Ann: Major Increase to Globally Significant Rare Earth Resource, page-30

Hi Mate,

Sorry about the late reply but this is an intrinsically difficult question to answer and is partially the reason I constructed the table I did.



LREO - Ce, La, Nd, Pr
HREO - Dy, Er, Eu, Gd, Ho, Lu, Sm, Tb, Tm, Y, Yb
CREO - Dy, Eu, Nd, Tb, Y

Now the theoretical price is as per the table element price per kg. which would be 100% concentrate.

Then you get paid less depending on what percentage concentrate you supply, so again if you supply a 50% concentrate you get half the price.

Then there's the factor which is dependent on the basket. i.e. if you supply a 100% concentrate of Ce this would be worth much as its $1.7 a kilo vs for example Dy which is $250/kg.

In short, typically you get paid on the highest price driving elements. From the table above you can see this is Dy, Nd, Pr, Tb, for Makuutu which by price is 75% of the basket.



Without repeating myself and posting this table again and again it should give all the insights required. Because all companies make comments which about how much they're getting for a product which are misleading, as they're all different % concentrates, and have different baskets.

Most of the companies in the table are targeting a NdPr concentrate with some bonus elements in the basket similar to makuutu. Whereby makuutu's bonus elements are materially decent. Namely Dy and Tb.

If you view the line "actual revenue per tonne of concentrate" this is take from the DFS's and project revenues which says how much the company is actually getting paid to produce 1T of its product. I then normalised this across companies so that they theoretically produce the same % concentrate. which is the line above.

So if all the companies had the exact same basket and all produced the same concentrate % that figure should be even. But baskets aren't even so i normalised that. As you can see those figures came out roughly the same.

However, i make inferred comments that it appears the people producing higher concentrates don't receive linear pricing premium. Post #:42181843. The premium increases as the concentrate increases. Similar to Iron Ore. 62% vs 65%. This is only a 5% increase in grade. But in spot IO price is 13% higher for 65%. This is because smelting costs decrease with less waste requiring the be removed. I believe the same is true in regards to Rare Earth's but it's less known and due to varying baskets makes it harder to delineate.

But in short in Makuutu was to produce a 70% concentrate in comparison to a 35% concentrate it would receive more than double the price of the 35% concentrate IMV.

If you sign up to the premium version you can view the concentrate pricing. Note specifically Nd, Pr, Tb, Dy, Gd, Ho, are the 6 elements which pricing in increasing over the last year. And 4 of these are the 75% that make up makuutu's basket.
http://www.asianmetal.com/RareEarthsPrice/RareEarths.html

SF2TH