A reality check - my take

Are rare earths a strategic asset ?

If you’re billion dollar manufacturer which is dependent on a supply of rare earth rare material inputs – then rare earths are a strategic asset.

If your countries billion dollar defense systems are dependent on supply of rare earth raw material inputs – then rare earths are a strategic asset.

If you’re a small resource company with a heavy rare earth resource, you had better hope what you have in the ground is needed as a strategic asset by some multi national company or government agency for its defense systems – but is that enough?

If these multi national manufacturing companies and government agencies can fill up their strategic rare earth reserves with cheap illegal rare earths from China – then they won’t be in any rush to develop non-Chinese rare earth projects.

Based on the losses reported the big 6 state owned Chinese rare earth producers appear non-viable at current rare earth pricing – unfortunately it matters not because they have the backing of the Chinese government – the PRC, which appears willing to continue to absorb the losses indefinably to ensure China maintains its status as manufacturer and supplier of finished goods to the world.

For the Chinese it’s all about jobs and keeping them in China

The above is what Northern Minerals and every other rare earth developer must come to terms with.

So how does a rare earth developer like Northern Mineral win at this game

We have to beat the “loss absorbing” PRC, plus refocus the “illegal rare earth buyers” such as non-Chinese multi national companies and non-Chinese government agencies

What this means for Northern Minerals is that we had better be viable at current rare earth prices. GB says we are (see announcement 27 august 2014, page 2, 4^th paragraph down from the top), well it’s time to prove it to the world with factual studies based on current rare earth prices

It’s time to stop kidding ourselves, if the PRC is not with us then it is against us – and don’t expect any favors from the non-Chinese rare earth users - that is the reality of the world in which we now live

So if Northern Minerals is not robustly profitable at current rare earth prices then it’s time to find a way to make our project viable at current rare earth prices – even if that means exploring new separation technologies

The ultimate measure of a capable board is not how they deal with moments of comfort and convenience, but how they deal with times of challenge and controversy


NTU has a very capable and experienced board, and once again will prove themselves in addressing this situation