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INDUSTRY BULLETIN: The world watches Paris and Provincial Governments unveil clean technology plans – but where will the critical raw materials come from?

Posted by AGORACOM-JC at 2:55 PM on Thursday, December 3rd, 2015

  • Recent policy initiatives in Canada will likely result in increased funding for clean technology innovation, which will lead to increased demand for critical materials needed in clean technology such as lithium.
  • The world is closely watching the United Nations Conference on Climate Change ongoing until December 11, 2015 in Paris. The expected outcome of this conference is a new international agreement to control carbon emissions.

December 3, 2015

Avalon Rare Metals Inc. is pleased to provide an update on a few recent national and international initiatives related to the ongoing “Clean Technology Revolution.” Recent policy initiatives in Canada will likely result in increased funding for clean technology innovation, which will lead to increased demand for critical materials needed in clean technology such as lithium. Developing supply chains will need companies such as Avalon to provide the necessary critical raw materials to achieve governments’ ambitious policy goals.

The world is closely watching the United Nations Conference on Climate Change ongoing until December 11, 2015 in Paris. The expected outcome of this conference is a new international agreement to control carbon emissions. It is anticipated that there will be agreement around the urgent need for more efficient and cleaner energy generation and reduced reliance on the burning of fossil fuels. Prior to the conference, two Canadian provinces, Alberta and Ontario, unveiled their strategies to combat greenhouse gas emission and to develop a low-carbon economy.

In Alberta, Premier Rachel Notley outlined the province’s Climate Leadership Plan and in Ontario, Premier Kathleen Wynne presented a somewhat similar Climate Change Strategy. While there are some differences, one can note that both of these strategies focus on expanding renewable energy initiatives such as wind power and solar power, as well as increased use of hybrid and electric vehicles and other energy efficient technologies. All of these technologies rely on energy storage, which is being enabled by advances in lithium ion battery technology.

Battery expert Jay Whitacre, an investor at Carnegie Mellon, states, “If you are serious about eliminating combustion of fossil fuels to power anything, you can’t do it without [energy] storage.” There remains an impending supply crisis surrounding the availability of critical elements such as lithium, as outlined by David Abraham, author of “The Elements of Power,” who calls on world leaders to address the pending shortage of critical elements needed for clean technologies in his recent Op-Ed in the New York Times: “The Next Resource Shortage?.” Limited investment in new production in recent years and long timelines to bring new production to market signal looming supply shortages and higher prices as demand outstrips supply.

This is good news for aspiring producers like Avalon positioned with advanced lithium projects in favourable political jurisdictions such as Ontario.

Rapid development of electric car technology, enabled by lower cost and more efficient lithium ion batteries, is being led in North America by Tesla Motors, Inc. Tesla is building a lithium ion battery “Gigafactory” in Nevada to produce rechargeable batteries for its future electric cars and the “Powerwall” battery for home energy storage. It has also committed to sourcing the critical materials for the Gigafactory in North America. New supply sources will need to be developed to serve their needs as well as other battery makers around the world. Avalon’s Separation Rapids Lithium Project could become part of the solution.

Policymakers around the world keen on implementing the Clean Technology Revolution would be wise to consider: Where will all the critical raw materials come from?

For questions or feedback, please email Avalon at ir@avalonraremetals.com.

About Avalon Rare Metals Inc.
Avalon Rare Metals Inc. (TSX & NYSE MKT: AVL) is a Canadian mineral development company specializing in niche market metals and minerals with growing demand in new technology. The Company has three advanced stage projects, all 100%-owned, providing investors with exposure to lithium, tin and indium, as well as rare earth elements, tantalum, niobium, and zirconium. Avalon is currently focusing on its Separation Rapids Lithium Project, Kenora, ON and its East Kemptville Tin-Indium Project, Yarmouth, NS. Social responsibility and environmental stewardship are corporate cornerstones.

130 Adelaide St. W, Suite 1901
Toronto, ON M5H 3P5
Tel: (416) 364-4938
Email: ir@avalonraremetals.com

Recent Developments in the Lithium Market

Posted by AGORACOM-JC at 11:06 AM on Friday, November 20th, 2015

  • Sales of electric vehicles (“EVs”) have increased significantly in 2015 due to a strong market in Europe and China
  • According to global market research firm TrendForce, the worldwide sales of EVs for the first three quarters of 2015 have increased 31% year on year to 330,000 units, with China accounting for the largest share, partly due to government support

Following up on Avalon Rare Metals’ July 13, 2015 Industry Bulletin “Growing lithium demand creates new opportunities for Avalon’s Separation Rapids Project,” we are pleased to provide an update on the lithium market, where demand for lithium chemicals is growing and prices are rising.

Sales of electric vehicles (“EVs”) have increased significantly in 2015 due to a strong market in Europe and China. According to global market research firm TrendForce, the worldwide sales of EVs for the first three quarters of 2015 have increased 31% year on year to 330,000 units, with China accounting for the largest share, partly due to government support. This has had a positive effect on demand for lithium-ion batteries and in turn for lithium chemicals.

On September 15, 2015, FMC Corporation announced that effective October 1, 2015 it would increase prices for the lithium products it sells including lithium carbonate, lithium chloride and lithium hydroxide in all global regions by 15% as “market growth is outpacing current industry supply capabilities,” according to Chris Senyk, global marketing director at FMC Corporation.

Also, the Xinhua Finance Agency recently reported on some transactions earlier this year inside China for battery grade lithium carbonate priced in the range of 58,000 – 60,000 yuan per metric ton (US$9,100–9,400 per tonne)*, an increase of between 9% and 11% from earlier this year. Note that lithium chemicals are not traded on a commodities exchange and prices reported represent periodic spot transactions.

The trend of increasing demand for EVs is consistent with Stormcrow Capital’s forecast of May 2015 in which they anticipate demand for lithium for batteries to triple in the next ten years and the overall demand for lithium to double during the same period. Stormcrow also expects that this demand will outpace supply growth over the next five years.

Yesterday, Nemaska Lithium Inc. (“Nemaska”) announced the signing of a Memorandum of Understanding (“MOU”) with Johnson Matthey Battery Materials Ltd (“JMBM”) of Candiac, Quebec. The MOU contemplates an up-front payment by JMBM of $12 million in return for future services and products of the same value. The MOU also includes provisions for a long term supply agreement between Nemaska and JMBM for lithium hydroxide and carbonate. This demonstrates that some consumers of lithium are taking action now to secure long term future supplies from emerging producers.

In September 2014, Tesla Motors announced plans to build a “Gigafactory” in Nevada to produce Li-ion batteries for its future electric cars. In April 2015, Tesla CEO Elon Musk unveiled the Li-ion “Powerwall” battery for home energy storage. One of the ways improvements in energy density are being achieved is through utilization of ever higher purities of input raw materials including lithium chemicals. Simon Moores, Managing Director of Benchmark Minerals Intelligence, recently stated that “Tesla will single-handedly increase lithium hydroxide demand by 50% on 2013 levels at a time when demand is also increasing from other battery producers that are expanding lithium-ion cell output on a significant scale. Should the company be looking to purchase even 10,000 tonnes today, the industry would not be able to meet this demand.”

Benchmark Minerals Intelligence provides independent data and analysis on the lithium ion battery supply chain. Mr. Moores will be joining Avalon’s CEO Don Bubar at the Company’s presentation on the Separation Rapids Lithium Project to investors in London on November 26, 2015 and will talk specifically about the market for the critical materials used in the lithium ion battery. Please contact Andrew Keen at ak@cityir.com for more information about this evening event.

For questions or feedback, please email Avalon at ir@avalonraremetals.com.

About Avalon Rare Metals Inc.
Avalon Rare Metals Inc. (TSX & NYSE MKT: AVL) is a Canadian mineral development company specializing in niche market metals and minerals which are in growing demand in new technology. The Company has three advanced stage projects, all 100%-owned, providing investors with exposure to lithium, tin and indium, as well as rare earth elements, tantalum, niobium and zirconium. Avalon is currently focusing on its Separation Rapids Lithium Project, Kenora, ON and its East Kemptville Tin-Indium Project, Yarmouth, NS. Social responsibility and environmental stewardship are corporate cornerstones.

130 Adelaide St. W, Suite 1901
Toronto, ON M5H 3P5
Tel: (416) 364-4938
Email: ir@avalonraremetals.com

INTERVIEW: Avalon Rare Metals Discusses Work Program at East Kemptville

Posted by AGORACOM-JC at 11:47 AM on Thursday, November 5th, 2015

  • Recent news release published updating investors on the $1.3 million work program
  • East Kemptville Tin-Indium Project in Yarmouth County, Nova Scotia
  • Current program includes diamond drilling on the three known mineralized zones, metallurgical process testwork and preliminary environmental assessment studies.
  • Preliminary Economic Assessment scheduled for completion before November 30, 2015.

Hub On AGORACOM / Corporate Profile / Watch Interview Now!

Avalon Provides Update on 2015 Work Program on the East Kemptville Tin-Indium Project, Nova Scotia, Canada

Posted by AGORACOM-JC at 10:02 AM on Tuesday, November 3rd, 2015

  • Provides the following update on the $1.3 million 2015 work program on the East Kemptville Tin-Indium project, Yarmouth Co., Nova Scotia
  • Program includes diamond drilling on the three known mineralized zones, metallurgical process testwork and preliminary environmental assessment studies
  • Environmental and metallurgical work will be incorporated (along with the October, 2014 resource estimate) in a Preliminary Economic Assessment (“PEA”) scheduled for completion before November 30, 2015
Avalon Provides Update on 2015 Work Program on the East Kemptville Tin-Indium Project, Nova Scotia, Canada
 

Toronto, Ontario–(November 3, 2015) – Toronto, Ontario — Avalon Rare Metals Inc. (TSX: AVL) (NYSE MKT: AVL) (“Avalon” or the “Company”) is pleased to provide the following update on the $1.3 million 2015 work program on the East Kemptville Tin-Indium project, Yarmouth Co., Nova Scotia. This program includes diamond drilling on the three known mineralized zones, metallurgical process testwork and preliminary environmental assessment studies. The environmental and metallurgical work will be incorporated (along with the October, 2014 resource estimate) in a Preliminary Economic Assessment (“PEA”) scheduled for completion before November 30, 2015.

The current drilling program is designed to collect additional metallurgical sample material from the previously-mined Main and Baby Zones and test other known mineralized zones including the Duck Pond deposit to delineate additional economic resources for a feasibility study. An updated resource estimate will be prepared in early 2016 once all the results from the 2015 drilling have been received and compiled.

The site access agreement with the surface rights holder has been further extended until November 30, 2015 to provide sufficient time to complete the 2015 work program. In the meantime, discussions continue towards reaching an agreement to transition full title to the property to Avalon. The parties expect to be able to conclude an agreement by year-end 2015.

2015 Drill Program

The 2015 drill program commenced on July 13th and to date seventeen drill holes have been completed for a total of 3,301 metres. This includes 8 holes on the Baby Zone, 4 holes on the Main Zone and 5 holes on the Duck Pond Zone. Costs are coming in under budget which will allow for at least 4 more drill holes in the program, focused on the northeast extension of the Main Zone, before the program is concluded later this month. Proposed drilling on the South Grid Zone has been deferred until 2016.

The assays for the eight holes drilled on the Baby Zone have been received and compiled. Results are in line with expectations and confirm continuity of the mineralized zone to depth. Highlights include intersections of 0.46% tin (Sn), 25.2 ppm indium (In) and 0.63% zinc (Zn) over 82.3 metres (EKAV-15-10), 0.23% Sn, 15.6 ppm In and 0.33% Zn over 36.25 metres (EKAV-15-09) and 0.25% Sn, 29.4 ppm In and 0.64% Zn over 18.67 metres (EKAV-15-11).1

A summary of significant intercepts is presented in Table 1 and the detailed drill hole locations are provided in Table 2. The drilling on the Baby Zone has successfully recovered about one tonne of sample for metallurgical testwork purposes and increased the confidence level of the Baby Zone resources.

In addition, certain sections of 2014 drill core that were not sampled last year due to apparent low levels of visible mineralization were sampled and submitted for assay this summer. These produced some surprising results indicating significant widths of mineralization adjacent to existing known mineralized intervals (Table 3). The intercepts given in Table 3 are examples located outside the boundaries of the existing October, 2014 resource estimate that, in effect, have potential to increase the total near surface resource estimate in the Baby Zone.

Metallurgical Testwork Program

The comprehensive bench scale metallurgical test work currently being undertaken in the UK is nearing completion. This extensive test program is evaluating the metallurgical flowsheet from grinding, through copper and zinc sulphide flotation, to tin recovery by both gravity and flotation methods. The recovery of indium to the zinc concentrate is also being measured as microprobe data of the zinc ore mineral sphalerite shows very high levels of contained indium (up to 0.25%) . Some metallurgical test results are still outstanding but preliminary analysis of the data suggests that the recoveries and grades for all three concentrates are in line with expectations.

PEA Report Preparation

Avalon has retained the services of Micon International Limited Toronto, Ontario to prepare a NI 43-101 compliant PEA for the East Kemptville project. The PEA will be based upon the existing NI 43-101 resource estimate (disclosed in the Company’s news release dated October 31, 2014), together with the final results from the metallurgical testwork program and environmental input provided by Stantec Consulting Limited Halifax, Nova Scotia (“Stantec”). Work on the PEA is progressing well and is on schedule for completion by the end of November 2015.

Environmental Assessment Work

Stantec’s Halifax office has considerable experience with the East Kemptville site and is conducting the key studies required as part of the Environmental and Social Impact Assessment for the permitting process and a planned feasibility study. Through the innovative use of low permeability tailings disposal technology, processing of the low grade ore stockpiles and engineered oxygen barriers (water covers), a cost effective tailing and waste rock management strategy has been developed. This strategy has the potential to greatly reduce the risk from existing acid-generating waste rock and tailings at the site and could result in a site closure plan that will eliminate the need for expensive perpetual water treatment.

Update on Tin Markets

Avalon recently joined the UK-based International Tin Research Institute (“ITRI”), which is dedicated to supporting the global tin industry and expanding tin use while providing its members with frequent updates on new developments in global tin markets. For further information, please visit the ITRI website at https://www.itri.co.uk/. Recent ITRI market commentary highlights the need for new tin mines to be developed to replace steadily declining production capacity from existing mines in Peru, Indonesia and China. This is creating opportunities for emerging new tin producers.

Unlike the major base metals, little new tin production capacity has come on-stream over the past 10 years during the commodities super-cycle. While LME tin prices have come down to the US$15,000/tonne level in 2015 from over $20,000/tonne in 2014, LME tin inventories remain low and many industry analysts believe that tin prices will rise in the absence of significant new supply. Also, some tin supplies originating in Central Africa are now designated as conflict minerals which preclude their use by consumers in the US and EU under legislation restricting the use of minerals produced to finance armed conflict. The overall conclusion is that new supplies from non-conflict sources, such as Nova Scotia, will be needed over the next five years just to meet continuing demand from the electronics sector.

Avalon will be presenting during the upcoming ITRI London Tin Seminar on November 26 at 11:30am GMT at the Brewery, Chiswell Street, London, England. For further information on this event or to register, please contact Lesley.Lewis@itri.co.uk.

The technical information included in this news release has been reviewed and approved by the Company’s Vice President Exploration, Dr. Bill Mercer, P. Geo, who is a Qualified Person under NI 43-101. For questions or feedback, please email the Company at ir@avalonraremetals.com, or phone Don Bubar, President & CEO, at

1 All widths are drilled widths. True Widths are not known.

Cautionary Statement

This news release contains “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements regarding the commencement and completion of its work programs, that environmental and metallurgical work will be incorporated in a PEA scheduled for completion before November 30, 2015, that an updated resource estimate will be prepared in early 2016, that Avalon and the surface rights holder expect to be able to conclude an agreement by year-end 2015, that the Company’s strategy has the potential to greatly reduce the risk from existing acid-generating waste rock and tailings at the site and may result in a site closure plan that will eliminate the need for expensive perpetual water treatment, that many industry analysts believe that tin prices will rise in the absence of significant new supply and that new supplies from non-conflict sources such as Nova Scotia will be needed over the next five years just to meet continuing demand from the electronics sector . Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “potential”, “scheduled”, “anticipates”, “continues”, “expects” or “does not expect”, “is expected”, “scheduled”, “targeted”, “planned”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be” or “will not be” taken, reached or result, “will occur” or “be achieved”. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Avalon to be materially different from those expressed or implied by such forward-looking statements. Forward-looking statements are based on assumptions management believes to be reasonable at the time such statements are made. Although Avalon has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Factors that may cause actual results to differ materially from expected results described in forward-looking statements include, but are not limited to market conditions, the possibility of cost overruns or unanticipated costs and expenses, and unanticipated results from the work programs, as well as those risk factors set out in the Company’s current Annual Information Form, Management’s Discussion and Analysis and other disclosure documents available under the Company’s profile at www.SEDAR.com. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Such forward-looking statements have been provided for the purpose of assisting investors in understanding the Company’s plans and objectives and may not be appropriate for other purposes. Accordingly, readers should not place undue reliance on forward-looking statements. Avalon does not undertake to update any forward-looking statements that are contained herein, except in accordance with applicable securities laws.

Cautionary Note to U.S. Investors Concerning Estimates of Reserves and Resources

Unless otherwise indicated, all reserve and resource estimates and other technical information included in this press release have been prepared in accordance with NI 43-101. NI 43-101 is a rule developed by the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects.

Canadian standards for disclosure of information, including NI 43-101, differ significantly from the requirements of the United States Securities and Exchange Commission (the “SEC”), and reserve and resource information contained in this press release may not be comparable to similar information disclosed by United States companies. In particular, and without limiting the generality of the foregoing, the term “resource” does not equate to the term “reserve”. Under United States standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. The SEC’s disclosure standards normally do not permit the inclusion of information concerning “measured mineral resources”, “indicated mineral resources” or “inferred mineral resources” or other descriptions of the amount of mineral in mineral deposits that do not constitute “reserves” by United States standards in documents filed with the SEC. The requirements of NI 43-101 for identification of “reserves” are also not the same as those of the SEC, and reserves reported by Avalon in compliance with NI 43-101 may not qualify as “reserves” under SEC standards. Accordingly, information concerning mineral deposits set forth herein may not be comparable with information made public by companies that report in accordance with United States standards.

TABLE 1: Mineralized intercepts, 2015 drilling, Baby Zone, East Kemptville

Drill Hole From
(metres)
To
(metres)
Width
(metres)
Tin % Zinc % Copper % Indium
ppm
EKAV-15-08 10.00 23.50 13.50 0.10 0.06 0.05 3.5
EKAV-15-08 77.50 86.50 9.00 0.16 0.09 0.06 5.7
EKAV-15-09 56.50 65.50 9.00 0.11 0.05 0.09 3.1
EKAV-15-09 74.25 110.50 36.25 0.26 0.33 0.14 15.6
EKAV-15-09 137.50 149.50 12.00 0.05 0.33 0.05 14.1
including 137.50 140.50 3.00 0.14 0.57 0.08 28.2
EKAV-15-10 28.00 37.00 9.00 0.13 0.11 0.06 6.0
EKAV-15-10 46.00 61.00 15.00 0.10 0.08 0.03 2.7
EKAV-15-10 76.00 158.30 82.30 0.46 0.63 0.07 25.2
including 76.00 140.30 64.30 0.54 0.71 0.08 28.9
EKAV-15-11 38.00 57.50 19.50 0.20 0.20 0.06 6.8
EKAV-15-11 68.40 71.25 2.85 0.56 0.69 0.05 24.8
EKAV-15-11 85.33 122.00 36.67 0.16 0.69 0.06 26.5
including 85.33 104.00 18.67 0.25 0.64 0.08 29.4
EKAV-15-12 48.50 71.00 22.50 0.11 0.16 0.03 3.8
EKAV-15-12 84.50 114.80 30.30 0.04 0.21 0.03 7.8
EKAV-15-12 103.50 159.70 56.20 0.06 0.30 0.03 13.1
including 125.50 133.10 7.60 0.13 0.42 0.03 20.3
EKAV-15-13 27.50 50.00 22.50 0.11 0.23 0.06 5.9
EKAV-15-13 86.00 156.50 70.50 0.09 0.38 0.03 13.5
including 86.00 99.50 13.50 0.14 0.57 0.05 16.3
EKAV-15-14 No significant values
EKAV-15-15 71.30 86.00 14.70 0.17 0.51 0.03 18.3
EKAV-15-15* 174.00 194.50 20.50 0.09 0.19 0.06 16.1
EKAV-15-15* 238.60 248.00 9.40 0.48 0.35 0.04 19.5

*Indicates preliminary results subject to further QA/QC verification

Footnotes:
1. Drilling utilized an HQ drill rig.
2. Widths are drilled widths and not considered true widths. True widths are not known.
3. All drill core from the program was normally sawn in half top provide 1.5 metre samples at the core logging facility in Yarmouth, Nova Scotia and submitted to Activation Laboratories Ltd. (Actlabs), Ancaster, Ontario for sample preparation and primary analysis.
4. Core considered unmineralized or low grade was sampled at 1.5 metre intervals, but composited to 4.5 metres for analytical purposes.
5. In-house Avalon standards and blanks were utilized for QA/QC purposes, along with core duplicates.
6. Results are monitored for key elements, and in cases of QA/QC issues, re-analysis is requested.
7. Zn, Cu and In were analyzed by sodium peroxide fusion followed by ICP-MS (method Ultratrace 7) whilst Sn, W and Cu were analysed by fusion followed by XRF (method Whole Rock 4C plus Sn and W). Any overlimits Zn is rerun by peroxide fusion –ICP (method 8-peroxide).
8. A cutoff grade of 0.08% Sn was used guidance for estimating intercepts.

TABLE 2: Drill Hole locations

Collar Location
Zone DDH Easting (NAD83) Northing (NAD83) Dip Azimuth Hole depth (metres)
Baby Zone EKAV-15-08 284851 4886317 -70 300 174
Baby Zone EKAV-15-09 284851 4886317 -60 300 165
Baby Zone EKAV-15-10 284803 4886255 -70 300 192
Baby Zone EKAV-15-11 284803 4886255 -55 300 122
Baby Zone EKAV-15-12 284769 4886221 -60 300 185
Baby Zone EKAV-15-13 284769 4886221 -45 300 161
Baby Zone EKAV-15-14 284704 4886190 -45 300 155
Baby Zone EKAV-15-15 284665 4886366 -45 120 251
Main Zone EKAV-15-16 284987 4886583 -50 122 161
Main Zone EKAV-15-17 284987 4886583 -40 122 144
Main Zone EKAV-15-18 285328 4887080 -40 122 182
Main Zone EKAV-15-19 282295 4887054 -45 143 257
Duck Pond Zone DPAV-15-20 282734 4887146 -90 0 260
Duck Pond Zone DPAV-15-21 282640 4887194 -45 120 275
Duck Pond Zone DPAV-15-22 282849 4887054 -45 300 224
Duck Pond Zone DPAV-15-23 282811 4887152 -45 120 167
Duck Pond Zone DPAV-15-24 282811 4887152 -70 120 227

TABLE 3: New significant mineralized intercepts from 2014 drill core sampled and assayed in 2015

From (m) To (m) Width (m) Sn % Zn % Cu %
EKAV-14-03 16.50 75.00 58.50 0.17 0.15 0.05
EKAV-14-03 previously
released (for comparison)
49.00 65.75 16.75 0.39 0.29 0.08
EKAV-14-05 15.50 35.50 20.00 0.07 0.71 0.06

Tin’s problem is too little not too much supply: Andy Home

Posted by AGORACOM-JC at 4:32 PM on Monday, November 2nd, 2015

  • Often the contrarian of the metals traded on the London Metal Exchange (LME), tin is once again defying the broader bear narrative.
  • If there’s a problem with supply in the tin market, it is that there’s not enough of it right now.
  • Visible stocks are low by just about any historic yardstick. Those registered with the LME total just 5,010 tonnes, of which 540 tonnes are earmarked for physical load-out.

By Andy Home

Oct 28 (Reuters) – Industrial metals are caught in a bear vortex of slowing demand growth, first and foremost in China, and oversupply, as producers pay the price for the exuberance of the boom years.

If prices are to recover from their current bombed-out levels, everyone agrees more production will have to be taken off line, whether through voluntary restraint or forcible cash-burn attrition.

Glencore’s well-flagged cuts to its copper, zinc and lead production portfolio have at least halted the price declines in those markets, although they have not reversed long-running downtrends.

Significant cuts in either aluminium or nickel supply remain conspicuous by their absence, which is one reason both metals are particularly out of favour even in the context of the general doom and gloom pervading the complex.

And then there is tin.

Often the contrarian of the metals traded on the London Metal Exchange (LME), tin is once again defying the broader bear narrative.

If there’s a problem with supply in the tin market, it is that there’s not enough of it right now.

Visible stocks are low by just about any historic yardstick. Those registered with the LME total just 5,010 tonnes, of which 540 tonnes are earmarked for physical load-out.

Moreover, exchange stocks have remained low despite a persistent premium for cash metal, which might reasonably have been expected to incentivise the delivery of more metal into LME sheds.

The LME’s benchmark cash-to-three-months spread CMSN0-3 traded out to $510 backwardation at one stage in August, the tightest the period’s been since 2009. It’s still tight, valued at $67 backwardation as of Tuesday’s close.

So how come tin is not overstocked and oversupplied like just about every other industrial metal? And is it a temporary problem or something more structural?

******************************************************

Graphic on Indonesian tin exports:

tmsnrt.rs/1GIV8rF

Graphic on LME tin stocks and spreads:

tmsnrt.rs/1GIVMoZ

******************************************************

A TALE OF TWO EXPORTERS

As ever with this small market, supply and availability is largely a function of two key countries, one highly visible, one bathed in statistical shadow.

Indonesia, the world’s largest exporter of the soldering metal, is going through one of its periodic shipment spasms.

And although some of the country’s smaller producers will undoubtedly be struggling to remain in operation at current price levels, this, as ever with Indonesia, is more about government policy.

The authorities have been waging a long-running campaign to try and control the free-wheeling tin miners and smelters clustered on the islands of Bangka and Belitung.

Export rules have been steadily tightened to prevent smuggling and now the authorities are targeting illegal mines with a requirement that exporters hold “clean and clear” certification, proving the metal has come from government-registered operations.

Delays in processing such applications meant no tin exports at all in August and although shipments resumed in September, there is considerable doubt as to whether many smaller operators can meet the new government requirements.

Cumulative exports fell by 10 percent to 52,079 tonnes in the first nine months of this year, which is shaping up to be the third consecutive year of falling shipments.

China is the world’s largest producer and user of tin. It is a net importer of refined metal.

Well, it is, if you believe the official customs figures, which show imports running at 7,400 tonnes and exports at just 65 tonnes in the first nine months of 2015.

The problem is that official appearances can be misleading. Tin industry body ITRI, for example, calculates that receipts of refined tin from China by importing countries amounted to over 2,200 tonnes “based on incomplete data up to August”.

Such shadow exports from China have been sleuthed down by ITRI in the past and have often confounded analysts’ price-positive supply-demand expectations.

Right now, though, they have stopped, ITRI citing a customs department investigation into local operators suspected of bypassing China’s 10 percent export tax.

“Some of the owners have been arrested,” according to ITRI, and “local sources reported that no-one would like to take the risk to export tin” in whatever form.

This clampdown on unofficial Chinese exports has coincided with the more visible interruption to shipments from Indonesia, draining the international market of units.

PEAK TIN?

Such are the short-term constraints on tin availability.

But there is an underlying story of structural supply challenges. Simply put, the supercycle largely passed tiny tin by in terms of investment in new mines.

Production from older mines in countries such as Peru and Brazil, meanwhile, is steadily falling, as it has been for some time.

Indeed, the only reason tin has avoided a more serious supply crunch is the emergence of a totally new producing country in the form of Myanmar.

It burst onto the radar in 2013 as a major supplier of raw materials to Chinese smelters. China’s imports from Myanmar grew from virtually zero in 2012 to 89,000 tonnes (bulk weight, not metal contained) in 2013 and further to 173,000 tonnes in 2014.

This year’s imports are up again at 178,000 tonnes in the first nine months alone.

But, according to ITRI, local operators are having to work ever harder to maintain such output levels. Actual production may have been declining this year but “the considerable expansion of processing capacity” has allowed the “treatment of previously stockpiled or discarded low-grade ore.”

ITRI forecasts Myanmar to produce around 38,000 tonnes of contained tin this year and “a further small increase may be possible next year”.

Note the conditionality in that forecast.

The sustainability of production in Myanmar is a known unknown in the tin market. It may be close to a peak. It may, indeed, have already peaked.

If it has, tin’s structural supply problems will come back to bite the market, even allowing for the same Chinese demand headwinds that are hitting every industrial commodity.

In a metallic landscape where supply is the differentiator, tin’s prospects don’t look nearly as dire as markets such as nickel, where producers have seriously mistimed the new wave of production capacity.

Within the current broader narrative of too much supply and too much inventory, tin has neither, hence that persistent backwardation on the LME.

Indeed, the supply strain may get worse.

After all, if new mines weren’t incentivised at prices above $20,000 per tonne, they are certainly not going to be so at current prices trading around $15,000 per tonne.

Source: http://uk.reuters.com/article/2015/10/28/tin-market-ahome-idUKL8N12S3VZ20151028

INTERVIEW: Avalon VP Discusses Lithium Markets and Separation Rapids Project

Posted by AGORACOM-JC at 11:00 AM on Thursday, October 22nd, 2015

Avalon VP Discusses Lithium Markets and Separation Rapids Project

Why Lithium?

  • Lithium has been used in ceramics and glass for many decades.
  • The largest use for lithium is in rechargeable batteries and this use for lithium was invented in the 70’s.
  • The use of lithium in batteries has tripled since 2008 (20,026 t LCE in 2008 to 64,398t LCE in 2014) and the forecasted growth rate of lithium demand growth is 8% per year to 2025 and the predicted growth rate for li in battery use is 13% (CAGR).

About Our Guest

  • Pierre brings leadership and international marketing, sales and trading experience in London Metal Exchange (LME) traded metals, industrial chemicals and industrial minerals to Avalon.
  • Has over 25 years of experience in LME and non-LME traded commodities.
  • At Avalon, responsible for understanding the markets and creating strategic partnerships with potential customers and investors.

Hub On AGORACOM / Corporate Profile / Watch Interview

 

5 Basic Lithium Facts

Posted by AGORACOM-JC at 9:48 AM on Wednesday, October 21st, 2015

With gold and silver prices still under pressure, more and more investors are starting to look at the critical metals space, and at lithium in particular.

Lithium-ion batteries power everything from cellphones to laptops to electric vehicles, and demand for the metal is certainly on the rise. Many companies and investors have been drawn in by news of Elon Musk and Tesla Motors’ (NASDAQ:TSLA) lithium-ion battery gigafactory.

However, Tesla’s isn’t the only lithium-ion battery megafactory out there, and there’s more to lithium and the lithium market than electric vehicle batteries.

Here’s a look at five basic lithium facts investors should know.

1. It’s the lightest metal on the periodic table

Lithium is the lightest, or least dense, elemental metal. It is about half as dense as water.

The metal also has a high specific heat, making it useful in the production of heat-resistant glass, while its electrochemical potential makes it useful in batteries.

2. It can be found in brines, hard-rock deposits and clays

Lithium is found all over the world, in both hard-rock deposits and evaporated brines.

The world’s largest hard-rock mine is the Greenbushes mine in Australia. Most of the world’s lithium brine production comes from salars in Chile and Argentina. Bolivia is thought to hold the world’s largest lithium reserves, and the prolific lithium triangle spans all three South American countries.

Several companies are also looking to develop clay-based lithium deposits. For example, Western Lithium (TSX:WLC) holds the King’s Valley lithium deposit in Nevada, while Bacanora Minerals (TSXV:BCN,LSE:BCN) and joint venture partner Rare Earth Minerals (LSE:REM) are advancing the Sonora lithium project in Mexico.

3. It’s not just for batteries

While batteries have been getting most of the attention in the lithium space lately — and while demand for lithium from the battery sector is certainly on the rise — it’s worth noting that other sectors continue to account for a healthy proportion of lithium demand.

Citing data from Roskill, a report from Stormcrow Capital notes that in 2013, rechargeable batteries made up 29 percent of lithium demand, while the remainder of the market was mostly made up by various industrial end uses. That includes ceramics (14 percent), glass-ceramics (12 percent), greases (8 percent) and metallurgical powders (6 percent).

Lithium is also used in pharmaceuticals, lubricants and heat-resistant glass.

4. Lithium hydroxide vs. lithium carbonate?

After lithium is extracted from a deposit, it is often processed into lithium carbonate, lithium hydroxide or lithium metal. Battery-grade lithium carbonate and lithium hydroxide can be used to make cathode material for lithium-ion batteries. Most contaminants must be removed in order for either material to be considered battery grade.

Hydroxide tends to be more expensive, but can produce cathode material more efficiently and is actually necessary for some types of cathodes, such as nickel-cobalt-aluminum oxide (NCA) and nickel-manganese-cobalt oxide (NMC).

In addition to battery-grade materials, there is also a market for technical-grade lithium. Technical-grade lithium products, such as technical-grade lithium concentrate, sell for a cheaper price than battery-grade products, and are used in applications such as glass and ceramics. Technical-grade lithium products must have very low concentrations of iron.

Nevada Sunrise Gold (TSXV:NEV), a company that has earned a spot on the 2015 TSX Venture 50, and has quality gold properties in the prolific jurisdiction of Nevada where mining infrastructure and services are well developed. Nevada Sunrise Gold recently acquired the Neptune Lithium Property in Nevada, which has the potential to host lithium-bearing brines in subterranean aquifers beneath the Clayton Valley floor. Learn more about this company today!

5. Prices can be hard to find

Like most critical metals, lithium is not traded on any public exchange, and major lithium producers don’t often give out stats. For a long time, most of the world’s lithium was produced by an oligopoly of producers often referred to as the “Big 3,” which included Rockwood Lithium (now owned by Albemarle (NYSE:ALB)), Sociedad Quimica y Minera de Chile (NYSE:SQM) and FMC (NYSE:FMC).

Producers in China have grabbed a larger share of the lithium market in recent years, but the lack of information on pricing has continued.

However, interested investors can look to experts in the lithium space for market reports and price forecasts. For example, the report from Stormcrow Capital mentioned above includes a detailed forecast for lithium prices.

Source: http://investingnews.com/daily/resource-investing/energy-investing/lithium-investing/five-basic-facts-about-lithium/?mqsc=E3814106&utm_source=WhatCountsEmail&utm_medium=INN_FullList+INN%20Daily+INN%20Daily&utm_campaign=INN%20Daily%20Automated

Avalon Provides Update on Separation Rapids Lithium Project Kenora, Ontario

Posted by AGORACOM-JC at 8:16 AM on Thursday, October 8th, 2015

  • Provides an update on its $750,000 pilot plant program on the Company’s Separation Rapids Lithium Project
  • 30 tonne bulk sample of crushed ore that was shipped this summer has arrived at its destination in Germany and process work is now underway
  • Pilot plant program will be completed, and concentrate available for distribution, in Q1 2016.

Toronto, Ontario–(October 8, 2015) – Avalon Rare Metals Inc. (TSX: AVL) (NYSE MKT: AVL) (“Avalon” or the “Company”) is pleased to provide an update on its $750,000 pilot plant program on the Company’s Separation Rapids Lithium Project (“Separation Rapids Project” or “the Project”) located near Kenora, Ontario, first announced in its news release of August 17, 2015.

The 30 tonne bulk sample of crushed ore that was shipped this summer has arrived at its destination in Germany and process work is now underway. The sample will be processed using the Company’s proven flow sheet to produce a high purity lithium mineral (petalite) concentrate for the following purposes:

1) to deliver further product samples to potential customers in the glass-ceramics industry who have already tested and approved smaller samples;
2) to provide initial test samples to a number of new potential customers; and
3) to generate concentrate for additional process development work with the objective of producing high purity lithium chemical products for the lithium ion battery manufacturing business.

 

The pilot plant program will be completed, and concentrate available for distribution, in Q1 2016.

Lithium chemicals process optimization work continues at the laboratories of the Saskatchewan Research Council (“SRC”) in Saskatoon, Saskatchewan. Laboratory test work performed earlier this year at SRC provided encouraging results with a battery-grade lithium carbonate (>99.5% pure) being readily produced. Progress is being made toward the production of an enhanced grade product with a target purity of 99.9%. The potential for production of high grade lithium hydroxide was also demonstrated previously and optimization of this flowsheet is currently in progress. These programs are being conducted under the direction of David Marsh, Senior Vice-President, Metallurgy and Technology Development.

Rehabilitation work on the access road to the site initiated in September has now been completed. This road will provide ready access to the deposit for large scale bulk sampling in 2016. Several hundred tonnes of petalite concentrate is expected to be produced from this bulk sample and will be used for full-scale production trials in the glass-ceramics industry and for piloting the lithium chemical production processes.

Update on Lithium Markets

Growing demand for rechargeable batteries in electric vehicles and home energy storage is expected to result in continued growth in consumption of lithium. Critical materials consulting firm Stormcrow Capital estimates that demand could reach 410,000 tonnes of lithium carbonate equivalent per year in 2025, compared to 200,000 tonnes in 2015. This translates into a compounded annual growth rate of a 7.8%. In their May 2015 Industry Report, Stormcrow further predicts that a supply deficit will emerge in the market as existing producers struggle to meet the rapidly growing demand.

This sentiment was echoed at The Battery Show in Novi, Michigan September 15-17, attended by Vice-President, Sales and Marketing, Pierre Neatby, where some 5,000 industry participants gathered to discuss the current and future state of rechargeable batteries. The consensus was that lithium ion battery demand would grow significantly over the next decade in electric and hybrid vehicles and energy storage applications.

On September 24, Avalon was one of the sponsors of the Benchmark Mineral Intelligence (“Benchmark”) Lithium Ion Battery supply chain conference in Toronto. The conference provided excellent perspective on the rechargeable battery market and its main raw material needs: lithium, graphite and cobalt. Guy Bourassa, President and CEO of Nemaska Lithium Inc., one of the most advanced lithium chemicals projects in Canada, noted that “the market will need some 100,000 tonnes of new lithium chemicals supply to come into the market to over the next 5 years to meet the growing demand”. Industry panel participants, which included Avalon President & CEO Don Bubar, agreed that this rate of demand growth will require multiple new producers in order to keep the market in balance.

The chart below presented by Benchmark shows the increasing trend of battery grade lithium carbonate prices (US$/tonne) over the past 10 years reflecting the growing supply demand imbalance:

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Lithium Carbonate Price Trend

To view an enhanced version of this image, please visit:
https://orders.newsfilecorp.com/files/3386/17578_chart-enlarged.jpg

Don Bubar, President and CEO of Avalon Rare Metals Inc. commented, “We are excited about all the new interest in the lithium sector. The rapid advance in lithium ion battery technology is creating new business opportunities for the Separation Rapids Project that were unimaginable in 1996 when Avalon first began work on the Project. Avalon is now uniquely positioned to be a long term supplier of both high purity lithium minerals to the glass ceramics market and lithium chemicals to the rapidly growing lithium ion rechargeable battery market.”

The technical information included in this news release has been reviewed and approved by the Company’s Senior Vice President Metallurgy and Technology Development, Mr. David Marsh, FAusIMM (CP), who is a Qualified Person under NI 43-101.

For questions or feedback, please email the Company at ir@avalonraremetals.com, or phone Don Bubar, President & CEO, at 416-364-4938.

Cautionary Statement
This news release contains “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements regarding the commencement and completion of its work programs, that that the sample will be processed to produce a high purity lithium mineral, that the pilot plant program will be completed, and concentrate available for distribution, in Q1 2016, that the road will provide ready access to the deposit for large scale bulk sampling in 2016, that several hundred tonnes of petalite concentrate is expected to be produced from this bulk sample and will be used for full-scale production trials in the glass-ceramics industry and for piloting the lithium chemical production processes, that growing demand for rechargeable batteries in electric vehicles and home energy storage is expected to result in continued growth in consumption of lithium and that Avalon is now uniquely positioned to be a long term supplier of both high purity lithium minerals to the glass ceramics market and lithium chemicals to the rapidly growing lithium ion rechargeable battery market. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “potential”, “scheduled”, “anticipates”, “continues”, “expects” or “does not expect”, “is expected”, “scheduled”, “targeted”, “planned”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be” or “will not be” taken, reached or result, “will occur” or “be achieved”. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Avalon to be materially different from those expressed or implied by such forward-looking statements. Forward-looking statements are based on assumptions management believes to be reasonable at the time such statements are made. Although Avalon has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Factors that may cause actual results to differ materially from expected results described in forward-looking statements include, but are not limited to market conditions, the possibility of cost overruns or unanticipated costs and expenses, and unanticipated results from the work programs, as well as those risk factors set out in the Company’s current Annual Information Form, Management’s Discussion and Analysis and other disclosure documents available under the Company’s profile at www.SEDAR.com. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Such forward-looking statements have been provided for the purpose of assisting investors in understanding the Company’s plans and objectives and may not be appropriate for other purposes. Accordingly, readers should not place undue reliance on forward-looking statements. Avalon does not undertake to update any forward-looking statements that are contained herein, except in accordance with applicable securities laws.

Canadian rare earth elements miners band together for survival in pricing downturn

Posted by AGORACOM-JC at 12:48 PM on Thursday, September 17th, 2015

  • China is the world’s major supplier of rare earth elements, prized for their unique properties — including powerful magnetic fields — and used in high-tech goods such as smartphones, laptops and electric cars.
  • Ian London, who heads the Canadian Rare Earth Elements Network, said companies are instead working together to develop new methods for extracting and refining the 17 metals that make up the rare earth group.

TORONTO — Experts say government support for research and development of Canada’s rare earth elements has encouraged new co-operation in the usually dog-eat-dog world of junior mining companies.

China is the world’s major supplier of rare earth elements, prized for their unique properties — including powerful magnetic fields — and used in high-tech goods such as smartphones, laptops and electric cars.

Prices rose dramatically in 2011, and by 2013 there were at least 11 Canadian projects at the advanced exploration stage before a steep slide in value put a halt on development.

Ian London, who heads the Canadian Rare Earth Elements Network, said companies are instead working together to develop new methods for extracting and refining the 17 metals that make up the rare earth group.

“Now that there has been a lull that’s gone on for a little while, folks have become much more realistic and are looking to address those challenges,” he said.

In the 2015 budget, the federal government promised to allocate $23 million over the next five years on top of money it has already invested to help companies work together to address the technical challenges of mining rare earth elements.

London said the money and leadership from Natural Resources Canada has helped the companies work together.

“There are a number of challenges faced by each of the developing companies, and this funding has encouraged them to collaborate and solve them,” London said.

Rare earth elements mining projects have been proposed in Ontario, Quebec, Saskatchewan, Labrador and the Northwest Territories.

The elements are called rare not because of scarcity but because they are not found in high concentrations, and are usually dispersed throughout an ore deposit.

Prices for the rare earth elements — the lanthanides, with atomic numbers 57 through 71, as well as scandium and yttrium — reached a peak in 2011 as demand for high-tech devices looked set to explode.

Control over rare-earth elements even became a plot point in the blockbuster video game Call of Duty: Black Ops II.

Yet headlines and heady prices led to oversupply, and prices have crashed. Europium saw some of the biggest swings of the rare earths, going from around US$600 per kilogram for much of 2010 to a peak above $4,200 in the second half of 2011 before falling back below $200 this year.

The downturn in rare earth prices has already resulted in the bankruptcy of Molycorp Inc., one of the largest producers outside of China, and Australian rare earths miner Lynas is struggling to stay afloat as its stock price has fallen more than 98 per cent since 2011.

Gareth Hatch, who founded Toronto-based processor Innovation Metals Corp. in 2011, said mining rare earth minerals has many challenges.

Many of the minerals that contain the elements in Canada have never been used for commercial production, he said, and separating the chemically similar elements from one another during the refining process can be costly in order for processors to avoid significant environmental impacts.

“There are different challenges along the way as you go from a rock to a high-purity valuable technology metal,” he said.

Government funding and co-ordination will be critical to turning the existing research into commercially viable products, Hatch said.

Boyd Davis, a principal at research laboratory Kingston Process Metallurgy, said that companies need to work together to identify the best practices for mining Canadian rare earth deposits because they differ significantly from those in other countries.

“For one group to do it on its own is difficult,” he said. “You end up needing a Canadian solution, not just because you’re patriotic but because you have a different situation.”

Davis said junior mining companies are usually very competitive, and the government’s work in the rare earths sector together was necessary to get them to work together.

“Animals only get together at an oasis, they don’t get together in the middle of the desert,” he said.

Source: http://www.ctvnews.ca/business/canadian-rare-earth-elements-miners-band-together-for-survival-in-pricing-downturn-1.2566604

Almost a Perfect Battery?

Posted by AGORACOM-JC at 12:43 PM on Thursday, September 17th, 2015

I can’t attest to the headline “Almost a Perfect Battery” claimed by a team of researchers at MIT, but they reported that they have developed a solid-state electrolyte, which can greatly boost modern battery technology. The researchers claim that the new design will allow batteries to endure hundreds of thousands of recharges, pack more juice and be safe from combustion. The research was published in Nature Materials (published August 17, 2015).

Now researchers at MIT’s Advanced Institute of Technology in Cambridge, Massachusetts and Korean consumer electronic producer Samsung have collaborated in developing a new approach to one of the three basic components of batteries: the electrolyte, which transports charged ions from one electrode to another during charging and discharging. Modern lithium-ion batteries use liquid electrolyte, but the MIT group have developed a better all-round solid-state electrolyte. Their invention belongs to a class of materials known as superionic lithium-ion conductors, which are compounds of lithium, germanium, phosphorus and sulfur.

Sourced from Cdn.rt.com
Sourced from Cdn.rt.com

The new solid electrolyte can withstand hundreds of thousands of recharge cycles, meaning a battery made with it would last practically forever. It has superior energy density, packing 20 to 30 percent more energy for a given volume. It is also more stable than a liquid electrolyte, meaning the rare (but widely publicized) cases of battery combustion would no longer be possible. This solid-state electrolyte also has other, unexpected benefits: while conventional lithium-ion batteries do not perform well in extreme cold, and need to be preheated at temperatures below roughly minus 30 degrees Celsius, the solid-electrolyte versions can still function at those frigid temperatures.

The paper in Nature Materials describes a new approach to the development of solid-state electrolytes that simultaneously addresses the greatest challenges associated with improving lithium-ion batteries. The key to making this feasible was finding solid materials that could conduct ions fast enough to be useful in a battery. Apparently, there was a view that solids cannot conduct fast enough, however the research team has dispelled that paradigm. The research team was able to analyze the factors that make for efficient ion conduction in solids, and hone in on compounds that showed the right characteristics.

The team says the principles derived from their research could lead to even more effective materials. So again we see that Rare Metals – the likes of lithium and germanium – Matter.

Until soon… Ian

Source: http://raremetalsmatter.com/almost-a-perfect-battery/