The development of Great Western Minerals Group Ltd.'s (GWMG) rare earth elements mine in northern Saskatchewan is critical to the well-being of the North American economy, says a leading industry expert.
Jack Lifton, a Michigan-based consultant on minor and rare earth metals, believes a significant portion of the North American economy will be negatively affected if GWMG cannot get its Hoidas Lake project into production by 2012. By that year experts predict China, which produces 97 per cent of the world's rare earths, will have a domestic need for the materials, used in everything from designer alloys to medical imaging to iPods, that matches its production capabilities. That means the Asian country will no longer be able to export rare earths, leaving North American users without a supply unless a new one, such as GWMG's project, is developed.
"We're trying to educate North Americans to the fact that unless we have these raw materials here, we're simply not going to be able to make some of these things and when we don't make them, kids don't go to school to learn how to do it, they don't do research, innovation goes away, development goes away and the whole economy is lowered in value," Lifton explained.
The consultant, who was in Saskatoon Tuesday speaking at the company's annual general meeting, is encouraging banks to finance the development of the Hoidas Lake mine. GWMG, he said, is the closest to production of any rare earth company in the world, but it needs more financial backing.
"I'm telling financial institutions please invest in this company because its good for the whole continent, it's not just some domestic industry employing 100 people, it's going to impact industries employing millions of people," said Lifton.
"Unless Great Western (Minerals Group) is in production by 2011, then the car companies in the United States have given away any chance they have of making hybrid cars en masse."
The Saskatoon-based company is beginning to feel the pressure for Hoidas' development from the end users of rare earths, such as vehicle and defence items manufacturers. A Toyota Prius, for example, said GWMG president and CEO Jim Engdahl, uses 20 pounds of rare earths in its battery.
"As the public becomes aware of the critical nature of rare earth elements . . . we're going to find we will get some pressure on us. The end users are calling us regularly; we're getting a lot of pressure from the end users such as the Toyotas of the world," Engdahl says.
The company is actively moving forward with its plan to develop the property, he said. A transportation study on moving material from the isolated site to roads and/or railways is underway, a summer drilling program is set to start at Hoidas Lake this month and 12 months from now, the company hopes a feasibility study on production at the lake will be complete.
When work to acquire a U.K.-based rare earth manufacturer, Less Common Metals Ltd., is completed this month, Engdahl says GWMG's annual revenue will move to $20 million from $1.5 million in one year. The money will help the company advance its projects in the long term, he said.
"I guess what we've been referred to is (that we're) like a duck, you can see that you're moving a little bit but all the action is all happening where you can't see it. We've had a tremendous amount of activity happening in all areas," he said.
Because there is no substitute for rare earths, the success of GWMG's Hoidas Lake mine is incredibly critical, Lifton reiterated.
"There's been a boom in minor metals because what's happened is demand has been added. Russians, Indians, Chinese and Brazilians want (electronics)," Lifton said. "You can't make them without minor metals."
Source: The Star Phoenix, Saskatoon
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