Wednesday, 6 June 2012

Quantum Rare Earth's Dickie outlines "rosy" future of niobium

Quantum Rare Earth Developments (CVE:QRE) CEO Peter Dickie recently discussed the company’s new resource estimate and the demand for niobium in the Global Listings Exchange (GLX) Capitol Hill Report.

The junior explorer is focused on seeking out potentially economic deposits of rare earth elements in North America and elsewhere in the world.

GLX is a social finance portal to the world's capital markets.

Quantum released a brand-new resource estimate for its Elk Creek, Nebraska niobium project in April, and Dickie said the new report added a higher grade indicated resource of 19.3 million tonnes grading 0.67% niobium (Nb2O5), containing in excess of 129 million kilograms of Nb2O5.

Meanwhile, Dickie said the company has an inferred resource of 83.3 million tonnes "at a slightly lower grade of 0.63% niobium, but that contains well over half a billion kilograms of niobium."

"To put this in perspective, from a development point of view there [are] essentially only three primary niobium projects in development in the world right now," said Dickie.

"Ours is the only one in the United States...and it [Nb2O5] is a 100 per cent imported commodity."

Dickie pointed out that Nb2O5 is primarily used as a steel hardener.

"As such, it does have some competing metals such as vanadium or molybdenum, vanadium being the closest competitor," he noted.

"However the properties of the steel produced using niobium generate some unique uses. Oil and gas high pressure pipelines are a perfect example of the necessity of niobium moving forward in the economy."

Dickie said that Nb2O5 is the only additive that can be used with steel to produce high pressure, high strength gas and oil pipelines.

In addition, high strength niobium-based alloy steel is stronger, yet lighter steel.
"Therefore, you can use niobium-hardened steel to produce an automobile, with, as an example, using as little as $9 or $10 worth of niobium, which will produce a 5 or 10 per cent savings in your vehicle because of the weight reduction," Dickie said.

Quantum's CEO went on to discuss the importance of niobium in the aerospace industry.

"You can’t build a jet thruster without significant amounts of niobium," he said. Dickie noted that Nb2O5 is essential for high-strength, low-alloy steels in products which are expected to remain in high demand.

"Future niobium demand looks very rosy. Currently, only about 10 percent of world steel contains niobium, [and] that's estimated to grow to approximately 20 per cent over the next decade."

This includes increased intensity usage in countries such as China, who also import 100 per cent of their niobium, where stricter building codes are now being implemented which will result in increased demand for high strength steel.
               
"With enormous infrastructure programs being planned over the next decade in order to kick-start the economy, both in Europe and North America, there’s massive demand for high strength, low alloy steel of which niobium’s a key," said Dickie.

"There is also massive demand to increase fuel economy in vehicles, and perhaps more importantly, from a local perspective, there are plans under development to increase or replace a lot of the pipeline infrastructure to minimize potential leaks for oil and gas pipelines and niobium is a critical element to building that pipeline that can’t be replaced."

Looking ahead, Dickie said that Quantum is "carrying forward right now" with its new resource estimate, and said the company is confident with the size of the resource.

"At the moment we are processing the metallurgy end of things which is actual extraction of the mineral from the rock.

That’s a process that takes several months, but it is ongoing," he said.

"We are also in fairly in-depth discussions with potential partners who are either the mining industry or the user industry, and these are the kinds of companies that will bring along the capital required to put this [mine] into production."

Dickie highlighted the fact that very recently, to the benefit of Quantum, Canada's House of Commons’ Natural Resources Committee passed the National Strategic and Critical Minerals Act, designed to speed up the permitting process for rare earth, critical metal and strategic metal mines.

Quantum acquired the Elk Creek site, a former Molycorp, Inc. (NYSE:MCP) project, in 2010.

According to the company, the U.S. Geological Survey has termed Elk Creek "potentially one of the largest sources of rare earth elements and niobium".

Quantum said the U.S. government has determined that rare earth elements and certain rare metals, such as niobium, are a strategic security requirement.

The full interview is available at http://www.youtube.com/watch?v=Rg6CsSvqAdQ&feature=youtube

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