The Price of REO catalystI'd add that the exact thing that has lead to the decline in the shareprice could reverse and lead to become its saviour. The price of REO, The price of REO will potentially come into play next year when tarrifs of 60% are placed onto Chinese goods. While the detail of Trumps proposed tarrifs are unknown, if a 60% tarrif is placed on REO, then the price will increase for USA companies by a corresponding amount, which should take the IXR project into scenario 2 in 2025, 2 years before production.
Chinese VAT and rebatesThese tarrifs also apply to finished goods like EV's and trurines. China doesn't want US tarrifs on finished goods. It has designed a rebate system inside China that penalises exports of REO and benefits exports of value added goods by giving these VAG's a tax rebate of 15% on export. In retaliation to US tarrifs, China may well weaponise REO as it did against Japan a decade ago. Prices increased substantially during this period. By adding further taxes on exports on REO, would make their value added goods more competitive. We have already seen export controls on SB,gallium and germanium. In the last few days they have withdrawn the 13% VAT rebate on aluminium and copper exports. This effectively makes these products more expensive for western countries.
China has no interest in selling REO to the West only end consumer products.
China has made it very clear that RE are a key sustainable competitive adavantage. They have mandated laws surrounding who can export REO, and applied strict laws forbidding the export of technology and know how of its production processes. They want to use RE in value added goods they sell to the west like EV's, Wind Turbines, and cell phones. Who knows where this all ends up, but with increasing geopolitical tensions, and what could be the start of deglobisation, a much higher NdPr, TB and DY price could well eventuate next year. While current prices disincentivises investment (as China wants), those that have a project that is profitable at the current prices, will be well placed as the beneficiaries of these geopolitical tensions. A gold company that made investment decisions based on a low gold price of $1570 in October 22, would have made mega profits in the recent escalation in prices to $2800. GLTAH
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