Great Western Minerals (GWG.V) - developing the Hoidas Lake rare-earth elements project Full Report by Objective Capital , Nov 19, 2007(login for full report) Questions?
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Key Points:
GWMG’s Hoidas Lake project is a Rare Earth Elements (REE) operation
outside China and marks North America’s re-entry into the REE market.
The Hoidas Lake project is believed to have the potential to supply ten percent
of North America’s REE needs for many years. North America controlled the
REE sector until the late 1980s before losing out to China and the Hoidas Lake
project is expected to help rebalance the industry.
China dominates the REE market and accounts for approximately
97 percent of world supply. Given the critical uses of rare earth minerals in
high technology industries and North America’s consequent dependence
on REE, a major new rare earths project in North America is a positive and
important industry change.
REE have a significant and growing number of applications ranging from
catalysts in the petroleum and automotive industries to everyday household
appliances. REE are critical to state of the art defence technologies such as jet
fighter engines and missile guidance systems. Applications also include new
transportation technologies such as hydrogen-fuelled, hybrid and all-electric
cars. In addition, the consumption of nearly one-fifth of all rare earth elements
arises in the manufacture of permanent magnets that are used in electric
motors, computer hard disk drives, DVDs and CD-ROMs.
The United States currently is one of the largest REE consumers due to
its dominance in various high technology industries and alternative energy
ventures where REE are components. As US manufacturers shift their operations
to the Far East, demand for REE is expected to increase from Asia as well.
Availability and easy access to these minerals thus becomes crucial to the
longevity and prosperity of these industries. At present, the US annually
consumes 30,000 tons of rare earth oxides worth $1 billion. GWMG’s target
is to supply around ten percent of US consumption, or $100 million a year.
Demand growth for REE
Demand for REE remains robust with an annual volume growth of ten percent.
With continued demand growth from end-user applications worldwide,
demand for rare earth oxides is expected to be 150,000 to 155,000 tonnes by
2010. Much of the demand increase is expected to come from hybrid vehicles
as well as rechargeable batteries for such vehicles. Permanent magnets and
Nickel Metal Hydride (NiMH) batteries consumed close to 20,000 tonnes
of REE in 2004. By 2010 these two products are expected to consume over
60,000 tonnes of REE.
