I cannot believe that we’re just heading into the second quarter of this year. As soon as we’d celebrated the first day of spring here in New York, it dropped six inches of snow – go figure!
Whilst I cannot really claim that it caused a sensation, there were certainly some interesting reactions to CBS’ 60 Minutes TV program on rare earths aired here on the evening of Sunday, March 22. Perhaps not surprisingly, the “stars” of the show in-cluded people from Molycorp and the U.S. Magnetic Materials Association, together with former “Special Assistant to the President in the White House” Dan McGroarty. i.e. the people you’d expect to see. Still, it’s worth looking at.
If nothing else, the show did at least explain that the rare earths are, in reality, just not all that rare. But, as for the rest of what we were told, some of it was a little puzzling. Aside from informing us that, when it comes to mining, refining and processing, the Chinese have a virtual monopoly (debatable), perhaps one of the most puzzling assertions made was that the new F-35 jet fighter contains half a ton of rare earths.
From what I can discover, after poking about a wee bit, an F-35 Lightning II weighs (empty, i.e. just airframe, engine, fixed equipment, etc.) some 26,455 pounds (approx. 11.8 tons) and has a maximum takeoff weight (MTOW) of some 59,966 pounds (approx. 26.8 tons). So, that means rare earths constitute some 4.2% of the aircraft’s total weight sans payload, crew, etc. Hmm! Now that does come as a surprise.
Thrusting aside the always-controversial rare earths, as some may remember, back in July 2012 I went up to Yale University in New Haven, as an invitee of the Center for Industrial Ecology (at the Yale School of Forestry and Environmental Studies), to give a talk. I was invited back up to Yale just the other week by Tom Graedel (guest speaker at the 2010 MMTA winter dinner in New York) to attend the Spring Meeting of the Criticality Consortium: a day and a half of fascinating presentations from Professor Graedel, his research staff and guest speakers.
Professor Graedel and his research team are doing both extremely important and interesting work there with their “Criticality of Metals” project. It was Professor Graedel who developed the minerals “criticality matrix” that originally appeared, back in 2007, in the seminal report Minerals, Critical Minerals, and the U.S. Economy from the National Research Council, and his matrix concept was, subsequently, developed and is currently used by the European Commission in connection with its Critical Raw Materials Initiative. And, indeed, as one of the guest speakers, Carlo Pettinelli, Director, Sustainable Growth and EU 2020, Enterprise and Industry DG presented on Critical Raw Materials: the European Perspective. From this we learned not only about the EC’s critical raw materials list as a policy tool, but also the fact that some €650 million has been committed to raw materials research between now and 2020.
Over the next several editions of The Crucible I look forward to being able to share with you just some of the knowledge and insights that we gained during our time up at Yale.
In the meantime, though, I look forward to seeing at least some of you, I hope, at the MMTA conference in Toronto at the end of April. There’s a great line-up of speakers. And so, from a very wet NY, my best wishes, as always.
Tom Butcher, March 30th, 2015 Hard Assets Investor ©2015 Tom Butcher