core sector communique

HEAVY RARE EARTHS DOUBLE IN PRICE IN A FORTNIGHT
Industrial Minerals comment on gain, explain why market is so tight

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The price of heavy rare earth elements (REE), as assessed by market leading publication Industrial Minerals, has more than doubled over the last two weeks.
Dysprosium oxide, used in magnets, lasers and nuclear reactors, has risen from a level of $700-$740/kg, to a top level of $1,470/kg. This is double the price level at the start of the month.

Europium oxide, used for its phosphorescent properties found in plasma TVs, smart phones, and energy saving light bulbs, has risen from a price level of between $1,260-$1,300/kg, to a top level of $3,400/kg – a 142% change over the same period.

“Prices of heavy rare earths have surged since the start of the month as the Chinese government announced further plans to centralise control over the country’s mining assets,” Mark Watts, Industrial Minerals online news editor explained.

“Heavy rare earths, which are largely mined in the southern Chinese province of Jiangxi, have been subject to tighter environmental controls and a government crackdown on historically widespread illegal mining,” he continued

Prices for REE have been rising continuously since last year, but it is the consistent high rate of increase of these price rises that is attracting widespread attention.

“REE production and consumption has been around for the last few decades, but there are two primary factors have changed the supply/demand dynamic of this niche mineral market sector in the last few years,” Industrial Minerals editor Mike O’Driscoll explained.

“Demand for REE is increasing in applications that are less esoteric than say, 20 years ago. And China, which is the world’s main commercially developed REE source of supply, is reducing exports and increasing its consumption of REE,” he added.

“Add to this a lack of alternative REE supply outside China – certainly in the short term as a raft of international REE projects struggle to come to fruition – coupled with, and perhaps most concerning, forecast estimates of a projected 48% increase in world REE demand to 185,000 tonnes as soon as 2015.

“This includes specific shortages of dysprosium and neodymium, so it is not surprising that prices of rising at such a rate.”