There are a few Aussie mineral sand mines selling zircon concentrate that contains monazite to China but only ILU that sells anything like a 20% monazite con (re-processing old monazite tailings pit is the reason). Victoria is the mineral sand monazite elephant in the room imo.. keep an eye out for developments there over the next few years for real RE competition. High U-Th is min sand monazite's Achilles Heel, cheap but very difficult to get approval for storage of radioactive waste in oz like most other countries. Glad to see we are taking a rational approach to what should really be a non-event for the benefit of Aussie jobs, exports, ex-China Re supply security etc.
"China may consider flooding the global market with REO oversupply to decrease spot prices and make any new REO plant uneconomic (forcing shutdowns or project financing delays)"... personally i think the days of China selling below market to control the RE market is over. Makes no sense to deplete China's limited RE resources and supply rest of world at below market prices just for a few more jobs and foreign exchange. Fair enough when China was poor, trying to rise and compete with the west for things to excel at. Today, after years of environmental damage and resource depletion, downstream value add, RE IP and tech that is a sustainable winner worth fighting for... not the raw Re material imo.
China imports much RE material from Myanmar and is actively scouring the world for 'economic' sources of more RE ore to feed the huge value-add machine that is China RE magnets/product industry. Downstream processing can be infinitely scalable and profitable so long as there is enough raw materials. Yes they are making noises about RE prices being too high, only because they are worried about local magnet inflation (don;t care if the west is price gouged). Same worry they have around other commodities although they generally are net consumers not exporters of other commodities. Seems reasonable to assume they will induce more RE raw material supply like the west is doing to lower prices, but unlikely they will want to crush new RE suppliers in a price war for control a very profitable and growing market imo.
Ultimately, RE industry is risky beyond the Chinese price control risk you raised. If China keeps importing as much RE as it can to supply the dominant, impressively profitable RE magnet industry for local use and export, while the west subsidises a double up of RE production to ensure supply chain security, the biggest risk is over-supply and price falls (tempered by strong demand growth obviously). Given western mines are being subsidised against lower priced China competition, one assumes those subsidies will remain and go higher in the face of any over-supply to 'ensure western RE independence'. Not enough subsidies to see any profits for shareholders probably, but sufficient to allow the mines keep operating and RE independence remains..
What's not to like for governments in that outcome? Still have the jobs, exports and RE supply security. RE magnets fall in price helping 'slay the inflation dragon' while ensuring enough magnets for everyone to have cheaper EV's and save the planet! Few will shed a tear for shareholders losing in this outcome... needs of the many outweigh losses of the few. If RE pricing ultimately falls, then perhaps rises again in the familiar age old commodities price cycle, don;t be at the back of the cost curve and wiped out is the lesson of history for long term shareholders...
REE Price at posting:
11.0¢ Sentiment: None Disclosure: Not Held
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