Peak Resources will soon release a revised JORC Resource for its Ngualla Rare Earth Project in Tanzania and has been granted a trading halt.

Ngualla currently boasts the fifth largest rare earth resource, and the highest grade of the seven largest deposits outside of China.

At present, the project hosts a resource of 170 million tonnes at 2.24% REO. The total resource includes a higher grade, near surface zone of 40 million tonnes at 4.07% REO for 1.6 million tonnes of contained REO.

The halt will last until the earlier of an announcement being made to the market, or the opening of trade on Thursday 4th April 2013.


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According to the annual report of Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-tech (hereinafter referred to as Baotou Steel Rare-Earth), the company’s profits declined nearly 57% YoY to RMB 1.51 billion in 2012, due largely to shrinking demand from slowing economy. The company lowered its sales target for this year by as much as nearly 20% out of growing pessimism over outlook for rare earth.     

Baotou Steel Rare-Earth reported RMB 9.24 billion in operating revenues last year, down 19.83%, and RMB 1.51 billion in net profits, also down 56.58%. Earnings per share were a mere RMB 0.624, markedly down from RMB 1.436 in 2011.  

The company explained that rare earth market was depressing throughout 2012, accompanied by falling prices. Sales of rare earth metals slumped due to poor orders from magnetic material producers, resulting in a 47.18% decline in the company’s operating revenues in this segment.  

The rare earth market has shown no signs of turning around. Prices for rare earth products slid 35% YoY in early 2013. Plagued by sluggish rare earth markets, Baotou Steel Rare-Earth, a leading rare earth producer, has set itself a target of achieving RMB 7.5 billion in sales revenues in 2013, down 18.85% from last year’s RMB 9.24 billon.  

The company says it will step up integration and restructuring of rare earth industry in Inner Mongolia. Besides, it will vigorously push ahead with alliance of producers in Gansu, Sichuan and Shandong to pave way for its establishment of China North Rare Earth Group.


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Baotou Steel Rare-Earth (Group) Hi-Tech, the country's largest rare earth producer, announced in its financial results that it saw a sharp drop in its net profit and revenue in 2012 due to withering demand and a slowing economy.

The company's net profit declined 56 percent to 1.51 billion yuan ($240 million) last year compared with 2011.

Its revenue fell 19 percent to 9.24 billion yuan as a result of continuous low demand in the rare earth market and a drop in rare earth prices .

From raw material to functional products, the revenue has been down significantly, the company said.

The current price for primary rare earth products is 35 percent lower than in 2012. The company plans to reach revenue of 7.5 billion yuan in 2013.

Baotou Steel resumed production on Feb 23 after a four-month halt in production affected by the price slump.

Another major rare earth producer, China Minmetals Rare Earth Co Ltd, announced on March 26 its revenue was down 47 percent from 7.6 billion yuan in 2011 and its net profit has dropped 74 percent from 1.02 billion yuan in 2011.

Rare earths, which comprise 17 metallic elements, are used in many important technological products including missile systems and hybrid cars.

Export trade value has been on the decline as well. According to statistics from Baotou Customs, despite exports of rare earth increasing 3.3 percent to 3,021 metric tons in 2012, rare earth prices are down 76 percent to $26,000 per ton.


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China's rare earth exports soared in February. According to China Customs, China exported 1,106 mt of rare earth in February, up 289.12% YoY. Market players believe that does not mean overseas demand improves.

After rare earth prices climbed to a high in August 2011, China's rare earth exports had been falling for several consecutive months. China's rare earth exports in 2012 were below 2011 levels, and nearly half of export quotas was vacant. Rare earth exports account for 1/3 of domestic rare earth output, and shrinking overseas demand will negatively affect the rare earth market. But rare earth exports tripled in February after rare earth prices rose to early 2011 levels. Is that because overseas demand improves?

But Gao Yuxin, a rare earth analyst from Ruidow, reported demand for rare earth was still sluggish, and transactions were muted.

                  

Shanghai Heli Rare Earth Material Company engages in rare earth import and export business. According to Manager Yuan, the export data does not mean real demand grows, and rare earth international trade is still sluggish. Most China's rare earth exports were made to Japan. According to a professor from Hirosaki University, Japan reduced rare earth imports two years ago due to high prices, and produced with raw material inventories. There were also large amounts of rare earth smuggled into Japan, with prices very low, which is excluded in regular statistics.

Domestic market was also sluggish. Some rare earth users now began to purchase rare earth but modestly with existing prices.

Demand for rare earth was sluggish due mainly to China's weak rare earth downstream user industries. Half of rare earth is used in new materials, while only Zhongke Sanhuan, Advanced Technology & Materials Company and Ningbo Yunsheng produce rare earth permanent magnetic product. Many China's rare earth permanent magnetic product producers posted losses in 2012. Once overseas market weakened, rare earth industry will be impacted.

Demand for rare earth is now extremely weak. One rare earth trader said they only hope rare earth prices do not fall further. Neodymium oxide prices have fallen from RMB 1.4 million/mt in August 2011, to RMB 400,000/mt in March.


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