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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 386.47-0.2%Dec 5 4:00 PM EST
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To: Snowshoe who wrote (148815)5/29/2019 2:39:57 PM
From: Elroy Jetson3 Recommendations

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Maurice Winn

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The Mountain Pass "rare earths" mine in California used to be owned by Chevron because refinery fluidic-cracking units make use of a small amount of lanthanum and cerium in their nickel molybdenum catalysts.

The mine supplied almost all of the "rare earth" elements used in the world.

ln 2008 the mine was purchased by a group of hedge funds lead by Goldman Sachs which also bought a "rare earth" refiner in Estonia, Silmet in 2011. Silmet had been founded by a Swedish company controlled by Marcus Wallenberg.

This Goldman Sachs "rare earths" company saw their economics go to shit when China decided to poison the ground water in huge sections of Mongolia with the world's largest outdoor lake of sulfuric acid lake, to process the low-grade ore found in China. Goldman placed the company into bankruptcy.
.

Oak Tree Capital bought the company and sold the mine in 2016 to Shenghe, QTT Financial and JHL Capital for $20.5 a group of Chinese companies which exported the rare earths ore to China, until their economics turned to shit when China recently placed a 25% import tariff on rare earth ores.

Mountain Pass ore can be refined today by Silmet in Estonia, renamed Neo-Performance Materials by Oak Tree Capital.

The Goldman Sachs group had begun work on a processing unit adjoining the Mountain Pass mine before they bought Silmet. The consortium from China is likely considering completing that facility - but I'd bet Neo-Performance Materials in Estonia is still cheaper. I don't foresee business people from China having the expertise and mind-set needed to deal with California environmental laws. They could surprise me, but it doesn't sound like a good fit to me.

Even the currently small tariff of 25% on "rare earths" from China is sufficient to overcome the "subsidy" China is providing by deliberately contaminating Mongolia. Rare earth make up an infinitesimal percentage of each product cost.

This is all a non-event since both the EU and US expanded "rare earths" stockpiles in 2011 when China made similar tantrum threats.
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