The full article can be found at the MMTA webpage below.
Rare Earth Pricing Issues
Benchmark Minerals presented on the current rare earth pricing structure, noting that prices, such as those for neodymium-praseodymium (Nd-Pr) oxide, have fallen significantly, dropping by more than 50% over the past year. Despite this, there is concern that these prices are below the level needed to cover the cost of capital for most producers, signaling a potential economic mismatch.
Supply Curve and Market Conditions
The supply curve presented by Benchmark shows that most current rare earth projects operate under low costs, particularly in China. However, higher-cost emerging mining projects, mainly outside China, face significant challenges in maintaining competitiveness. Optimism remains for these projects due to growing demand for magnet metals, though CPM Group predicts EV production may not meet current forecasts.
Gallium Market Dynamics
Gallium is another key metal, with Chinese production capacity far exceeding current demand. However, rapid growth in applications, such as its use in neodymium-iron-boron magnets, is expected to drive future demand. Despite this, supply-side growth is expected to continue, maintaining a supply surplus.
Future Outlook for Rare Earth Supply
The future supply curve will largely depend on expansion plans by Chinese rare earth producers. If low-cost producers continue to invest, higher-cost emerging projects may struggle to compete. There is also the question of whether Chinese producers will maintain investment levels in the face of economic losses, as rare earths remain a strategic industry for China.
Technological Advances and Heavy Rare Earths
China’s reliance on external sources for heavy rare earths (HREEs), like those from Burma, presents supply risks. However, technological advancements, such as Neo Performance Materials’ development of magnets that reduce or eliminate the need for dysprosium and terbium (Dy and Tb), may lessen future demand for these metals.
Challenges for Emerging Rare Earth Miners
Emerging miners face the challenge of cost competitiveness in a market dominated by low-cost Chinese producers. Amanda Lacaze, CEO of Lynas Rare Earths, emphasized that the key to project viability is minimizing production costs, especially as technological changes may reduce demand for certain rare earth elements.
Learn More About CPM Group’s Tantalum, Niobium and other Rare Earth Research.
