Published on Thursday February 02 2012 (AEST)
Non-China, or rest of world (ROW), rare earths production is expected to increase tenfold between 2011 and 2016 - that is, from 6,000 tonnes a year to 60,000 tonnes. This will approximate ROW demand of 55,000 tonnes, within total global demand of 160,000 tonnes.That was the headline from Dudley Kingsnorth’s latest REE forecasts presented at the Technology Metals Summit in Toronto. It was delivered by video link from Perth. Kingsnorth, of Industrial Minerals Co. of Australia, was formerly project manager at the Mt Weld REE mine under its previous owner and is now the newly appointed professor at the Centre for Research in Energy and Minerals Economics at Curtin University, Perth.
Looking forward to 2020, Kingsnorth forecasts global demand for rare earths of 200,000 and 240,000 tonnes. ROW demand will have increased to between 70,000 tonnes and 90,000 tonnes a year, which represents a 50 per cent increase in the market (compared with 2016) and should be readily available to ROW producers. China’s export quotas will probably stabilise at about 25,000 tonnes a year; with a focus on supplying heavy rare earths demand, which are very scarce in ROW.
Over the past 12 months, under the influence of a weak global economy, high rare earths prices and the uncertainties about ongoing supply from China, global demand has fallen from 125,000 tonnes to 105,000 tonnes REO.
On a broader plane, however, with the announcement by Lynas that approval by the Malaysian Atomic Energy Licensing Board has been received, the industry has breathed a collective sigh of relief. For consumers, diversity of supply is close at hand; for aspiring producers, the Lynas approval demonstrates that gaining support for the disposal of the associated radioactive waste is not an insurmountable issue.
Another point made by Kingsnorth in his presentation: China will not directly deny rare earths to the ROW but it will take whatever measures are necessary to maximise value-add manufacturing in China using those REE.
He believes that continuing high prices would mean that efforts to substitute, recycle and replace REE use in new applications would be ongoing. Meanwhile, heavy rare earth production will be constrained so prices for neodymium, europium, dysprosium, terbium and yttrium will remain strong.
In keeping with past forecasts he believes that the lack of supply-demand balance in 2016 as illustrated in the table below will be a major issue (in tonnes):
Demand--------------------------- Supply
Cerium: 60,000-70,000 -----------75,000-80,000
Neodymium: 25,000-30,000----------- 30,000-35,000
Europium: 625-725 ------------------ 450-550
Dysprosium: 1,500-1,800--------------- 1,300-1,600
Terbium: 450-550------------------- 300-400
Yttrium: 12,000-14,000----------- 9,000-11,000
In 2016, he believes only three mines can be assumed with certainty to be in production - Mountain Pass, Mt Weld and the Indian REE project involving Toyota; four others are on the possible/likely list: Steenkampskraal (Great Western), Kazakhstan (the Summit Atom Rare Earth Company established by the Kazakh government and Sumitomo), Dubbo (Alkane Resources) and Dong Pao (Vietnam with Toyota involvement). He adds that, of all those, only Dubbo has 25 per cent-plus of scarce HREEs in its mix.
Kingsnorth also argues that China has adequate REE to meet its own needs. There are reserves of somewhere between 30 million and 50 million tonnes, along with processing capacity of more than 200,000 tonnes a year, of which between 40 per cent and 60 per cent is idled for either economic or environmental reasons, but which has the potential to be restarted.
Moreover, the state-owned enterprises in the REE sector have announced large capital spending programs. However, the country’s HREE reserves are finite: somewhere, possibly, between eight and 12 years.
However, Kingsnorth sees potential problems for China as it pursues current REE policies. One is that industry consolidation being imposed from above could create an oligopoly. The other is that if environmental legislation is enforced too strictly then the industry could be downsized such that it will not be able to meet. While this is unlikely, it highlights the title of Kingsnorth’s presentation “The Rare Earths Industry: A Delicate Balancing Act”.
The emerging ROW industry also has its challenges. For one thing, it is LREE-centric and shortage of the heavy elements is a major barrier to ROW growth in the magnet and phosphor sectors. For another, there is a dependence on ‘others’ for technology; China, Molycorp, Rhodia and a few Japanese companies are the only sources of rare earths technology and will continue to play a key role in the development of new projects.
Click Image To Access Uranium Stocks Australia
Rare earths are also known as technology metal, because without the use of rare earths it would not be possible to make the latest digital technology products. Although rare earths are used in small quantities, their role is pivotal. Unlike other elements, the rare earths industry is dominated by China, which accounted for 95.3% of the total global production. Rare Earths Market
ReplyDelete