Toyota May begin to Alter the Course of Rare Earth Metals and make Magnesium a Metal of the Future

Not too long ago, Toyota (NYSE:TM) was the trendsetter with green technology in the car industry with the introduction of the Prius. One could not even lease the car at first, demand was so high that one could only buy it. The car was new, contemporary and touted as green. It was a hybrid of a gas and electric motor. The Prius is still around but other car companies have begun to add hybrid and even electric vehicles to their product line. The Nissan (OTC:NSANY) Leaf, the Chevy (NYSE:GM) Volt, Honda (NYSE:HMC) Insight are all examples. On thing they all have in common is in make up of their batteries. All use rare earth elements. Most use lithium ion batteries.

 

Rare earth metal production and abundance is primarily in China, with few deposits in Canada, South Africa, Russia and Australia. Given China’s internal consumption and high export quotas, as well as international relations with countries like Japan and South Korea, the rare earth pipeline is short and tightly controlled.   Lithium’s story is a little different. It is found mostly in South America but has been declared a strategic metal in Chile. Science has progressed from a nickel-metal hydride battery to a lithium ion battery. Now, Toyota is exploring a magnesium sulfur battery. This new battery could theoretically double the watt hours of the existing technology.

 

With this new technology, magnesium becomes a focus. The estimated world economic resources of magnesite are about 8600 million tonnes of MgCO3 with China having the most followed by the Russia and North Korea. Granted, this brings back a China issue and I can’t imagine North Korea being open. There are few to no mining companies that deal exclusively with magnesium or magnesite. BHP Billiton (NYSE:BHP/NYSE:BBL), due to its size, has magnesium as a byproduct (possibly even as a deleterious element). On the complete opposite side, the Australian micro-cap companies MIL Resources, Ltd. (AU:MGK) and Advanced Magnesium Ltd. (AU:ANM) have magnesium assets MIL Resources has a 100% ownership of magnesite resources near Leigh Creek, South Australia. In 1998, Advanced Magnesium Ltd. (operating under the name Queensland Metals Corporation Limited) mined 2.44 million tonnes to produce 345,000 tonnes of beneficiated magnesite.

 

While Toyota is in the early research and development stage of new magnesium sulfur batteries, it does bring other minerals/metals into the investing fold.