The Herald-Dispatch of Huntington, West Virginia, reports that Special Metals has laid off 62 hourly workers there yesterday. Layoffs are also expected at the company's Burnaugh, Kentucky, and Elkhart, Indiana, locations soon. As similar rounds of layoffs occurred earlier this year and in the two preceding years, it would seem that specialty alloy customers are still recovering slowly.

I suspect that high alloying element prices also compound the issue, keeping the base cost of expensive nickel- and cobalt-base alloys prohibitively high. Special Metals' product folder consists primarily of these alloys, often with high concentrations of other expensive metals like chromium and titanium. Nickel is at two-year highs of $13 per pound, which won't ease up the pressure at all, though the market is still a long way from the $24 per pound highs of five years ago.

Chart © Metalprices.com

Fancy electronic toys like the Apple iPad use old metals in new applications these days, such as indium, which is mined primarily in Canada. The only problem with some of these metals is that, while they may not only come from a single source, there tend to be few players and mines in the marketplace. It is thus noteworthy that the Register recently reported that valuable indium and gold have been found in an existing tin mine in Cornwall, UK.

The South Crofty tin mine hopes to produce thousands of tons of the valuable metal, which is used in many electronic devices such as LED screens and touchscreens. This is several years' worth of current global supply. In the Daily Mail, the discovery is being referred to as a modern "gold rush," restoring a long-lost legacy of British indium mining.

It is expected that the mine, owned and operated by Western United Mines, will expand from roughly 60 employees to a few hundred to manage an expected burst in output. Copper and zinc are also expected to show up in the ore. This is certainly an exciting time for English industry and the investment opportunities surrounding this discovery are sure to be interesting as well.

According to The Wall Street Journal, China is stockpiling rare earth metals to maximize their period of dominance over world supply. Who can blame them, right? After enjoying at least a decade of monopoly over the rare earth market, it pays for China to collect extra inventory in the event that upcoming rivals such as California's Molycorp falter.

While there has been no official statement to back this up, rumors and analyses spread like wildfire today after announcements from Chinese Government agencies that new storage facilities have been built in Inner Mongolia capable of holding more than China's entire annual output of rare earth metals and ores. The same agencies manage inventories for many Chinese commodities, so it seems fairly obvious what the intent of building the facilities is.

While China enjoys a position of dominance in the rare earth markets, other countries are stockpiling as well, according to the article. South Korea and Japan have been alerted to their weak inventory positions, putting such rare earth-dependent products as the Toyota Prius at the mercy of Chinese supply. Again, who could blame them? It makes plenty of sense for everybody to shore up their stock of rare earths until global supply chains diversify and stabilize.

In yet another interesting metals move in China, Wired reports that thorium-based nuclear power was announced as a key component of official Chinese energy policy at the Chinese Academy of Sciences conference recently. Thorium is a safer and more readily available radioactive fuel source than uranium, and China is building one new plant which uses metal salts of thorium as an even safer technology. The United States Department of Energy has a working group on thorium-fueled metal salt reactors in its Generation IV nuclear reactor program, but no such plants are scheduled for construction.

The World Nuclear Association explains that thorium is extracted from monazite, the same resource from which mischmetal is created and most rare earth metals are purified. China and the rest of the world have been at odds over their dominance of the rare earth metals markets, including extensive control over world monazite supplies.

Since thorium is overall more efficient then uranium, offering up to forty times the energy per unit mass that uranium offers using the same technology reactors, China is yet again setting themselves up for a potentially large strategic advantage against other countries. It's plausible that they might some day create such an energy surplus with an army of thorium metal salt reactors that they'll be exporting a lot of energy to the world grid. This is one more reason why the United States should continue its development of rare earth metals independence as well as push for development and installation of the latest nuclear fuel technologies.