"The history of Eureka lies in its future." - Lambert Molinelli, 1878


The author/editor of the Eureka Miner owns common shares of local mining stocks, General Moly (GMO) and Newmont Mining (NEM); together with benchmark miner Freeport-McMoRan (FCX). Please do your own research, markets can turn on you faster than a feral cat.

Thursday, April 29, 2010

Rhenium - Will the Sun Shine on One of Earth's Rarest Elements?

Morning Miners!

It is 6:16 AM. Grab a cup of Thor's java - I vote we take a break from the woes of Greece and Goldman Sachs; let's look down the road and see what may be shinning in our future instead. Yesterday a reader of the Report urged us look at what's happening with moly in Utah. Rio Tinto's Kennecott Utah Copper Corp plans to invest $340 million to build a molybdenum autoclave process (MAP) facility near their open pit Bingham Canyon mine southwest of Salt Lake City:

Kennecott to boost moly output with $340m autoclave facility (AMM, Tom Jennemann, 4/15/2010)

The Report carried an article on the molybdenum potential of this mine last September (Massive Moly Deposit Found in Utah, 9/30/2010). Molybdenum is a typical byproduct in the refining process of porphyry copper deposits such as Bingham. According to this article, Kennecott expects to produce moly at a rate of 60 million lbs a year by 2015. The MAP facility will process lower-grade molybdenum concentrate more efficiently than through a conventional roaster, leading to improved recovery rates. Kennecott project manager Doug Stauffer explains the process to AMM and Kelly Sanders, Kennecott president and chief executive officer, provided his view on the future of moly, "The outlook for molybdenum demand is very strong, driven by the rapid urbanization and industrialization of China and India. The production of molybdenum and gold make Kennecott one of the world's lowest cost producers of copper."

What caught the Colonel's eye was the expected recovery of rhenium - one of the rarest elements on earth. Rhenium is typically an ingredient in nickel-based superalloys used in the components for jet engines. By the 2015 time frame, Kennecott predicts a 9,000 lb annual production. Stauffer explains, "The rhenium market is a growing high-margin market and we're looking to become a stable and secure producer of that material."

A consistent theme of this Report is the importance of strategic metals to the future of Northern Nevada and more generally, as demonstrated by this case, the Great Basin. I don't yet know the rhenium potential in our county or state but I plan to do a little digging. Why? There may be another use for this important transition metal on the horizon, pardner.

A second theme of this Report is how electrified transportation and the emerging alternative energy industry may dramatically increase demand for certain metals like lithium, vanadium and silver (we'll close with a complete list of Eureka Miner articles on this exciting topic). Is there a role for rhenium?

The expansion of solar and wind farms is part of our national strategy to reduce dependence on foreign oil and improve energy security. One challenge in developing giant solar panels are the materials used in the many photovoltaic cells used to convert solar energy to electricity. Conventional solar cells are based on silicon, an inorganic semiconductor. Silicon has, however, the drawback of high production and processing costs and in some applications, the rigidity of the cell construction. An organic photovoltaic cell (OPVC) that uses organic polymers for light absorption and charge transport offers the advantage of low production costs in high volumes and increased structural flexibility. The main disadvantages of OPVCs are low efficiency, low stability and low strength compared to their inorganic cousins.

All this needs to be sorted out for large-scale solar applications, but rhenium may provide a way to improve the efficiency of the organic solar cell - a promising transition metal for improving optical absorption. The Chinese are working on such an approach:

Transition-metal complexes photosensitize organic solar cells (Wai Kin Chan, Department of Chemistry, The University of Hong Kong, 9/1/2009)

In fairness, this research is in the early stages and perhaps better approaches will be found with metals other than rhenium. The quantities of this rare element required for future solar cell production may also be small in comparison to the demand by jet engine manufacture. Today, I can't answer these questions but this Report is dedicated to running down any leads that may influence our mining future and prosperity in a positive way. Stay tuned buckaroos.

Below is a complete list of articles by the Eureka Miner's Market Report on emerging energy technologies technologies and the related mining important to our state and county:

The Next Big Thing in Northern Nevada (The Eureka Miner's Market Report, 9/28/2009)

A Big Step into the Future for Eureka County (The Eureka Miner's Market Report, 10/23/2009)

A Silver Lining for the Silver State? (The Eureka Miner's Market Report, 11/16/2009)

What's in a Battery for Eureka County? (The Eureka Miner's Market Report, 11/23/2009)

More News on US Gold & Western Lithium (The Eureka Miner's Market Report, 01/12/2010)

Buffet Wants More POSCO, Both Want Lithium (The Eureka Miner's Market Report, 03/19/2010)

Western Lithium, Gold, Silver, Copper & Oil (The Eureka Miner's Market Report, 03/12/2010)

A Third Tank on Our Hill? Lithium & Vanadium Update (The Eureka Miner's Market Report, 03/22/2010)

The Future Comes to Big Smoky - More Lithium in Northern Nevada (The Eureka Miner's Market Report, 04/14/2010)

Enough techno-talk, let's walk the walk:

4-WD is ON - rough roads in the marketplace; the VIX or "fear index" is in the 18-20s still too close to 25 for my comfort; metals & miners are better with benchmark FCX two-bucks and change above $75 (our new warning level), 10-year Treasurys are safely below 4% preserving a low-interest rate environment (what's this?)

The YELLOW light is switched back on our fuel gauge with oil above $80

A ORANGE light is ON for possible adverse regulation/legislation: Mine Safety Violations, Miner's claim fee, Miner taxation, Cortez Hills, mercury emissions &
General Moly Mt. Hope Water Rights

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

NYMEX/COMEX: Oil is up $1.47 in early trading to $84.69 (June contract, most active); Gold is down $7.2 to $1164.2 (June contract, most active); Silver is up $0.015 to $18.150 (July contract); Copper is down $0.0320 to $3.3345 (July contract); Western Molybdenum Oxide sits at $17.75, LME moly 3-month seller's contract remains at $18.14

The DOW is up 134.60 points to 11179.87; the S&P 500 is up 16.08 to 1207.44. The miners are mixed:

Barrick (ABX) $43.05 up 2.09%
Newmont (NEM) $55.90 up 2.06%
US Gold (UXG) $3.32 up 1.22%
General Moly (Eureka Moly, LLC) (GMO) $3.50 down 1.96%
Thompson Creek (TC) $13.21 up 1.45%
Freeport-McMoRan (FCX) $77.35 up 1.12% (a bellwether mining stock spanning copper, gols & molybdenum)

The Steels are mixed, (a "tell" for General Moly & Thompson Creek):

ArcelorMittal (MT) $40.51 down 1.07% - global steel producer
POSCO (PKX) $116.71 up 0.93% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is up 0.71% to $1,423,485.62 (what's this?).


Colonel Possum

Write Colonel Possum at colonelpossum@gmail.com for answers to your questions or to request e-mail updates on the market

Headline photograph by Mariana Titus

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