update on the japanese rare earth market

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Update on the Japanese Rare Earth markets Metal Page Minor Metal conference in Beijing September 13 th -17 th AMJ Shigeo Nakamura

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Mr. Shigeo Nakamura provides an update on the Japanese rare earth market since the tragic earthquake and tsunami hit Japan at M

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Page 1: Update on the Japanese Rare Earth Market

Update on the Japanese Rare Earth markets

Metal Page Minor Metal conference in Beijing

September 13th-17th AMJ Shigeo Nakamura

Page 2: Update on the Japanese Rare Earth Market

Environmental issues

Fuel cells, hybrid vehicles, electric vehicles

Lighter(Ti、Mg) Smaller(RE Magnet) Li-Ion Battery(Li,Co)

N-H Battery(Ni, Nd, La,)

New Energy

Solar Battery(CIGS,CdTe,Si) Wind power(NdFeB Dy) Geo Thermal (Ti stainless) Biomass(Ti, Stainless) OTEC(Waste heat recovery) Smart Grid(Superconducting) Nuclear power (NdFeB Ti Zr)

Catalyst (automobile emissions):Pt,Pd,Os,Rd, Cracking of heavy oil(Mo,V,Co,Ni,W etc.)

Photo catalyst(Ti)

Environmental Economics and Environmental Metals

Rare metal material market is expanding

more globally

Energy saving technology

Sensor Technology LED(Ga,In)

Digital Technology

3R Technology

HEMS

Page 3: Update on the Japanese Rare Earth Market

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Rare Earth Import Trends from 2001

till end of 2010

As Material

30,515Mt

41,407Mt 39,724Mt 34,330Mt

18,263Mt

Total quantity from January till June 2011 is 13,838Mt.

29,600Mt

Page 4: Update on the Japanese Rare Earth Market

Rare Earth import share from China and other countries.

90% 90%

86%

90%

Rare Earth import increased 930% in total amount for first half of 2011 compared from last year’s first half.

77% 85% 80%

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Page 5: Update on the Japanese Rare Earth Market

Background of the recent drop in RE market

• Price adjustments in reaction to soaring market. • After the earthquake, (April to June) of this year

due to increased imports of inventory accumulation, since July the stock demand decline.

• Demand decreased In August because of summer season

• To determine the benefit speculators rushed to sell low in a hurry

• Australia (Lynas) and U.S. (Molycorp) came out in the future stability of supply.

Page 6: Update on the Japanese Rare Earth Market

Rare Earth chart (Nd & FeDy)

6 ジャスミン革命以降の異常な値上がり。

From US$60 to US$460(8 times increase)

From US$280 to US$2,960( 10 times)

Page 7: Update on the Japanese Rare Earth Market

Rae Earth chart (La2O3 & CeO2)

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La Metal : from US$10 to US$150 and down to$90

Ce Metal : from US$10 to US$150 and down to US$88

Page 8: Update on the Japanese Rare Earth Market

• World reserves REO resources: 99Million t • Mining amount in 2009: 124,000 tons • Reserve-production ratio: 798 Years • Chinese Reserves:36,000,000 tons • USA Reserves:13,000,000 tons • CIS Reserves:19,000,000 tons • Australia Reserves:5,400,000 tons • India reserves:3,100,000 tons • Vietnam Reserves: over 2,000,000 Tons

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World reserves of RE resources

Page 9: Update on the Japanese Rare Earth Market

Supply and demand of resources and avoidance of resource shortage

Risk avoidance

Supply of the resources

Shortage of the resources

New demand for resources

Development of substitution materials & Recycle

New development of new deposit

Now Future 9

Page 10: Update on the Japanese Rare Earth Market

Development of

substitution materials

• Panasonic, Mitsubishi Chemical, Industrial Technology Research: 20% reduction in Tb and Dy for phosphor performance.

• Hitachi and the University of Nottingham, UK: Development of alternative magnetic materials containing Dy.

• TDK and Toyota: 40% success in reducing motor Dy in HEV • ULVAC, Mitsui, Tohoku University: ITO (transparent electrode)

during development goals to halve the amount of indium. • Nissan Motor Co. and Nagoya University: Developing alternative

materials for automotive exhaust gas purification apparatus platinum.

• The Japanese government announced that a budget of several billion yen aid for 10 years from 2012 for the development of substitution materials of rare earths. (Nikkei, 5 September)

From Nikkei of Aug. 19th 2011

Page 11: Update on the Japanese Rare Earth Market

Rare earth project Map

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Dongpao Vietnam

Sojiz/toyota 5000-7000Mt

Mount Weld

Lynas 22,000Mt

Nolans bore

Arafura 20,000Mt

Stepnogorsk Kazakhstan

Sumitomo Corp 3,000Mt

Orissa India

Toyota 4, 000Mt

Stenkanbskural South Africa

Great western mineral 2,700Mt

Mt.Pas Molycorp 40,000Mt

Green land Greenland Mineral

20,000Mt

Holidas Lake Great western

mineral 3,000Mt-5,000Mt

Thor Lake

Avalon venture 10,000Mt

Lugingol,Mushgai Khudag

Mongol 10,000Mt

Page 12: Update on the Japanese Rare Earth Market

Vietnam Dong Pao Rare Earth deposit

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Dong Pao deposit was researched by JOMEC from 2001 and Bastenasite ore boby contained 3,170,000Mt at REO 7.06% to 10.63%. Sojiz and Toyota tsusho is developing.

Page 13: Update on the Japanese Rare Earth Market

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Mongolian Rare Earth deposit

Other REE deposits Mushgai Khudag REE deposit

Lugiin gol

Khan Bogd

Mushgai khudag

Khalzan Burged

Page 14: Update on the Japanese Rare Earth Market

Kazakhstan Rare Earth Project

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Sumitomo Corporation established the Rare Earth Joint venture company with Kazatomprom for 3,000Mt REO base

project.

JOGMEC sign contract for technical assistance of Rare Earth recovery

from Uranium residue of Kazatomprom.

Page 15: Update on the Japanese Rare Earth Market

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Mountain Pass Molycorp

• Molycorp will increase production plan from 20,000Mt to 40,000Mt (REO).

Sumitomo corporation will study US$ 130 million investment with JOGMEC for stable supply to Japanese market of RE materials.

Page 16: Update on the Japanese Rare Earth Market

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Mt. Weld project Australia • Sojiz and Rynas agreed

90,000 Mt of RE supply for 10 years to Japanese market.

• JOGMEC and SOJIZ takes 30% of the share from Lynas in 2011.

・Australian Lynas will produce 22,000Mt of Rare Earth from 2013. ・Separation and refining process in Malaysia settledafter floating ore dressing in Australia.

Page 17: Update on the Japanese Rare Earth Market

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Thor Lake Project Canada

Y La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Lu 55% 0.1 0.02 0.1 0.2 1.8 0.7 11.6 2.5 15.6 3.1 5.4 0.6 2.2 0.7

Page 18: Update on the Japanese Rare Earth Market

Others Rare Earth Project • Nolans Bore by Arafura Resources Limited(Australia) • Frontier Rare Earth project (South Africa) • Great Western Minerals(LCM) western cape province • Vergenoeg Mining Company (south Africa) • Greenland minerals and energy (Greenland) • Pitinga mines( Brazil) Neo Material & Mitsubishi corporation

• Kutessai by Summit Atom rare earth company (Kazakhstan) Kazatom prom and Sumitomo corporation

• Chavara, Manavalakurichi (Indian rare earth) • Ytterby(Canada) Benson(USA) Laocai(Vietnam) Mabel

creek(Australia) as Grass-root exploration by JOGMEC

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Page 19: Update on the Japanese Rare Earth Market

Update on the Japanese minor metals markets

Metal Page Minor Metal conference in Beijing

September 13th-17th AMJ Shigeo Nakamura

Page 20: Update on the Japanese Rare Earth Market

Minor Metal Market Trends in Japanese market

• New business in Japan after the earthquake 3.11

• Overview of electronics, functional, structural materials and base metals.

• The development of environmental metals for the new energy and HEV fields.

• New research and development and international relocation and hollowing out of Japanese industry

Page 21: Update on the Japanese Rare Earth Market

Classification of the Metals Market

Element character Market Scale

Uneven distribution

Influence to The market

(A) Electronics

Use

In,Cd Ga, Ge,Ta, Nb, Co, Li, Sr, Bi,

The field of IT materials are easy to be affected by the down stream industry than the upper stream.

100Mt~10,000Mt

Uneven distribution

Negotiated transaction speculation & manipulation

(B) Functional

Use

Ti, RE, Zr, Sb, Mg,W, Mo,Te,Se

Functional material’s market is complicated because of the political reason.

10,000Mt~ 100,000Mt

Uneven distribution

It is easy to get on artificial trade policy.

(C) Structure

materials

Ni,Cr,Mn,Mo,W、V, FeNb,Si

It is easy to be affected by the business conditions of a stainless steel and steel market.

100,000Mt~ 1,000,000Mt

quantity of existence is enough

The influence of stainless steel fields are strong

(D) Base Metal

Cu, Zn, Pb, Al, Sn, Ni

LME commodity Over 1Million ton

quantity of existence is enough

finance phenomenon is remarkable

Page 22: Update on the Japanese Rare Earth Market

Rare Metal Function and the Use of environmental metal in advanced Industries

Ga,Ge,In,Te,Bi,Cd, (Electronic materials)

A compound semiconductor, the field of FPD, a target, LED, a Pet resin catalyst, light industry, infrared rays, a fluorescent substance, others

R.E. (Same as above) Optical lens, magnetism, fluorescence, a catalyst, electron, superconductor

Ta Nb(Same as above) capacitor, optics, Hard Alloy, electron, special steel and heat-resistant

Sr Ba (Same as above) Magnetism materials, ferrite, X-rays cover, Ceramic condenser, pipe ball glass

Zr Hf (Same as above) Atomic energy, fireproof thing, electronic materials, fine ceramic, sensor

Li Be(Same as above) A secondary battery, special glass, an oxide single crystal, aviation, spring materials

Ti Mg(function material) Aviation / Desalination conversion / chemical plant / generator / atomic energy / iron and steel / Al addition

W Mo( Same as above) Hard alloy tool, Heiss, electronic parts, a catalyst, an alloy, a burning board

Ni Co( Same as above) Stainless steel, an alloy, plating, a battery, magnetism, a catalyst, heat resistance

Sb Se( Same as above) incombustibility agent, a battery, a decrease friction alloy, glass clearness agent, Mn refinement

Page 23: Update on the Japanese Rare Earth Market

Electronics Metals (Indium & Ga) Up Trend

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Gallium and indium with a peak in May and then, conditions have remained weak

Page 24: Update on the Japanese Rare Earth Market

Electronics Metals Trend (Cobalt & LiCO3) Stable

’10 Jan. ’09 June

24 Co is US$/Lb LiCo3 is RMB/Kg

Lithium and cobalt are heavy stock, still tends to lower future quotations

Page 25: Update on the Japanese Rare Earth Market

Functional Metals Trend (Titanium, APT) going up

’10 Jan. ’09 June

MRB Chart

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Titanium and tungsten have a strong demand in anticipation of high prices yet.

Page 26: Update on the Japanese Rare Earth Market

Functional Metals Trend (Antimony, Selenium) going up

’10 Jan. ’09 June

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Sb and Se has peaked out in April, then followed by weak.

Page 27: Update on the Japanese Rare Earth Market

Base Metals Trend (LME Cu & LME Al) Down & Up

’10 Jan. ’09 June

MRB Chart

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Copper and aluminum are weak in terms of supply and demand, then future trend will be depend on Chinese demand.

Page 28: Update on the Japanese Rare Earth Market

Precious metals trend

(Comex Gold & LME Ni)

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Financial markets have a risk aversion to buying gold. Nickel is a weak trend in the stainless steel market.

Page 29: Update on the Japanese Rare Earth Market

(3 Trillion Yen) Silicon Wafer Photo Mask Photo resist

(70 Trillion yen) Car industry

(35trillion yen) Liquid crystal TV plasma TV DVD Digital mobile music game console digital camera &video

(14 Trillion yen) Mobile phone

(22 Trillion Yen Personnel computer

(11 Trillion yen) Electronics parts printed wiring board Ceramic condenser crystal oscillator connector switch

(8 Trillion Yen) Flat Panel Display Liquid Crystal market Plasma Display EL Field emission

(28Trillion Yen) Semiconductor Micro processor DRAM System LSI Analog Discreet

(5Trillion Yen) Flat Panel display Glass Filter Back light Color filter LCDDriver polalizing Plate Light refractor (1 Trillion Yen) General electronics parts/Epoxy resin/GlassMaterials/Alminium plate/Ceramic plate/Crystals

(3.3 Trillion Yen) Nonferrous metal, Noble metal, Rare Metals Magnetic materials Fluorescent substance Condenser Semiconductor Semi conductive compound Battery materials Heat electric element Lenz materials Hard tool materials Powder metallurgy Light metals Super alloy Catalyst materials Fine chemicals materials

Electronics 9 Trillion Yen

Rare Metal 3.3 Trillion Yen

Electronic device 47Trillion yen

Set machinery 141 Trillion yen

Market size of digital industry

Page 30: Update on the Japanese Rare Earth Market

Othello Game of the Industrial structure

(1) Resource industry

(2) Material Industry

(3) Parts Industry

(4) Assembly industry

(5) Intelligent Industry

Page 31: Update on the Japanese Rare Earth Market

car exhaust gas purification catalyst

Flat Panel Display

LIB・NH

Rare Earth Magnet

Electronic parts liquid crystal

Environmental safeguard

Clean Energy

Energy Saving ECO-MACHINARY

Information home Electricity

Photo-catalyst toxic substance

resolution

A fuel cell solar battery

Digital camera Digital appliance

Mobile phone

LED

1trillion Yen Market

78 Trillion Yen

96 trillion Yen

5.3 Trillion Yen

Environmental field supports to the Japanese economy.

New Energy

Page 32: Update on the Japanese Rare Earth Market

The trend of the embironmental metals demand.

Electronics materials (information household appliance)

Base Metals (Social infrastructure)

Structure materials (Eco House)

Functional materials (HEV, Aviation and New Energy)

Environmental Metal's Demand

Page 33: Update on the Japanese Rare Earth Market

Special Steel

car exhaust gas purification catalyst

Hard alloy tool

Secondary Battery LIB・NH

Rare Earth Magnet Small motor

Electronics Parts LCD

Pd,Pt,Rd,Ce

W,Co,Ti,Mo,V

Li,Co,Ni,RE

Nd,Dy,Co

Ga,Ta,Ni,Zr,Nb,Pt RE(Dy,Ho,Y) In

Ni,Cr,Mo,Co,Mn,V

自動車 (HEV,EV)

Energy-saving home appliance

flat panel television

Digital Camera Optical article

Mobile phone

Car Steel sheet

advanced robot

Environmental metal's use

Page 34: Update on the Japanese Rare Earth Market

Smart Grid HEMS

Ni,Cr,Mo (Stainless) W,Co,Ta (Drilling Bid)

CIGS Cd,Te

Si Solar Ru-Type

Ga,In,As (LED)

Y,Tb,Eu,La,Ce (Fluorescent)

Pt,Pd(Catalyst) Pd(Hydrogen

Separation Membrane)

Ni,Cr,Mo (Stainless Steal)

Ti (Cooling Parts) Zr ( Fuel cladding )

NdFeB(RE Magnet) Li,Co,Ni,Mm (LIB, Ni-H)

Pt,Pd,Rh(Catalyst)

Solar Battery

Hydrogen Fuel Cell

Energy & Environmental

issues Nd,Dy,SmFeN (RE Magnet)

LED・Fluorescent Geothermal power

Nuclear Power ECO Car EV・HEV

Wind Power ECO House

Japan's future new business

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Page 35: Update on the Japanese Rare Earth Market

Conclusion (Future Forecast) • Electronic materials market, once the minor metal's

market was unstable and will recover, increasing speculation and price manipulation.

• EV and HEV market is accelerating, and rare metal material market is expanding more globally.

• Remarkable development of the secondary battery market, the market becomes more active, such as lithium and cobalt and rare earth elements.

• Development of new energy field (especially solar power and wind power) will influenced to the expansion of rare metals and rare earth market segments,

• After the earthquake, Japanese materials industry is forced to expand to overseas. Meanwhile, research and development for new energy and environment sector will be growing more.

Page 36: Update on the Japanese Rare Earth Market

Thank you for your attention

AMJ Shigeo Nakamura

http://www.amjc.co.jp/