May 11, 2020 (Financial News Media via COMTEX) -- FN Media Group Presents Oilprice.com Market Commentary
London - May 11, 2020 – While the United States is slowly working towards ending the lockdown and restarting the economy, the federal government is quietly fighting a second war with China over critical metals. One of those critical metals in particular is the extremely rare key to global technological dominance because it's crucial to winning the 5G war–the national security battle of the century. Mentioned in today's commentary includes: Teck Resources Limited /zigman2/quotes/208435438/composite TECK +4.06% , Turquoise Hill Resources Ltd. /zigman2/quotes/208953645/composite TRQ +11.59% , Agnico Eagle Mines Limited /zigman2/quotes/200957337/composite AEM +1.29% , Pretium Resources Inc. /zigman2/quotes/204110925/composite PVG -0.43% , Magna International Inc. /zigman2/quotes/204433886/composite MGA +2.55% .
The metal is cesium (Cs), the most active metal on Earth, and it's so rare that it's hard to even put a price on it. It's also a vital ingredient in our ability to make 5G happen.
Despite this, America has none, and it dropped the ball a long time ago. At the 11th hour, the Trump administration is now bent on reversing the loss of cesium to China, spanning the globe for lower-risk venues with potential reserves. And that desperate search for cesium potentially makes one particular Canadian junior miner–Power Metals (PWM.V,PWRMF.PK)–a highly critical component.
There are only three cesium mines in the world and Power Metals owns three of the five cesium occurrences in the province of Ontario.
In February this year, PowerMetals started drilling for what is hoped to become the only potential cesium mine that China doesn't already control.
"There is a global shortage of this rare metal and we are very lucky to have found it at our 100% owned Case Lake Property with grades as high as 14.7 % Cs2O," PowerMetals Chairman Johnathan More said in a recent press release.
Cesium: The Star of the Critical Minerals Show
Unlike some other commodities, cesium is immune to the demand-decimating effects of the coronavirus pandemic because it is critical to everything from the 5G revolution, healthcare advances and defense to oil and gas drilling–and even time itself.
In healthcare, cesium is a key element in strategic organic chemistry, including in x-ray radiation for cancer treatments, while the oil and gas industry uses it for drilling fluids to prevent blow-outs in high-temperature, high-pressure wells.
But cesium's applications in the 5G war, and in measuring time, make it the stuff of critical metal legend and a valuable weapon in the race for technological dominance. It's the "cesium standard" that allows us to measure time accurately. That means it's the key to mobile networks, the internet, and GPS.
For investors, that means understanding exactly what the 5G war means to the world, and how it will reshape the global balance of power. The new 5G cellular wireless tech will transfer data and the correct time faster than ever before–fast enough and accurately enough to transform industries.
5G technology means that very soon we will be living in a new reality with a continuous, real-time connection for every single device in existence, and everything to come as a result. It will forever change healthcare (think:real-time connection pacemakers among many other things), and it will open up vast opportunities for giant and emerging tech companies across every segment of commerce and industry, not to mention national security applications. But for now, China controls it all.
The Chinese Connection
As suggested by heightened rhetoric coming out of every corner of the political playing field in the United States, the post-COVID-19 environment isn't going to be one of global unity. More than ever, swords are being drawn, both in Beijing and in Washington. There's simply too much at stake, and things are about to go way beyond the Trump administration's earlier battle against Chinese tech giant and 5G star Huawei.
In fact, the pandemic is now threatening a new cold war between the U.S. and China, with Trump accusing Beijing of a COVID cover-up and Beijing is accusing Washington of blackmail. The Trump administration is also moving to cut global industrial supply chains from China and is cooking up new tariffs. But while the US has been desperately warning Europe off Chinese-connected 5G plans, Brussels doesn't seem to be listening in another potential win for Beijing.
Cesium was only added to the United States list of critical minerals in 2018 despite the fact that it will be a factor in the 5G revolution, a revolution that will generate trillions of dollars in new products along the way.
Despite the fact that it is so strategic, there are only three pegmatite mines in the world that can produce cesium: Tanco in Manitoba, Bitika in Zimbabwe, and Sinclair in Australia. Two of them, Tanco and Bitika, are no longer producing, and the stockpiles at Tanco and Sinclair are largely controlled by China. Not only is there limited supply, but there are a very limited number of companies in the supply chain itself.
That positions Power Metals to potentially be a major North American supplier of cesium, possibly right at the crucial moment in the 5G revolution. Known for its major hard rock lithium deposit in Canada, Power Metals hopes to very soon be known as the company that broke China's monopoly on the critical cesium metal.
Power Metals is sitting on what could become only the fourth deposit of its kind in the world. The company discovered the pegmatites at West Joe Dyke in August 2018, intersecting high-grade cesium mineralization in six drill holes when it was targeting lithium instead.
The 2018 drill program intersected high grade cesium mineralization in six drill holes at West Joe: PWM-18-111, 112, 116, 123, 124 and 126 with up to 14.70 % Cs2O over 1.0 m in drill hole PWM-18-126.
In February, right before the COVID-19 outbreak turned into a pandemic, Power Metals started drilling, and it's world-class geologist, Dr. Julie Selway, says the three properties the company is drilling are hoped to have similar finds to the strategically important Sinclair mine in Australia.
Power Metals has intersected cesium (Cs) mineralization in 6 drill holes on West Joe Dyke, with "exceptionally high-grade" Li and Ta intervals. They also found Cs mineralization in drill core samples in the first new dyke below Main Dyke, as well as in the drill core in Northeast Dyke. Now, they're working to expose, sample and assay that cesium mineralization on the surface outcrops to find more cesium-bearing pegmatite dykes nearby.
When and if that happens, North America could finally get a leg up in the war for a key component in the global technological dominance that will define this century, and a single junior minor will have helped that happen.
While cesium very well may be the most exciting metal at the center of this revitalized resource face-off, other metals are just as important.
Germanium, Indium, Rhenium, And Molybdenum
With the battery revolution reaching a critical level, some lesser-known metals, and the companies that produce them, may be flying under some investors' radars. Take Teck Resources, and Turquoise Hill Resources, for example.