Wednesday, September 30, 2009

Interesting Rare Earth Deposits....

For more information about these rare earth deposits, click the link below.


Monday, June 15, 2009

Alternative energy...becoming a little less alternative

Over the years things like hybrid vehicles have gone from kooky concept to a common day commuter. It's success isn't because it is a car that gets super gas mileage, in fact it's mileage doesn't exceed that of a conventional clean diesel engine by much. Also, it has many fancy and expensive parts that mark up the price of the vehicle a good 10,000 dollars more that an average straight gasoline engine in its class. So why are they so popular? It is because more and more people are looking to do the right thing and make a difference when it comes to the environment, even if it costs a little more up front.

Even though these hybrid vehicles are a little primitive in their ability to deliver amazing fuel economy, they are a good start and are improving leaps and bounds every time a new one comes out.

The following components contain these respective Rare Earths:

The electric motor uses: Neodymium and Praseodymium and to a lesser extent, Terbium and Dysprosium

In the batteries: Lanthanum, and to a lesser extent Cerium, Praseodymium, and Neodymium

In the regenerative breaking system: Neodymium and Praseodymium, and to a lesser extent, Terbium and Dysprosium.

The amount of rare earths that go into the battery is about 75-80% of the total amount of rare earths that go into the car. That makes for one heavy about 40 pounds.

The next question that comes up is why does a hybrid car cost so much more than a regular car? The big price difference is in the added technology which contains light and heavy rare earth elements that aren't exactly cheap.

Neodymium = 5.1/kg or $11.2/lb
Praseodymium = 5/kg or $11/lb
Dysprosium. = 40.3/kg or $84.6/lb
Terbium = 136.6/kg or $320/lb
Lanthanum = 2/kg or $4.4/lb
Cerium = 1.2/kg or $2.70/lb

As we know it, the batteries are about 80% of the Rare Earth consumption of a hybrid. The main component of the battery, Lanthanum only costs 2 dollars per Kg or about 4.4 dollars per pound. The lesser components cost 11.2 dollars per pound for Neodymium and 2.4 dollars per pound for Cerium. This means that the battery carries about 30 pounds if lanthanum costs 125 dollars, and the rest of the battery costs about 65 dollars. So the battery alone has 200 dollars worth of Rare Earths.

There's probably another 10 pounds of Terbium and Dysprosium which cost 320 dollars per pound and 85 dollar per pounds respectively. This should add up to about 1500 dollars worth of metals for a total of 1700 dollars per vehicle. Where does the rest of the price premium come from? We can probably chalk that up to intellectual rights as well as a premium to accelerate the cost recuperation process.

One thing to consider is that as economies of scale become more efficient the cost of building these parts will go down. That being said, I'm not sure consumers will notice the difference when signing the paperwork for the purchase of their new vehicle. The price of Rare Earths is most likely to continue to increase as the demand for hybrids balloons in size. As it stands now there are about 250,000 hybrid cars on the road. This when transposed into demand for rare earths represents about 6.5% of the rare earth market.

In the coming years, the number or hybrid vehicles on the road should increase 12 fold to 3 million vehicles or more, just over 20% of the total market for vehicles. What this will do the rare earth market is quite remarkable. If you assume a constant rate of growth for all other applications for rare earths, the demand will double and the percentage of the demand dedicated to the automotive industry will go from 6.5% to around 50%. This is a staggering rate of growth and is occurring in a market that is basically a necessity for most people, a car.

As I mentioned earlier, these hybrids, which the Toyota Prius is synonymous for still have a long way to go before they become truly an efficient vehicle. After all, the EPA highway rating for a Prius is only about 45 mpg where as or a 2009 VW Jetta TDI, gets around 50. I have read many accounts of people habitually get 58+ mpg's (miles per gallon). Granted, city driving the hybrid is still better. The point is that there are many improvements still to be made. For example, the VW polo that Europeans enjoy gets a whopping 90-100 mpg’s. That is because it is a hybrid Diesel. A combination of efficient technology with the most efficient fuel should be the wave of the future.

One of the technological break-through that is still to come with respect to the automotive industry is in the batteries. The Nickel batteries are a bit of a handicap when you consider that the entire electronics industry when to lithium because lithium holds a charge for several times longer than nickel batteries. Vanadium is in that same category when it comes to the ability to hold a charge for a long time but isn't nearly as commercially used. The shift from Nickel to Lithium and or Vanadium is a change that is coming down the road for the auto industry that should improve the efficiency of these vehicles by a good stretch.

Of course everyone wants to know how to profit from this boom. I was a speaker at a show recently and was asked a surprising number of times about battery companies. These companies will stand to make money as the price of the batteries will be marked up by some margin. The problem however is that the consumer is only willing to pay so much. When the price of the inputs reaches a certain level, the end product producers will to maintaining the price in order to sell product, thus lowering their margins. That is my issue with end users such as battery makers and car companies.

The beneficiaries of this kind or boom will be the producers (mining companies). Given the fact that China controls 90-95% of the rare earth market and wants to internalize its production by restricting exports to the rest of the world, the price is set to increase for the category of metal making exploring and mining these deposits very attractive. If we look at a world class deposit such as Avalon's (T.AVL) Thor Lake which has incredible Heavy Rare Earth concentrations and tremendous size to the project, this company should become what Barrick (T.ABX) is to gold or what Microsoft (MSFT) is to computers. So at 1.80/share and a market cap of about 150 million dollars, it looks fairly undervalued. There are other fantastic advanced projects such as Rare Earth Elements (V.RES). There are a rising number of exploration companies such as Galahad Metals (V.GAX), Matamec (V.MAT) which have show some very encouraging initial results of both light and heavy rare earths, and there will be many more coming up as we get to a mania stage of the rare earth market. This mania phase is probably sill 6-12 months out, but it is good to be well positioned for it well in advance.

The lithium market isn't fundamentally as strong as the rare earth market, but neither was the coal market when the price of coal went from 40 dollars to about 150 dollars. There is a large amount of lithium in the ground, the issue is bringing it to market, IE mining it fast enough. That will also create a mania in this market, probably not to the extent of the rare earth market but none the less, it will be impressive. Western Lithium's (V.WLC) Nevada Kings Valley project is truly impressive and has a strong possibility in becoming a significant source of lithium. The historical numbers show 11 million tonnes of Lithium Carbonate equivalent. Channel Resources (V.CHU) has an interesting brine type deposit with a historical 2.7 million tonne Lithium Carbonate Equivalent deposit. Like these there are others. A vanadium project of note is Apella's (V.APA) Lac Dore and Iron-T vanadium projects are significant is size and grade.

If you are looking for the next mania in any market it will be the green sector and it will be kicked off by the auto industry's uses of metals such as Rare Earths, Lithium and Vanadium and it is coming sooner than you might think.

Saturday, June 13, 2009

Featured Companies=Success Stories

Hi all. A bit of an update as to what I am doing. Rare Earths and Lithium have been doing outstanding for my readers and I. Some of you may recall Avalon Rare Metals (T.AVL) and Galahad Metals (V.GAX) have performed quite well in this market and I am betting will only do better.

Avalon was recommended at 55 cents/share and it is around 1.80 per share. Galahad is experiencing very good gains too with a recommendation at 8 cents. Today it is around 14 cents.

These are the beginning of what is going to be a long list of success stories. For those of you who are on this site for the first time, go ahead and sign up. As of now, it is free.

A side note; I found an entertaining source of rare earths prices.

Have a look the prices are a little out of date, but the site updates them reasonably regularly.

That's all for now. Hope to see an more of you on one of the ONLY green investment letters!
The Green Dollar Report

Friday, June 12, 2009

Carbon offsets a reality

Though this might be interesting for everyone. Enjoy!

OTTAWA — The Canadian Press, Friday, Jun. 12, 2009 03:37AM EDT
The Harper government took the long-awaited step yesterday of detailing its plan to trade pollution permits on the open market.
Environment Minister Jim Prentice released two draft documents laying the ground rules for a federal carbon-offset scheme.
The guidelines set out which offset projects qualify for the federal system, how others can apply for inclusion, the value of each offset credit, how emissions cuts are tracked and verified, and other details of the plan.
"The offset system, like all elements of our climate-change plan, is aimed first and foremost at reducing emissions in Canada," Mr. Prentice said.
"And we will be rigorous in ensuring that credits will only be issued for projects that actually reduce the amount of greenhouse-gas emissions in this country."
The government will place a cap on greenhouse gases and allow firms to buy and sell emissions permits within that cap. Participants who don't meet the emissions targets can buy credits from those with a surplus instead of reducing their emissions.
Mr. Prentice told reporters after a luncheon speech in Ottawa that carbon-offset projects must have started after Jan. 1, 2006, to be eligible for inclusion in the federal trading system.
However, only carbon offsets made after Jan. 1, 2011, will count toward the reduction targets that industry will be required to meet.
Certified projects must be able to prove they're actually cutting carbon emissions.
An offset credit is equivalent to one tonne of carbon dioxide. The Environment Minister said the federal government will not set the price of carbon offsets. Market forces will instead dictate the permits' value.
The federal offset system will "complement" a patchwork of regional carbon markets, Mr. Prentice said, and "not supplant or duplicate them."

Wednesday, May 20, 2009

Green Standards; a hard transition?

President Barack Obama gestures during his meeting with former Secretaries of AP – President Barack Obama gestures during his meeting with former Secretaries of State George P. Shultz …

WASHINGTON – President Barack Obama is asking consumers to put their money — up to $1,300 per new vehicle by 2016 — behind his plan for higher efficiency standards for cars and trucks and tougher rules on their greenhouse gas emissions. In return, Obama said Tuesday in unveiling the plan, drivers would make up the higher cost of more fuel-efficient, cleaner vehicles by buying less gas at the pump.

It would take just three years to pay off the investment and would, over the life of a vehicle, save about $2,800 through better gas mileage, the president said.

While requiring that vehicle carbon dioxide emissions be reduced by about one-third by the target date, the plan also calls for the auto industry to build vehicles that average 35.5 miles per gallon. Government regulations have never before linked emission and fuel standards.

"The fact is, everyone wins," Obama said during a Rose Garden ceremony attended by representatives of the auto industry and environmental groups as well as state and federal lawmakers.

"Consumers pay less for fuel, which means less money going overseas and more money to save or spend here at home. The economy as a whole runs more efficiently by using less oil and producing less pollution," he said. "And companies like those here today have new incentives to create the technologies and the jobs that will provide smarter ways to power our vehicles."

Obama said the proposal would save 1.8 billion barrels of oil over the lifetime of the vehicles sold in the next five years, akin to removing 177 million cars from the roads over the next 6 1/2 years.

In that period, he said, the savings in oil burned to fuel American cars, trucks and buses would amount to last year's combined U.S. imports from Saudi Arabia, Venezuela, Libya and Nigeria.

The plan, to be proposed in the Federal Register of pending rules and regulations, must clear procedural hurdles at the Environmental Protection Agency and the Transportation Department.

Under the changes, the overall fleet average would have to be 35.5 mpg by 2016, with passenger cars reaching 39 mpg and light trucks hitting 30 mpg under a system that develops standards for each vehicle class size. Manufacturers would also be required to hit individual mileage targets.

Consumers were already going to pay an extra $700 for mileage standards that had been approved previously, according to administration officials. The Obama plan adds another $600 to the price of a vehicle, bringing the total cost to $1,300 by 2016.

The plan would effectively end a feud between automakers and statehouses over emission standards. Fourteen states and the District of Columbia had urged the federal government to allow them to enact more stringent standards than the federal government's requirements.

Obama's plan gives states the higher standard for emissions they requested but also sets a single national standard, sought by automakers, and more time for automakers to make the changes.

The president claimed historic progress in his bid for a "clean-energy economy" and hailed the deal accepted by diverse interest groups as a "harbinger of a change in the way business is done in Washington."

The ceremony brought together longtime adversaries. California state Sen. Fran Pavley, who wrote the 2002 law that required auto companies to reduce tailpipe emissions of greenhouse gases, sat next to Rep. Sander Levin, D-Mich., a longtime champion of the auto industry.

Nearby, Michigan Gov. Jennifer Granholm, who has defended General Motors and Chrysler as they struggle with government aid, sat next to California Gov. Arnold Schwarzenegger, who was once depicted in a Detroit billboard that read, "Arnold to Michigan: Drop Dead!"

Auto executives joined the event and later said they were pleased with the first steps.

"Clearly over time, the president is going to continue to work toward an integrated energy policy in the United States, the consumer is going to be involved and we're all going to move forward, I believe, on this journey to energy independence, energy security and long-term stability," Ford CEO Alan Mulally told reporters at the White House.


Associated Press writers Philip Elliott, Ben Feller, Ken Thomas and Dina Cappiello contributed to this report.

Monday, May 18, 2009

Green Gospel

This was a documentary that was on CBC's the fifth estate as far back as November of last year. I would encourage all of you to follow this link and read the summary. For the next couple of weeks should also be able to see the documentary on the website. The German experience is definitely one to be followed.

The problems that the Ontario farmer mentioned in the clip has experienced in connecting his clean electricity to the grid have been truly troubling. This is a clip that is worth watching.

Wednesday, February 4, 2009

Electric Trucks

Yesterday morning I got call from Jim over at FuelVapor Technologies to REV motors' Wine and Cheese/show and tell, and I decided that I would go check it out. I kind of thought that it would have been more fitting to have a pizza and beer event seeing as it was held at the company showroom/garage. These guys have tried to target a fleet vehicle market as they generally have a set route they do and it is generally around 100 kilometers a day (according to the company). Their plan is to outfit as many vehicles with electric motors that have a range of about 160 kilometers as possible. It is an interesting concept because they are not designing new cars, they are retrofitting pre-existing vehicles. The key here is the "rapid charging batteries" that can get a full charge in about 10 minutes. This is neat stuff but the infrastructure is probably the biggest question. They claim to have a potential recharging system but that is yet to be seen.

I'll obviously be having more discussions with the management of this company. We'll see what comes of that. In the interim, the question begs to be asked, if you have "zero emissions" coming out of the tail pipe, but you are burning dirty coal when you plug in your car, is your car green? That is something I would like to explore.

The thesis behind that would basically look like: if carbon from coal fired plant for the amount of electricity needed to charge a car per 100 kilometers is less than the carbon from the tail pipe, than this is a step to being cleaner. If not, than it is not a cleaner car. That is a study I will embark on and will keep you all posted with what I find.