Friday, October 14, 2011 REE surplus ahead? Try telling that to Berlin and Tokyo
Read too many rare earths forecasts and commentaries and you could well conclude the game was over: those that are coming into production within the next year or two will close the gate behind them, filling all the world’s requirements and leaving nothing for those explorers coming up behind. We have heard of REE going into “permanent surplus” over the next three to six years (depending on what element you’re talking about), of prices dropping, of end-users finding other metals and compounds to replace REE.
Maybe. But it doesn’t look as if the Germans and the Japanese (two big end user nations) are taking such a relaxed view or assuming they’ll be in a REE buyer’s market by 2016. If they were, then why this week was German chancellor Angela Merkal talking REE in Ulan Bator and Japanese trade minister Yukio Edano doing the same in Guangzhou?
Germany and Mongolia, as expected, signed a deal on Thursday aimed at developing exports of coal, copper and other commodities - with specific mention in reports to rare earths. Merkel said Europe's biggest economy wanted to forge a "long-term partnership" with the resource-rich nation. She noted that the agreement would include rare earths and copper. According to a news agency report, German firms had said they were keen to conclude agreements in Mongolia on rare earths for use in iPods, low-emission cars, wind turbines and missiles. Merkel said Prime Minister Sukhbaatar Batbold had expressed interest in German technology relating to the exploration of copper and other minerals including rare earths.
Meanwhile, Japanese trade minister Yukio Edano held talks Friday with Chinese Premier Wen Jiabao in Guangzhou, southern China, as part of efforts to boost bilateral economic cooperation. Edano plans to request that China ensure a stable supply of rare earth metals and address price differentials in such minerals between the country and abroad, the Nikkei news service stated.
This follows a recent report that Japan is continuing with its efforts to jointly develop mining for rare earth metals in Burma as a means to diversify its supplies from the present dependence on China. Kyodo news agency said meetings with Burmese foreign minister Wunna Maung Lwin are being set up. Japan is informally sounding out Burma about inviting Foreign Minister Wunna Maung Lwin to Japan later this year to advance the plan, said Kyodo.
Not that Japan or other users are resting on the subject of substitution.
Mitsubishi Materials Corp at Cetec, a Mie Prefecture joint venture whose partners include Panasonic Corp, is installing additional equipment for disassembling air conditioners and refrigerators. Nikkei says Cetec will start recovering rare-earth metals, including neodymium, from the discarded appliances. A magnet-recycling process will be introduced in response to the increased use of magnets made from neodymium in air conditioner compressor motors.
RMR Price at posting:
18.0¢ Sentiment: None Disclosure: Not Held
