Lynas Corporation Ltd expects demand for its rare earths products to grow over the medium term after beginning production of its first separated rare earths products in Kuantan in the March quarter.

The Lynas Advanced Materials Plant (LAMP) in Malaysia has now produced a full suite of rare earths products and is ramping up towards a capacity of 11,000 tonnes a year by the end of the second quarter of 2013, Lynas said in a statement.

The Federal Court of Malaysia last month backed earlier lower-court decisions that dismissed a challenge by environmentalists opposing the company's rare earths refinery in Kuantan.

In its March quarter report, Lynas reiterated its production guidance and said it had appointed Eric Noyrez as chief executive officer at the end of last month.

The company said prices fell 13 per cent compared with the previous quarter, achieving an average Mount Weld basket price of US$37.22 per kg in the first quarter.

At the end of the quarter, 15,593 dry tonnes of concentrate containing 5,540 tonnes of rare earths oxides (REO) were bagged ready for export.

"Lynas has projected rare earths demand to grow at above-GDP rates over the medium term, driven by increases in demand from key sectors such as rare earths permanent magnets, autocatalysts and fluid cracking catalysts," Lynas said.

These three markets are expected to account for around half of global rare earths demand by 2015.

Total costs for projects remain unchanged for the quarter.

By the end of the decade, Lynas predicts supply shortages in some rare earths element markets such as Neodymium/Praesodymium and Lanthanum.

Total staff at the Malaysian site fell to 1,515 at end March, down from 2,300 in mid-December 2012 as the project nears completion.


Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

The global rare earth industry is experiencing rare earth prices deterioration which has exacerbated declines in revenues, earnings and share prices of junior minors. Molycorp (MCP), with its heavy concentration of light rare earths ("LREE"), experienced price declines of 30% quarter-over-quarter. The price deterioration does not seem to be abating anytime soon. According to the Motley Fool, it's a wonder that some junior minors are even still in business:

The price of common rare-earth minerals has been dropping since 2011, the year rare earth prices peaked, which is why revenue is slipping. It's a wonder at this point that miners without production, like Rare Element Resources (REE) and Avalon Rare Metals (AVL), are still in business at all. If Molycorp can't make money now that it's in full production, then how could there be enough demand to support all of these companies?

And with new developments such as the vast rare earth oxides found in the Pacific seaboard by Japan last week and in Jamaican mud in January, the supply/demand dynamics may drive prices lower in the future.

Here is an update of junior minors' trading multiples since our last comparable rare earth industry analysis, which includes Molycorp, Lynas Corporation (LYSDY.PK), Avalon, Rare Element, Arafura Resources (ARAFF.PK), Quest Rare Metals (QRM), Great Western Minerals (GWMGF.PK), Montero Mining & Exploration (MXTRF.OB), Frontier Rare Earths (FREFF.PK), Tasman (TAS), Ucore ( ) Hudson Resources (HUDRF.PK), and Matamec Explorations (MHREF.OB).
 

Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

The utilization rate of China's rare earth export quotas fell from 52.01% in 2011, to 48.75% in 2012 due to sluggish demand.

As rare earth supplying countries increased, rare earth prices should fall slightly further this year.

According to an analyst Chen Jiazuo, China's rare earth prices will generally fall throughout 2013.

Investments in rare earth grew as China is attempting to gain more negotiating power over pricing, which caused prices to fluctuate.

China's domestic consumption grew 7% MoM.

China has executed export quotas for rare earth since 2006, and prices had been rising. But the global financial crisis which occurred in 2008 pushed down rare earth prices again.

In order to stimulate economy, China began to implement stimulus policies, causing rare earth prices to climb in 2010, and were pushed up to a near-year-high in July 2011 by speculation capital.

But due to high prices, sluggish global economy and low demand, rare earth price index plunged from 15, to 5-6, and had been falling since then.

Chen Jiazuo reported China will continue to implement exploration quantity and separated products production plan for rare earth in 2013, with total volumes flat with 2012, and rare earth prices will fall further, which will given incentive to downstream consumption. China's rare earth consumption in 2013 should reach 90,000 mt, up 7% MoM; global total rare earth consumption is expected to be 130,000 mt.

China's total rare earth exploration volume planned in 2012 was 93,800 mt, with consumption of 84,000 mt.

                       

Exploration of Other Suppliers

China has 23% of rare earth in global total volume, and supplies 90% of rare earth to the world. Due to high price and expensive costs, US, Europe and Japan began to seek for other suppliers outside China, and actively explore substitute products for rare earth.

The most influential explorations are the Mountain Pass mine by Molycop and Weld mine by Lynas

China will continue to implement rare earth export regulations in 2013, with export quotas level with 2012. In 2012, China's export quotas for rare earth were 30,966 mt.

China's utilization rates of rare earth export quotas 2011 and 2012 were 52.01% and 48.75%, respectively, due to soft demand.
　　
As global rare earth supply increased, rare earth prices should fall slightly in 2013.
 

Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

The latest survey indicated declines in prices for most rare earth products last week.

Prices were RMB 34,000/mt for lanthanum oxide, RMB 36,500/mt for cerium oxide, RMB 367,500/mt for praseodymium oxide, RMB 325,000/mt for neodymium oxide, RMB 287,500/mt for didymium oxide, RMB 4,850/kg for europium oxide, RMB 1,775/kg for dysprosium oxide, RMB 131,000/mt for gadolinium oxide, RMB 65,500/mt for cerium misch metal, RMB 387,500/mt for praseodymium-neodymium alloy and RMB 1,825,000 mt for dysprosium-iron alloy.

Demand for rare earth products remained depressed, with some cargo holders cutting prices for sales. Many producers have yet to resume production as orders remained poor in early April. Operating rates at rare earth smelters also remained low, and some of them only produced semi-finished products to push down costs.

We expects rare earth prices to fall further this week given strong bearishness among market players.
 

Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

The GuruFocus 52-week low screener reveals that the rare earth and metals company Molycorp Inc. is at a 52-week low of $5.30 (high was $35.79). According to the GuruFocus Value Screen for 52-week lows, Molycorp is 85.2% off its high. But top investor Gurus, John Griffin and Steven Cohen appear to be holding on, and Molycorp's insider traders were busy in February.

Guru John Griffin is the largest Guru Molycorp stakeholder, with 2,864,700 shares as of the fourth quarter, when he made the new buy. With Griffin's trading history, his MCP shows an average share price of $9.58, and a 47% loss. GuruFocus research shows that Molycorp is down 85% over 12 months, off 49% since January. With a market cap of $1 billion, and a P/B ratio of 0.5, the company reported consolidated net revenues of $528.9 million during 2012, a 33% increase over the full year 2011. The company generated a gross profit of $17.3 million in 2012, as compared to $218.9 million during the prior year. According to the company, gross profit decreased as a result of significantly lower pricing and increased production costs, offset in part by increased volumes and the acquisition of Molycorp Canada in June 2012. The company also acquired a leading rare earth processor, Neo Material Technologies, for $1.3 billion (Canadian) in 2012.

Commenting on Molycorp's 2012 performance, President and CEO Constantine Karayannopoulos said, "The economics of our model of vertical integration on a global basis remain strong... Our fundamental strategy going forward is to return confidence to rare earth customers through supply security and price visibility."

Owner of the largest U.S. deposit of rare earth, Molycorp Inc. mines and processes rare industrial metals and minerals needed in a wide spectrum of manufacturing applications. The open-pit Molycorp mine in Mountain Pass, Calif., was once the world's largest producer of rare earth elements ( REE ). The mine was closed due to numerous leaks of radioactive wastewater as well as competition from China, the world's giant REE producer. The global company, headquartered in Colorado, re-opened the new and improved Mountain Pass mine in 2012, calling it "Project Phoenix."

Molycorp products and materials are critical to the manufacturing of electric vehicles, smartphones, solar power systems, advanced water treatment systems and a great deal more. The defense and aerospace industries use Molycorp materials in satellites, guidance and control systems, and global positioning systems.

Guru John Griffin is the largest Guru stakeholder, with 2,864,700 Molycorp shares as of the quarter ended Dec. 31, 2012, when he made the new buy. With Griffin's trading history, his Molycorp holdings show an average share price of $9.58, and a 47% loss.


Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

Tantalus Rare Earths has revealed a new resource estimate for the total rare earth project in Madagascar which has confirmed its massive scale.

The review, carried out by consultant SRK, has defined a 435mln tonne resource at 0.08% total rare earth oxides (TREO), which equates to 348,000 tonnes of contained TREO.

This triples the size of the resource, which was last assessed in 2011.

“Our optimistic view of the value of the Tantalus project continues to be supported by the results of the exploration programme,” said chief executive Jurgen Schillinger.

“The issue of this updated JORC compliant inferred mineral resource represents a further milestone for the total rare earth project.

“It confirms the massive scale and grade of the project. It justifies proceeding with the proposed technical evaluation and preparation of a preliminary economic assessment.”

Tantalus rare earths also confirmed that analysed material shows that 19% of the REOs are in the ‘heavy’ category – across the industry these ‘heavy’ rare earths are typically considered to be premium products.

And Tantalus rare earths says that once cerium is excluded in production the heavy rare earth ratio will increase to about 31%.

It was also highlighted in that the research being conducted by the University of Toronto has confirmed that the  project’s rare earth material can be processed using very basic and environmentally friendly leaching method, which will separate a rare earth concentrate from ionic clays.

This material, according to Asian Metal, which is conducting separate research, is similar to the ion absorption clays found in China, which yield production costs averaging just US$3 to US$4 per tonne.

Tantalus rare earths said that the REO basket price for the material is estimated, by Asian Metal, at US$71.26 per kilogram.

Meanwhile, after applying a 35% discount to that basket price, Tantalus rare earths says the in-the-ground rare earth resource (excluding cerium, which cannot be processed simply) would be worth an estimated US$9.9bn.

“The suggested presence of a relatively large ion adsorption type clay deposit at the total rare earth concession renders it of particular importance to global efforts towards the expansion of HREO supply.

“The ion adsorption clay deposits of Southern China are currently the primary source for the vast majority of global heavy rare earth production, and have endowed China with a distinct economic advantage, as they are generally comparatively simpler and less expensive to exploit than their bedrock counterparts.

“Assuming additional studies reinforce test work indicating the presence of ion adsorption type clays, the development of the total rare earth Project will constitute an important step towards the establishment of an ex-China HREO supply chain that is directly comparable, and potentially competitive on a price basis, with that of China.”

The new resource estimate is based on a large amount of data taken from 289 drill holes, 968 pits and more than 20,000 samples.

Last week, Tantalus rare earths received regulatory approval for a share issue to raise up to €10.5mln.


Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

Greenland Minerals and Energy, a junior company focused on delivering a production center for specialty metals, including rare earth elements (REEs), at its Ilimaussaq complex in South Greenland, has decreased the estimated capital cost for its Kvanefjeld project from $1.53 billion to $810 million as it considers a staged development option.

Kvanefjeld, situated within the Ilimaussaq complex, was one of the company’s first large-scale deposits to be delineated, and is recognized as one of the world’s largest resources of REEs. It is estimated to contain a favorable mix of REEs, including yttrium.

Greenland Minerals and Energy is now focusing on a staged development strategy for the project, with initial mine throughput set at 3 million metric tons (MT) per annum, eventually expanding to 6 million MT per annum. The project development will consist of two stages, namely a concentrator stage and a refining stage. The concentrator stage will cost an estimated $450 million while the refinery stage will cost a further $360 million.

Greenland Minerals and Energy also confirmed that with the mine and concentrator study component of the feasibility study now completed, it will be able to finalize environmental and social impact assessment studies and apply to the Greenland government for an exploitation license. Construction is set to begin in 2015, with first production scheduled for 2017.
 

Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

Washington right now is supposed to be all about slashing budgets and tightening belts — but the Department of Defense has recently asked Congress for over a billion dollars. To buy rocks.

Specifically, to buy rare earths and other minerals that are crucial to the U.S. defense industry, and whose supply is currently at the mercy of China and its opaque political system. Japan, for example, was starved of rare earth elements during a maritime dispute with China in 2010. The United States wants to hedge that risk, given the damaging consequences an abrupt clampdown could entail.

The DoD has in previous years noted China’s near-monopoly on global rare earth metal production, but the present report, delivered to the House Armed Services Committee in late March, describes the risks in stark terms, and sketches out a range of scenarios.
Advertisement

One scenario has China embargoing exports of some key rare earth elements, and notes that currently the U.S. would be hamstrung.

Stockpiling some of the crucial elements is one of the proposed remedies for China’s control. It’s an idea that has hardly been heard since the later years of the Cold War, given the growth of globalized and largely unfettered trade that has characterized the last several decades.

Daniel McGroarty, principal of American Resources, a policy group, and president of U.S. Rare Earths, a mining company, referred to a reflection made by Adam Smith, the ideological father of free markets, over two hundred years ago: that when it comes to strategic items like sailcloth and gunpowder, “it might not always be prudent to depend upon our neighbors for the supply.”

Rare earth metals are to the the modern world what gunpowder and sailcloth were to 18th century Britain, McGroarty says, which explains the DoD’s concern.

                  

“I think we lost sight of the geopolitical or strategic element that might cause countries to intervene in industry for reasons of advantage that are not just economic,” McGroarty said in a telephone interview. “I think we just didn’t see that. And now when we do see it, the situation has changed drastically.”

Two decades ago, McGroarty said, the rare earth market was split between the United States and China. “Now it’s become extraordinarily lopsided,” with China producing over 90 percent of supplies of rare earths.

The Department presents its report on Strategic and Critical Materials Report on Stockpile Requirements every other year. In the past it has noted China’s predominance in the rare earth metal space, but had not previously evinced the concerns seen now.

In a strategic risk assessment given in Appendix 12, the possibility of China cutting off rare earth exports was assigned a mean probability of only 4 percent, though with dire consequences. “Gross domestic product losses would be high, and the consequences would extend over a significant timeframe,” the report said.

It continued: “Economic consequences of war with China are high based on the mutual dependence between the two countries. Militarily the conflict would be violent, but quick; and we would get the better of it, at least in the next ten years. Politically, there would be some loss of credibility on both sides, due to the failure to prevent the war. Trade disruptions would also have major Chinese domestic political consequences.”

A scenario where China cuts off exports of some key minerals for a year “in an effort to coerce or punish the United states… as well as to drive up commodity prices,” was also considered. There would be a $1.2 billion shortfall for the 72 minerals considered.

Complicating the assessment is the sometimes haphazard and fragmented nature of how rare earths are obtained from China: in the south of the country, tens of thousands of metric tonnes of rare earths are thought to be wrung from the ground, and refined and exported, by a chaotic chain of fly-by-night mining operators — none of those figures go into the official books. Estimates for that illicit activity range from 10,000 to 40,000 metric tonnes per year.

At the height of its production, Molycorp, a U.S.-based miner of rare earth elements that was hit hard by China’s rock-bottom prices, says it planned to produce 20,000 metric tonnes of product in 2012. This means the underground Chinese supply component could be as much as double the entire U.S. supply, which goes some way to illustrating the opaque and potentially volatile nature of Chinese supply.

“Think about how nervous that would make a Pentagon planner,” McGroarty says.
 

Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

The monthly Rare Earths MMI® slipped by one point, registering a value of 42 in April – a decrease of 2.3 percent from 43 in March.

Metalminer's rare earth  metal prices index continues as the worst performing MMI of all 10 MMI indexes.

“Like we have seen in previous months, we note that the entire Rare Earth index has not slid; rather, the slide comes down to a few key rare earth metals,” said Lisa Reisman, managing editor of MetalMiner.

“In particular, we see price weakness for yttria, samarium oxide, neodymium oxide, lanthanum oxide and europium oxide,” she continued.

The fact that that the price drops continue to impact only a handful of rare earth metals suggests to apply caution to any press or pundit statements slamming the entire sector. Price has been seen weakness in specific metals based upon the supply and demand fundamentals for that particular metal, but other rare earth metal prices remain well-supported, indicating a market in greater balance.

So despite the index registering a value of 42, Metalminer won't draw general conclusions that all rare earth metal prices have declined.
 

Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

Europium oxide finished as the week’s biggest mover – and, in fact, the only mover after dropping 4.5 percent.

Cerium oxide remained unchanged for the week. The price of dysprosium oxide did not change since the previous week.

Lanthanum oxide, neodymium, neodymium oxide and samarium oxide, among others, also remained essentially flat.

Following a 25.5 percent decline in price, yttria finished the month down hard. A 13.3 percent drop over the past month hit neodymium oxide. Lanthanum oxide prices dropped by 12.8 percent this month. Samarium oxide was down 9.5 percent for the month. After falling 6.8 percent, europium oxide finished the month down as well. Cerium oxide prices fell 6.0 percent. Praseodymium oxide prices decreased by 2.0 percent, and the value of praseodymium neodymium oxide weakened by 1.6 percent. In a whole, rare earth oxides prices fell down in the past week.
 

Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com