Not so rare earths: A quarterly (and yearly) perspective

Geologically speaking, rare earth elements aren’t really rare at all. 

The US Geological Survey places rare earth elements (REEs) in the same order of magnitude as common metals like copper and zinc. Yet rare earths are not as scarce as metals such as platinum or gold.

They are a group of 17 elements growing in importance given their strategic applications and unique catalytic, metallurgical, nuclear, electrical, magnetic, and luminescent properties. REEs are used in everything spanning lasers and military equipment to being key components in electric vehicles, batteries, and other electrical appliances crucial to achieving net zero carbon emissions.

The market overall bottomed out in mid-2023 having rocketed in 2022 when prices hit their highest in a decade. Last year, prices declined after China increased production and a slower-than-expected upturn in its economy led to uncertainty around its eventual recovery.

This has been an important characteristic of the market. China dominates the supply chain, accounting for some 70% of global ore extraction and 90% of ore processing. In December 2023, China announced a ban on the exports of technologies to make REE magnets.

In January this year, mining executives and industry sources polled by Mining.com.au agreed while China prohibiting the exports of its industry knowledge is nothing to be concerned about, questions remain on where domestic rare earths production and downstream processing opportunities will originate.

On the back of its ban, the federal government announced it will inject $22 million into several research projects to find alternative solutions and develop REE projects.  

Such is the importance of rare earths, the government will also back Arafura (ASX:ARU) to further develop its Nolans Project – a rare earth mine 125km north of Alice Springs – with an $840 million loans and grants package.

Market magnet

Throughout 2023, a climate of rising supply and diminishing demand translated into lower prices overall, which has since flowed into Q1 2024.

Decreasing demand from two of the biggest downstream applications for rare earths — EVs and wind turbines — amid inflationary pressures and weakening global consumer confidence also lowered demand for smartphones and other appliances requiring rare earths.

As such, downstream users became hesitant to undertake restocking purchases, adding futher pressure on prices for magnet rare earths — neodymium, dysprosium, terbium, and praseodymium.

This lower demand for EVs in 2023 had a negative effect on demand growth for magnets in which there was a supply overshoot across the EV supply chain. Market analysts however, forecast that EV sales penetration is due to increase by 2030.

The market began to rebound in late August through mid-September 2023, coinciding with a temporary production halt in Myanmar. In early November, the Chinese Ministry of Commerce announced the tightening of rare earths export controls and the market found itself in a lower price environment.

Analysts now forecast the growing supply surplus that characterised last year is likely to be more or less cleared by the end of 2024, closing the once widening supply-demand chasm.

Of all the rare earths, REE magnets are key for EVs and the broader decarbonisation markets. They are also widely utilised in the defence and military sectors. The super-magnet suite of rare earths comprises neodymium, praseodymium, dysprosium, terbium, and samarium.

Some analysts suggest prices are poised to rise later 2024 in line with a projected upswing change in demand for EVs and wind power while China pulls back expanding output quotas.

Considering the price in China of praseodymium oxide – one of the most widely used rare earth elements – fell 34% in 2023, while terbium and neodymium oxide also had a horrid run, suggestions of a higher price environment would be a welcomed one.

Rare earths, common sentiment

When OD6 Metals (ASX:OD6) Managing Director and Chief Executive Officer (CEO) Brett Hazelden spoke to this news service in January, Australia’s need to develop more of its own technologies and not stay middle of the road was a key point raised.

“The question really is where is all the supply going to come from and where will it be processed to a final product? Currently China controls and manipulates the rare earth market which is also why we are seeing China taking over the EV car market and controlling supply.

Will the new supply come from mines in other countries backed by China processing technology and money or Western countries like Australia and the US using newly developed technology and downstream factories? Maybe the answer is who can produce the most cost effective EV.”

ABx Group (ASX:ABX) CEO Dr Mark Cooksey also believes Australia is in strong position to cater for the world’s needs. And much of that has to do with clay-hosted REE deposits, of which ABx has within its portfolio.

“Particularly in the case of the clays, I think it’s feasible that they could be producing in the next 3, 4, or 5 years. The hard rock ones tend to have a longer timeframe, but there’s some projects that are already more advanced.”

Price pain easing?

So where are rare earth prices currently?

Strategic Metals Invest lists the recent per kilogram prices of 9 strategic metals, as well as their price movements up until 28 March 2024. These include dysprosium, neodymium, praseodymium, and terbium, as well as in-demand technology metals gallium, germanium, hafnium, indium, and rhenium.

Strategic Metals Invest is a sales and marketing partner of Tradium, which was founded in 1999 in Germany and is today a global dealer for technology metals and rare earth elements. 

The global rare earths dealer prices dysprosium at about $406 per kilogram, which year-to-date (YTD) is down almost 32% but since January 2020 is trading 17.57% higher.

The price of neodymium is almost $89/kg, also down YTD by 21.64% but since January 2020 is 36.46% higher.

Praseodymium is about $92, which is a 26.29% increase since January 2020 but YTD it has slipped 18.53%.

Terbium is $1,448, which is more than 34% down YTD but since January 2020 it has rocketed almost 117%.

For technology metals the current price of gallium is slightly higher so far this year and at about $787/kg is 164.05% higher than in January 2020. Germanium is about $2,901, which is a 41.84% increase since the start of 2020, while indium is $571, just over 81% higher than January that same year.

Forecast for 2024

Looking ahead, while some analysts believe there does not seem to be many market-shaking catalysts on the horizon there are some factors poised to have an effect on the industry.

Market analysts will be monitoring the stability of supply from Myanmar to maintain a balance for heavy rare earths such as dysprosium, a common component in EVs and wind turbines. Myanmar is one of the world’s 2 largest sources of heavy rare earths (the other is China) and both continue to play an important role given the significance of heavy REEs in green technologies.

Australia’s ongoing support in advancing domestic mining projects through aforementioned funding and tax incentives, and similar incentives offered by the US as it continues to offer to develop its rare earths value chain through the Inflation Reduction Act, are contributing positive factors analysts continue to monitor.

Federal Resources Minister Madeleine King said the Australian government is investing in the Arafura project to ensure the country can capitalise on its vast deposits of rare minerals.

The Nolans Project is on track to become Australia’s first combined rare earths mine and refinery that will help secure Australia’s position as a renewable energy ‘superpower’.

Yet there are plenty more in Australia that will need to come online.

For example, OD6 Metals recently raised capital to progress its Splinter Rock Rare Earth Project in Western Australia towards development, including an infill drilling program at the Inside Centre prospect, as well as extensional drilling targeting Mineral Resource Estimate (MRE) growth.

Managing Director Brett Hazelden says the project has the potential to be a ‘world-class’ asset.

Drilling and geological analysis at its flagship Splinter Rock has shown widespread, thick, high-grade clay hosted REE deposits that extend over hundreds of square kilometres. Metallurgical testing using hydrochloric acid to leach the rare earths have resulted in positive REE recoveries with optimisation ongoing.

The company aims to delineate and define economic resources and reserves of REEs, in particular neodymium, praseodymium, dysprosium, and terbium, which can be developed into a future revenue generating mine.

“Our exploration results at Rubble Mount are outstanding and expand the Rubble Mound high-grade zone more than expected. ABx’s distinctively high proportion of dysprosium and terbium with high extraction rates under relatively neutral conditions is rare

ABx is another ASX-listed mining company advancing a significant REEs project. The company expects to update the Rubble Mound project’s resource in April 2024, after receiving more ‘high-grade’ rare earths results from the latest drill program. 

CEO Dr Mark Cooksey says the company is tapping the experience and knowhow of its team to find and develop a unique Tasmanian type of rare earth resource. It is aiming to develop a low-cost method of extracting rare earths, while also improving the land.

He says the sustainable production from Tasmania can ease the global shortage of these critically important rare earths and show the world that it can be done to a high standard.

“Our exploration results at Rubble Mount are outstanding and expand the Rubble Mound high-grade zone more than expected. ABx’s distinctively high proportion of dysprosium and terbium with high extraction rates under relatively neutral conditions is rare.”

Write to Adam Orlando at Mining.com.au

Images: OD6 & ABx
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Written By Adam Orlando
Mining.com.au Editor-in-Chief Adam Orlando has more than 20 years’ experience in the media having held senior roles at various publications, including as Asia-Pacific Sector Head (Mining) at global newswire Acuris (formerly Mergermarket). Orlando has worked in newsrooms around the world including Hong Kong, Singapore, London, and Sydney.