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Market: TSX-V
Sector: General Mining
Epic: CCE
News: Latest news
Web Site: Commerce Resources
Other Articles: 18-02-201021-12-200930-11-2009

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Wednesday March 17, 09:01SmartFocus, Amphion Innovations and National Milk Records confirmed for March 18 Forum

The presentations will start at 6:00pm and finish at approx 7:30pm. After the presentations are complete the directors will also be available to take questions during a free canapé and wine reception.

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Wednesday March 17, 09:25Wise-Owl puts speculative buy on Magma Metals

In the "Small-Cap Spotlight", as featured in the Australian, by Wise-Owl.com’s Tim Morris, runs the ruler over Magma Metals.

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Monday March 15, 09:01China's growth boosting commodity prices

The latest economic figures from China have put pressure on the dollar and boosted a number of high-yielding currencies, including the Australian dollar and the South African rand.

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Commerce Resources

Commerce Resources

Commerce Resources Corp. is an exploration and development company with a particular focus on tantalum, niobium and rare metal deposits with a potential for economic grades and large tonnages. The Company is specifically focused on the development of its Upper Fir tantalum and niobium deposit in British Columbia, Canada. Commerce is well positioned with sufficient capital to advance the commercialization of a prospectively lucrative mining operation for tantalum and niobium.

Commerce Resources is also focused on the exploration of its new deposit the Eldor carbonatite in Quebec, which is highly prospective for niobium, tantalum and uranium.

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Thursday, July 16, 2009

Race for Rare Metals – And China Is Winning!

by Sam Kiri company news image

The recent G8 Summit in Italy ended with one important concluding note. As President Barack Obama summarised, “For us to think we can somehow deal with some of these global challenges in the absence of major powers like China, India and Brazil seems to me wrongheaded.” A well-timed thought as it is clear that the role played by these nations in the world economy is gaining prominence.
 
In the resource sector, China has already made its mark not only as one of the largest consumers but also as one of the largest accumulators of commodities. Chinese policy makers have ushered in an environment in which state enterprises, as well as private companies, are seeking to secure resource supplies around the world. It was against this backdrop that China Investment Corporation (CIC), a Sovereign Wealth Fund, acquired some 17% of Teck Cominco.

Copper is not the only metal China seeks to control and Teck is not the only acquisition China has made in the resource sector. In what could be a further indication of China’s tightening grip on the supply side, the China Non-Ferrous Metals Mining (Group) Co., Ltd. (CNMC) recently acquired controlling interest in the Australian rare earth project developer Lynas Corporation Ltd. (Lynas). The full transaction, comprising a combination of equity, debt and loan guarantees, is valued at US$366 million and provides a glimpse of what rare metal companies are really worth.

Interestingly, CNMC is not the only government sponsored rare metals investment company. The Jiangsu Eastern China Non-Ferrous Metals Investment Holding Co. Ltd. (JIH), a unit of East China Exploration & Development Bureau, agreed to acquire a 25% stake in Arafura Resources Ltd., a gold and mineral mining company, for A$24 million, in February 2009.  Arafura has a rare earth and phosphate deposit in its Nolans project.

Against this backdrop, one has to draw the attention to the ownership structure of these acquisitions and investments. Both CNMC and JIH are owned by the Chinese government and are established to ensure that China has interests in nonferrous metals both at home and abroad.
 
These investments clearly indicate that China is aggressively securing rare metal deposits around the world. Given China’s massive consumption of rare metals, their desire to secure supply sources makes sense. The concern however is their continued acquisition would enable them to control both supply and prices thus leaving the rest of the world at their mercy!

According to the EU, for several years China has applied export restrictions (quotas and export duties) to key raw materials of which China is the leading extractor and exporter.  Such restrictions naturally distort competition and increase global prices as some of these resources cannot be found elsewhere. While the recent complaint has only been on coke, bauxite, fluorspar, magnesium, manganese, silicon metal, silicon carbide, yellow phosphorus and zinc, this development provides a foretaste of future developments in other metal markets as well.

In addition to the traditional rare earth metals, other strategic metals such as tantalum are now assuming increasing importance.  Tantalum is primarily used in the production of electronics capacitors which find their way into cell phones, DVD players, personal computers, digital cameras, gaming platforms, LCD monitors and wireless devices. It is currently produced by only a handful of suppliers. As China tightens its grip over rare metals with foreign asset purchases and export restrictions, the investment case for tantalum companies is also expected to gain recognition.
Given these developments, it is worthwhile highlighting Canadian Venture and Frankfurt listed Commerce Resources Corp. (TSX.V: CCE, Frankfurt: D7H) which is one of the most active tantalum explorers. A significant exploration and development programme is currently underway at the Upper Fir deposit of its Blue River Tantalum/Niobium Project.  The company’s competitive advantage lies in the fact that its projects are located in Canada, an area with low political and currency risk as compared to other world supplies.


 
The Upper Fir deposit has approximately 14 million tonnes of indicated and 19 million tonnes inferred resources. The project is expected to have a long-term mine life of over 20 years and due to being in carbonatite host rock could potentially be one of the lowest cost producers. Its proximity to the US makes it even more attractive.

We have highlighted on many occasions the power shift to China in the resource sector and the growing need for other industrial nations to seek alternative supply sources for themselves. Once supply sources are firmly secured, China will be able to determine both material prices and their export destinations. The fact that most of these investments are by state-funded entities such as CNMC makes the situation particularly precarious. At the far end of the pessimism, it will be a situation similar to oil supplies which are controlled by a handful of countries.  The race has begun to secure supplies of rare metals.  Investors should be positioning themselves at the starting line and taking a look at companies with proven deposits such as CCE.

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