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http://www.businessweek.com/news/2010-10-2...er-futures.html

 

JPM HSBC sued over silver pricing.

 

claims a whistleblower contacted the CFTC last year and reported the banksÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢ conspiracy to suppress prices of silver futures to profit from ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“enormousÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ short positions in silver futures.

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And guess who is the most likely to have been involved in the blatant insider sell down of ARU the two days leading into the announcement of the cap raising? No accusations being made, but suspicions are around ....

 

"Here you go, boys - sell your ARU shares now while they're at 1.70, and push 'em down to around 1.40-ish. Then you can replace all the ones you sold with newly created placement shares at 1.20 in a couple of days time. Oh yes - have a good early Christmas, boys. Oh yeah - and while we're at it, keep this quiet - it won't be announced for a couple of days yet".

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cursory examination of ASX stocks (see below) involved in REEs exhibit similar selling tendencies over the last few days

 

ALK Alkane

ARU Arafura

AIW AusAmerican Mining

GGG Greenland

GXY Galaxy

KOR Korab

LYC Lynas

NAV Navigator

NTU NT Uranium

ORM Orion Metal

 

loose thinking sinks portfolios.

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Ahh good my request was fulfilled.....Been lots of discussion of late with rare earths so thought we needed a thread for it all.

This was last week sometime i found this and worth a read.Mostly USA companies in it but still relevant worldwide. V1

Rare Earth in BlackBerry to Prius Underscores Alarm Over Supply
Rare-earth elements help give BlackBerrys their buzz, Toyota Priuses their battery power, and computer hard drives their spin.
The rare earths, a group of 17 metals including neodymium, lanthanum, cerium and europium, also have industrial and national-security uses, such as in petroleum refining, fiber- optics transmission, and military radar and missile-guidance systems.
The range of uses explains why U.S. lawmakers, officials in Japan and Germany and manufacturers of components that need these materials say they are alarmed by steps taken by China, which provides 97 percent of the world's supply, to reduce exports by about three-quarters.
Components made with rare earths are so ubiquitous that they aren't easily replaced, according to Jack Lifton, founder of Technology Metals Research LLC in Detroit, which advises investors in specialty metals. "Without anyone noticing, the rare-earth magnets have become overwhelmingly essential," he said yesterday.
Rare-earth magnets account for 80 percent of the market for "permanent" magnets that retain their charge, up from zero in 1980, he said. They are in electric motors, small earphones and mobile phones. When a BlackBerry vibrates, a high-powered magnet made with neodymium is at work converting electrical power into mechanical energy. "They are pervasive in our technology, especially in miniaturization of electronics," Lifton said.
Automakers relying on neodymium-iron-boron magnets, used in power-steering equipment, "are concerned about long-term access to under-the-hood magnets because they import them from China and Japan," Lifton said in a phone interview.
Ford 'Monitoring' Situation
Todd Nissen, a spokesman for Ford Motor Co., said in an e- mailed statement that "we're monitoring the situation and do not expect any impact on our production." He declined to comment on how any shortage of the minerals would affect commodity prices or on Ford's sources of rare-earth metals.
While the elements aren't as rare in nature as the name implies, they are difficult to find in profitable concentrations, expensive for Western producers to extract and often laced with radioactive elements. China has come to dominate the market because it has been able to produce the elements more cheaply and with fewer environmental restrictions than its competitors.
Japan, the largest importer of Chinese rare-earth materials, has said China halted shipments to Japanese users last month after a collision in disputed waters between a Chinese trawler and the Japanese Coast Guard led to the fishing- boat captain's detention. Chief Cabinet Secretary Yoshito Sengoku said Oct. 20 that the import situation "hadn't changed" weeks after the captain's release.
Chinese Delays
China said this week that it hasn't suspended shipments to the U.S. and Europe, as reported on Oct. 20 by the New York Times. Chinese customs officials are delaying shipments by various means, such as imposing extra inspections, according to industry participants who spoke on condition of anonymity because of concern about Chinese reaction.
China's 72 percent reduction in export quotas for the second half of this year, which it announced in July, and the customs delays since then are driving up prices. U.S. Representative Edward Markey, chairman of the House Select Committee on Energy Independence and Global Warming, asked the Obama administration on Oct. 21 to report on China's export restrictions and ramifications for the military and U.S. clean- energy producers.
'Potential Threat'
China's "apparent willingness" to use its supply for leverage in wider international affairs "poses a potential threat to American economic and national security interests," the Massachusetts Democrat said in a letter to four Cabinet members. China said in July that it cut export quotas to allow it to close polluting and inefficient mines while continuing to meet domestic needs. The nation will "continue to supply rare earth to the world" while maintaining restrictions "to protect exhaustible resources and ensure sustainable development," the Commerce Ministry said in a statement Oct. 20.
Prices have climbed sevenfold in the last six months for cerium oxide, which is used for polishing semiconductors, and other elements have more than doubled, according to Metal-Pages Ltd. in London, which tracks rare-earth prices. China accounts for about 36 percent of global rare-earth reserves, the largest share, and the U.S. is second, with 13 percent, according to the U.S. Geological Survey.
Molycorp's Mine
The uncertainty over Chinese supplies and rising prices are encouraging efforts to produce new supplies. Molycorp Inc. is seeking $280 million in U.S. government loan guarantees to help finance restarting an open-pit mine in Mountain Pass, California, in the Mojave Desert. The mine once met almost all the world's demand for rare-earth metals before closing down in 2002 due to competition from cheaper Chinese supplies. Molycorp plans to resume production by the end of 2012.

Makers of catalysts for the oil-refining industry are among the major users of rare earths in the U.S., Lifton said. Albemarle Corp. of Baton Rouge, Louisiana, W.R. Grace & Co. of Columbia, Maryland, and BASF SE's catalysts unit in Iselin, New Jersey, are three of the largest importers of lanthanum, used to break down heavy crude into light crude, Lifton said.
Lanthanum also is used for nickel-metal hydride batteries that power hybrid cars, such as Toyota Motor Corp.'s Prius.
Toyota said last month it created a special unit to ensure its supply isn't disrupted and recently announced a contract to obtain rare-earth metals from India. The carmaker, the world's largest producer of gasoline-electric vehicles, also uses the materials in electric motors.
Lanthanum, Samarium
With the exception of lanthanum and samarium imported by Electron Energy Corp. of Landisville, Pennsylvania, the U.S. "mostly imports finished products" made with rare-earth materials, Lifton said.
Electron Energy uses the samarium to make samarium-cobalt magnets that are used mostly in military applications, including missile guidance systems, radar, and electronic warfare systems.
Commercial and military airplanes also use samarium-cobalt magnets for power generation, Peter Dent, vice president for business development at Electron Energy, said in a phone interview.
"If you want to move an electron you need to have a magnetic field to do it," Dent said. Magnets made from rare- earth materials do the job efficiently by "either converting mechanical power to electrical energy or vice-versa," he said.
Wind Turbines
Neodymium-based magnets also are used in wind turbines "where they want as high a magnetic power as they can get," Dent said.
Sarah Howell, spokeswoman for the American Wind Energy Association in Washington, said in a statement Oct. 21 that few utility-scale wind turbines in the U.S. currently use rare-earth metals.
"While their use in wind turbine technology is attractive, the rate at which they will be adopted in the future will depend in part on the cost, availability and reliability of supply," she said. "It's also important to realize that the U.S. has domestic rare-earth resources that it can develop with capital- intensive investment, and that there is ongoing R&D on substitutes."
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Beware the boom in rare earths 26 Oct 10 - By Gaurav Sodhi

When an illegal fisherman from China was caught by Japanese authorities plying his trade in disputed waters, few would have thought the incident would provide further oxygen to a boom already under way.

 

As recently as six months ago, few people had heard of 'rare earths' ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ the obscure metals that are used in specialised applications in the defence, consumer electronics and nano technology industries (demand by application ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ Magnets 38%, battery Alloy 10%, Metallurgy ex battery 7%, Auto cat 5%, FCC 11%, polishing powder 10%, glass additive 4%, Phosphors 10%). Now they are a prime hunting ground for speculative gains.

 

In short time, companies like Lynas Corporation, Alkane Resources, Arafura Resources and Navigator Resources have come from being faceless spec stocks to pioneers in a new boom.

 

That's because China, which controls more than 95% of the global supply of rare earths, has been ruminating the possibility of 'reducing' exports of these vital minerals.

 

This has long been a concern; in the early 1990s the Chinese autocrat Deng Xiaoping prophesised China being the Saudi Arabia of rare earths, implying it could use its mineral wealth as a force for influence, much as the Saudi Kingdom uses oil.

 

These musings have now reportedly become reality, with news that China has banned exports to the world's largest importer, Japan. This is all, supposedly, about Japan detaining the now famous illegal fisherman.

 

In response, rare earth stocks, or more accurately, any small company even hinting at thinking about the possibility of developing a rare earths project, have soared. Three protagonists of the boom, Lynas, Alkane and Arafura, are up over 120%, 200% and 140% respectively, in the past three months alone.

 

So is this the dawning of a new industry?

 

No doubt all buyers of rare earths will now be seeking to diversify their sources of supply away from China. But does that mean that today's prices will prevail? Let's examine the supply and demand situation a little more closely.

 

The market for rare earths is a tiny one; last year less than US$1.5bn worth of the minerals were sold worldwide. That's because only minute quantities are needed in practical applications. A pinch of neodymium, for example, makes mobile phones vibrate. The petite size of the global market means that incremental increases in supply can have big impacts on price.

 

And new supplies are on the way.

 

Despite the name, rare earths are anything but. They were given that name because their chemical properties are so close that for a long time, they couldn't be separated into individual elements; with today's technology, that constraint is redundant, along with the anachronistic term 'rare'.

 

Processing and separating elements accounts for more than two-thirds of the cost of production. This, rather than a scarcity of ore, is the primary constraint on new supply.

 

China dominates global supply because poor environmental standards and low costs make processing cheap. As the price of rare earths increases, however, processing ores is no longer prohibitive and supply is free to expand.

 

Though producers are salivating at today's prices, high prices are doing their job of encouraging new supply. Exploration and development projects are underway in Korea, the US, Canada, Europe and all over Africa. The largest rare earths orebody in the world has recently been uncovered in Greenland.

 

Explorers who had ignored rare earths altogether are falling over themselves to approve new projects, all greeted by eager manufacturers such as Samsung and Sony more than willing to provide finance. Alkane and Navigator, for example, were both developing gold mines before embarking on rare earth projects. The US government is even talking about subsiding new domestic production.

 

Where does this leave the champions of the boom?

 

Potential projects need three things; a signed up customer, economic proportions of 'heavy' and 'light' rare earths and a route to processing.

 

At least two producers satisfy these requirements. Lynas Corporation and Alkane Resources have advanced projects that will most likely move into production. Our beef is not in their viability but in their valuation.

 

Making a mine and making money are not the same thing. If you have invested in rare earth projects, you are probably sitting on healthy profits. Now is the time to take them. If you are sitting on the sidelines, taunted and tempted by escalating share prices, our advice is to stay put.

 

It is highly likely that in a few years' time, this tiny global market will be flooded with new supply that will force a spectacular price crash. And like all booms, it will seem obvious after the bust that this was all folly.

 

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Good and valid points, nipper.

Thanks for bringing the reality back to our attention.

 

On the other hand, the charts have already shown top reversals for almost all of the stocks on yesterday's list of yours.

LYC attached - it hit its top a week ago.

 

post-20537-1288353080_thumb.jpg

I don't know whether it's true that the Chinese had an embargo in place that has now been rescinded - the two parts may well have been published at convenient times to assist "interested parties" in driving the prices up, and now explain (after the bubble is deflated) why the peak had been reached - thereby somewhat deflecting any idea of the game being rigged or orchestrated.

 

One aspect seems to be overlooked in all the "mainstream" discussions pro and con:

Rare Earths play also a significant role in military applications. While the Chinese may have simply been rattling the cage, they have certainly alerted some "thinkers" in the USofA. It doesn't take much to connect the dots and find an explanation for the discrepancy between, say, a LYC chart and one for NTU. Check on a globe where NTU's U3O8 and REE resources lie, as opposed to LYC's. :graduated:

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I think you are all very brave in trying to make money from a sector which China effectively and totally controls. I know how they like to play when they get to set the rules and I don't think it is particularly enriching to be the punching bag. I don't have the trading skills of arty et al so for me rare earth metals as an investment theme has been sent straight to the morgue.

 

Here is a blogentry about China's recent de facto squeeze on rare earth metals.

 

http://www.nakedcapitalism.com/2010/10/chi...earths-ban.html

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Hi Arty "Check on a globe where NTU's U3O8 and REE resources lie, as opposed to LYC's"

 

Perhaps I'm obtuse Arty but LYC 's Mt Weld is 300kms north east of Kalgoorlie, NTU's Gardner Tanimi/Gardner range is 200kms South east of Halls creek OK. I'm sure your implication is that NTU's lot is better and if that is the case would you please explain why.

 

Cheers! Kelpie

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