish Fed: Sounds Bearish for Gold - 30th Sep 21
Stock Market Gauntlet to the Fed - 30th Sep 21
Should you include ESG investments in your portfolio? - 30th Sep 21
Takeda - TAK - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 29th Sep 21
Stock Market Wishing Away Inflation - 29th Sep 21
Why Workers Are NOT Returning to Work as Lockdown's End - Wage Slaves Rebellion - 29th Sep 21
UK Fuel PANIC! Fighting at the Petrol Pumps! As Lemmings Create a New Crisis - 29th Sep 21
Gold Could See Tapering as Soon as November! - 29th Sep 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Minor Metals Investing Ups and Downs

Commodities / Metals & Mining Jul 05, 2011 - 02:34 PM GMT

By: Critical_Metals_Repo


Best Financial Markets Analysis ArticleThe critical metals space is shifting. In this exclusive interview with The Critical Metals Report, Dr. David Trueman, a consulting geologist, points to opportunities in global mining, processing and recycling of "-um" metals for growing electronic applications.

The Critical Metals Report: You started your geological career as a smelter mechanic in Thompson, Manitoba in 1962 before moving into academia, government, industry and latterly, consulting. The New York Times, the U.S. Government and investors have suddenly woken up to the importance of critical metals—minor, strategic and rare earth elements—for everything from miniaturization of motors to high-powered magnets for alternative energy and military applications. Has your background given you a deeper understanding of the explosion of interest in these materials?

David Trueman: Every geologist should have some metallurgy background in the same way geologists should spend time in mining—to see what's involved in the winning of metals. In the otherwise small business of rare metals, it is important to be conversant with all the processing steps, from exploration to markets.

TCMR: Many of these "-um" metals that you refer to are not well known to the typical lay person. But the products they are used in—cell phones, miniature motors and computer chips—comprise almost everything that plugs in. One area that hasn't had as much attention is minor metals. I believe you call them smokestack metals or refinery metals. What is the investment potential for this class of metals?

DT: We have moved into an electronic and a green age. The upside investment potential is large, but as specialized as some of the metals themselves. Some of these metals are mined, concentrated and purified through chemical processes. Others, such as some of the electronic metals, are recovered from smokestack emissions before refining. In some ways, their winning seems counter-intuitive.

TCMR: Are these metals usually mined as a pure play or could we get all of these metals through recycling or as byproducts of other mining process?

DT: Some of these metals, such as tantalum or zirconium, could be considered pure plays. They are concentrated, perhaps taken into solution, refined or separated and end up being used in near pure form. Others, such as tellurium, germanium and indium—what I call the smokestack metals—may occur with copper, zinc, lead, and tin deposits where the base metal is the primary product. These minor metals occur in very small, parts per million (ppm), amounts and they're recovered as byproducts, demand and price permitting. Gallium, a different example, is recovered as a byproduct of aluminum processing. It's very much in demand, but to get exposure to gallium, you would have to invest in an aluminum company. Quite a different investment from that in a junior miner. There is not a lot of leverage.

TCMR: If demand for gallium were to skyrocket, wouldn't aluminum companies become much more valuable?

DT: You would think it would report to the bottom-line, but in the bigger picture it's probably a very minor component. If you were to find a gallium pure play company you'd have quite a bit of leverage. There are juniors out there that have gallium deposits containing hundreds of ppm gallium. In contrast, the bauxite ores that gallium is extracted from may run 10, 12 or 14 ppm gallium levels.

TCMR: What is gallium used for?

DT: Gallium is used in gallium arsenide computer chips and solar cells. It has also been looked at as a substitute for mercury in dental fillings. Gallium, like mercury, is liquid at room temperature. It can be used for improved thermometers, providing a wider temperature range than a mercury device. But the application is limited because the supply is so limited. About 25 years ago, I received a phone call from an engineer looking for 40 tons of gallium. In his naivety, he was asking for 3.5 years of the world's gallium supply. It would have stressed the price enormously.

TCMR: In addition to gallium, what are some of these other minor metals that have interesting technology applications?

DT: Indium is a good one. Its first usage 100 years ago was to depress alloy solidification temperatures—or eutectic point—in lead crankshaft bearings for example. Today, it is in demand for applications such as mobile phone touch screens, video displays and phosphors in light-emitting diodes.

TCMR: Are there any primary indium mines? I know of some indium-silver mines in South America, but are there any pure indium juniors out there?

DT: There are no primary indium producers. A large supply of indium comes from treating zinc ores and tin ores. If a company were to find a silver or zinc deposit with indium or germanium in it and ship the ore to a smelter, it might even be penalized for the minor metal contents, let alone receive compensation. The processing could be considered metallurgically bothersome rather than a credit. These are things that would certainly have to be addressed by a junior mining company in valuing an ore.

TCMR: You would think that the presence of a substance such as indium, which is used in all these high-tech devices, would add a lot of value to a junior mining company's asset mix.

DT: Yes, it would certainly add significantly to a junior mining company's revenue stream; it would really leverage the value of the ore deposit if the ore can be processed and those metals recovered. As demand goes up, more pressure will be applied for a credit on those contained metals if the ore were to be toll processed or custom treated. Historically, there has been only one primary gallium-germanium mine that I am aware of and it treated its own ore with solvent extraction processing.

TCMR: Are indium, germanium, gallium and tellurium similar in their chemical composition and applications?

DT: I like to call these electronic metals. Their chemistry is different as they are different elements, but they all do similar good things to computer chips and solar cells. Their functions aren't new. One of Einstein's hobbies was playing around with photo emissive devices. However, they've just come into their own in the past two decades or so. About 20 years ago, the price of gallium was running around $400/kilo and germanium was $200/kilo. Ten years ago, someone developed a faster computer chip using germanium and the price immediately flip-flopped. Germanium took off but gallium halved in price.

TCMR: We haven't heard much about these minor metals as investment plays. Is it because they are required in such small amounts that companies are able to acquire them readily through byproduct processing? Are there supply and demand issues?

DT: Until very recently, no one in the end-use arena knew anything about them. Those in the manufacturing sector deal with many of them on a daily basis. At the moment, indium and germanium are in equilibrium. Gallium is always verging on being stressed and tellurium is a big problem at the moment. Historically, tellurium has occurred in quantities of about 1oz. of tellurium:1oz. of gold. Gold is pretty rare, and in fact there is no primary tellurium production and most is recovered from base metal processing.

TCMR: What is tellurium used for?

DT: Tellurium is used in solar panels and solar cells because of higher efficiencies over other technologies.

TCMR: What are some of the other interesting metals for investors?

DT: I think hafnium is one to watch. Hafnium was largely considered a contaminant until recently. For decades hafnium was recovered and used exclusively by the U.S. Navy in nuclear submarines and aircraft carriers for reactor shielding. It has now found its way into computer chips and superconductors. Hafnium occurs naturally at about 1or 2 ppm hafnium:98 ppm in zirconium minerals. Hundreds of thousands of tons of zirconium are processed in the world each year, but the amount of hafnium produced would be in the 10s of tons/year.

TCMR: How can investors track minor metals prices when none of them are traded on the London Metal Exchange? How do investors get a sense of the supply and demand dynamics?

DT: That is difficult. Even using the most liberal rare metal definitions, for many, their annual consumption may be about 100 tons or less, per year. So, these commodities are traded as you or I might buy or sell a house or car. We agree on a price and that price may or may not be posted. So, it's very difficult to find out what deals are taking place and hence, the value of the transaction. You could start with things like the U.S. Geological Survey Commodity Reports. The historical prices going back a few years are fairly accurate. For current data, there are publications like Metal Pages or Asia Metals where price changes are noted daily.

TCMR: What is your advice for investing in tantalum or niobium juniors? Are these metals impacted by demand from electronic devices?

DT: Tantalum, for example, has the highest dielectric constant of all of the elements. That allows its use in electronic capacitor miniaturization. It's a valuable metal, about 40 percent of which is consumed in electronics. We've been watching the price rise from $30/lb. to several hundred dollars over the past year as sources of supply from African countries are being cut by legislation against conflict sources. Interesting things are happening in the tantalum business as a result. On the other hand, niobium, which also has a high dielectric constant, is much more susceptible to temperature ranges so it isn't suitable for many military or automotive uses. It is also much more readily available.

TCMR: What tantalum and niobium companies are interesting?

DT: More than 80% of the world's niobium has come from the Araxá Deposit in Brazil. More recently about 70% of the world's tantalum was coming from the Greenbushes and Wodgina deposits in Australia. That is changing.

The tantalum business is in turmoil as new supplies are being identified in Africa, although some of that may become contraband material or what's called blood tantalum. Small mining companies are popping up in Mozambique, Tanzania, Australia and Brazil. It's an interesting field and a myriad of small players offer exposure to a tantalum pure play. At the same time, large, low grade tantalum mines have been having, or are having problems coming on line.

Perhaps the best source of information on tantalum and niobium, and a good place for a new investor to look, is the Tantalum Information Center.

TCMR: Is there a chain of custody so electronics manufacturers can mark some of these minor metals to ensure that they are produced in a humane matter?

DT: It is an important issue. Tantalum is often a byproduct of tin smelting. We have been seeing tantalum—or tin concentrates—coming out of Africa being smelted in Thailand or Malaysia and losing its fingerprint. The source is erased, if you will. From there it could enter the tantalum markets, be put into capacitors and sold to computer manufacturers.

TCMR: Are HP, Dell and Microsoft concerned about the human rights implications on behalf of customers?

DT: Yes. Computer manufacturers and other electronic suppliers are actively supporting NGOs such as the Electronic Industry Citizenship Coalition (EICC) and the Global e-Sustainability Initiative (GeSI) to ensure that electronic metals are not coming from conflict sources.

Another problem is that because of the small annual tonnages, prices can be manipulated. As far back as 1980, tantalum prices were run up artificially from $12 to $110 before collapsing. Rumors of a shortage for Nokia phones and Sony PlayStations in 2000 drove the price of tantalum ballistic. We're now seeing perhaps as much as 40% of the supply of tantalum being squelched by the identification or tagging of contraband tantalum concentrates—and the price of tantalum is starting to reflect that.

TCMR: Of all these minor metals—indium, germanium, tantalum and gallium—which ones do you think have the most investor opportunity?

DT: All of them. We are competing with China for all of these metals. They would rather sell you a finished flat screen television than the metals to make your own. They are going to be major consumers of all of these metals.

TCMR: Are they using these materials in manufacturing products for their own use or for export or both?

DT: Both for internal consumption and for export purposes. I think all of these metals have a terrific demand upside coming. We're just getting started, if you will, in the electronic age. Miniaturization or substitution are perhaps threats to an investor. Certainly, substitution could blindside investors in a lot of these metals. Nanotechnology may also cut volumes required.

TCMR: Well, one thing that we are sure of is that the consumer demand for the latest, greatest gadget is insatiable.

DT: Which brings up recycling. Consumers want the latest handheld device and throw away the old ones. Recycling is certainly green and laudable, but it's not without its hazards. Companies entering into, or entertaining recycling should be aware that some of these electronic devices may contain beryllium alloys or, for example cobalt samarium alloys. We are all familiar with silicosis, or asbestosis, but few are aware of berylliosis or cobalt-related diseases that could arise through lack of precautions.

TCMR: Aren't the Chinese and Indians doing a lot of recycling, possibly using child labor? Even though we aren't recycling inhumanely, aren't we shipping most of our recycled electronic products to third-world countries for processing?

DT: Yes we are. When I visited China for the first time in 1983, it was the largest ship-breaking nation in the world. They were doing it solely to recover the copper in wiring. I think that role has now gone to India and they are exposed, for example, to asbestos from insulation. There are reports of recycling of those castoff e-devices, but I don't think, outside of scrap from the original manufacturing stages, that any of it is re-entering the markets. Most of the research I encounter for recycling of the more exotic metals is conducted in Japan. Elsewhere, I have seen large tonnages of stockpiled neodymium iron boron and cobalt samarium alloys that would cost more to ship to a recycling facility and process, than the value of the contained metals that would be recovered.

TCMR: So, do you see a potential business opportunity for a company in North America to get seriously into the electronic recycling business?

DT: Yes. I think there is a terrific opportunity there. It is a business that will grow.

TCMR: You've given us a lot to think about. Thank you very much for your time and your thoughts.

Dr. David Trueman started his geological career as a smelter mechanic in Thompson, Manitoba in 1962, the year Inco blew in its new converters. In the intervening 49 years, Dave has spent time in academia, government and industry—the last 37 years specializing in the "rare metals" field.

Dr. Trueman's interest in rare metals stemmed from examination of geological structural controls of granitic pegmatites and in 1977 he joined Tantalum Mining Corp. of Canada (TANCO) which at that time was producing about 70% of the world's newly won tantalum. He entered the junior mining sector in 1983 and the rare metals have since taken him through the Arctic in Canada, Greenland, the US and Russia, to Australia, Namibia, South Africa, India, the People's Republic of China, Brazil, Saudi Arabia, Spain, France, Wales, Denmark, Germany and throughout North America. His work has focused on beryllium, tantalum, niobium, lithium, rubidium, cesium, the lanthanide and rare earth elements, indium, gallium, germanium, tellurium, zirconium, hafnium, chromium, vanadium and titanium.

Want to read more exclusive Critical Metals Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators and learn more about critical metals companies, visit our Critical Metals Report page.
1) Brian Sylvester of The Gold Report conducted this interview. He personally and/or his family own the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of The Gold Report: Timmins.
3) Ian Gordon: I personally and/or my family own shares of the following companies mentioned in this interview:Timmins Gold, Golden Goliath, Millrock and Lincoln. My company, Long Wave Analytics is receiving payment from the following companies mentioned in this interview, for receiving mention on my website, Golden Goliath, Millrock and Lincoln Gold.

The GOLD Report is Copyright © 2011 by Streetwise Inc. All rights are reserved. Streetwise Inc. hereby grants an unrestricted license to use or disseminate this copyrighted material only in whole (and always including this disclaimer), but never in part. The GOLD Report does not render investment advice and does not endorse or recommend the business, products, services or securities of any company mentioned in this report. From time to time, Streetwise Inc. directors, officers, employees or members of their families, as well as persons interviewed for articles on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in