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New trends in the market of rare earth metals 07/16/12

At the time, while looks of investors have turned to gold and silver, very few people paid attention to what is happening with the prices of rare earth metals. Level of their application is an indicator of scientific and technical development of this or that branch, promotes economy of mineral raw materials, improvement of an ecological situation, ensuring national security. These elements are irreplaceable in many consumer products. It is clear that the rare earths have investment advantages.

World demand for rare-earth production the last 20 years develops on an increasing trend. In the report of the London research and advisory company VM Group it is reported that cerium, a lanthanum and neodymium practically doubled in the price in March, 2011 in comparison with the similar period of 2010.

The pace of this growth can be illustrated in the chart Rare earths aren't quoted at commodity exchanges therefore the prices for them are regulated by long-term contracts between suppliers and consumers. If to be guided by the regular reporting of the largest mining companies, such as Lynas Corp, the prices for a lanthanum within these two weeks of February 2011 grew from $73 for kg to $92,1/kg (rate of a gain of 26 %); on cerium – with $74/kg to $95,1/kg (34 %); on the Nd – with $31,50/kg to $156/kg (395 %).

The absolute increase in the price of "heavy" rare earths has been even more impressive. According to data of the Australian finance company ResourceCapitalResearch, the last 12 months prior to the middle of February, 2011 the rise in prices for cerium made 1611 %, on a samarium of 1256 % and for a lanthanum of 1227 %. In February 2011 the average export price of one ton of rare earth metals for the first time exceeded $ 100,000.

If forecasts of analysts are realistic, it is very probable that the prices for rare-earth metals will grow and further. But if the supply and demand ratio in the market of cerium is estimated as close to balanced, at least, till 2015, on yttrium, a dysprosium, neodymium and even to a lanthanum during this period demand will essentially exceed the offer.

It is known that China supervised until recently 97 % of world production of rare-earth metals. Currently, there is another trend. It consists in a peculiar boom of projects of investigation of fields and their industrial development worldwide. Africa, Australia and Canada are likely to play a key role in the geopolitical battle with China over control of resources of rare earth metals.

Australia is the important player both in the market of rare lands, and in the market of projects of opening and operation of new fields. Currently, 34 companies in Australia are included in listings of stock exchanges, carry out rare-earth projects at various stages of development. A number of rare earth projects implemented by Australian companies in Malawi, Mozambique, Mauritania and Greenland, as well as in certain other countries. As an example it is possible to give expansion of operating Mount Weld mine in Australia, belonging to the Lynas Corp company, and development of its rare-earth projects in South East Asia. According to the Lynas Malaysia News the company is building a plant for the refining of rare earths in the east of Malaysia, where she plans to recycle rare earth materials produced at the field Mount Weld.

The current geological reconnaissance expansion of rare-earth ore outside of China over the next decade will certainly result in the discovery and introduction into production of a sufficiently large number of fields. As a consequence, the Chinese share of the supply range of rare earth elements on the world market will be significantly reduced.

But for this purpose be required further rise in prices for these metals аnd also considerable investments into scientific researches or acquisitions of modern high technologies of extraction of metals from ore raw materials. At least the current level of prices for rare earths, as well as prospects for further improvement related projects are doing quite competitive with the project of gold and silver. At least the current level of prices for rare earths, as well as prospects for further improvement related projects are doing quite competitive with the project of gold and silver.


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