The big picture is price control.
China has the advantage of supplying all key rare earths – NdPr, Dy and Tb which presents 70% - 80% of demand (payability). On the other hand, hard rock hosted (NdPr) projects are modelled on the payabliity of 35% - 40% mineral concentrates.
Therefore, China has the advantage of de-incentivising all western hard rock hosted projects because they can keep NdPr prices low and keep them there. Hence, why VML recently announced a halt in construction on it's half-finished rare earth processing facility in Saskatoon.
The 2 elephants in the room will always be who supplies Dysprosium (Dy) and Terbium (Tb). As China stops the exports of these ‘heavies’, that only iconic-clay hosted deposits can economically deliver, the western world is forever crippled.
Unless, we treat 'proven' ionic clay-hosted rare earths as Tier1 projects, and everything else, including hard-rock projects as Tier 2 or 3, it may provide a better realistic understanding of which business proposition is greater for the security of supply.
Furthermore, if the Tier1 project happens to be located in a sovereign-trusted country with solid infrastructure and high ESG credentials then, its probably much greater than.
Exciting times!
AIMO, DYOR, GLTA(patient)H
The big picture is price control.China has the advantage of...
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