Muncher strikes again, page-63

PRC curb on illegal mining boosting rare earth metals
PRICES ‘EXPLODING’:The price of praseodymium-neodymium oxide has almost doubled this year, while that of neodymium has increased by 81 percent so far
Rare earths are booming again as a clampdown on wildcat miners in China crimps supply in the world’s biggest producer while the clean energy boom bolsters their use in everything from electric vehicles to wind turbines.

Prices for “light” rare earths including neodymium and praseodymium have exploded in recent months as traders and consumers snap up material that is becoming scarcer.

China’s shutting down illegal producers as the industry is swept up in the same kind of government clampdowns that have shaken other metals markets this year.

Among many other applications, the elements are needed to make magnets used in motors and turbines.

“The prices of light rare earths still have upside for the longer term,” Alice Mu, a Beijing-based analyst at researcher Argus Metals, said via a Wechat (微信) message. “There are shortages emerging from the supply side as China’s government shuts down illegal mines, purchases for state reserves, and implements tighter environmental policies.”

China, which produces more than 80 percent of the world’s rare earths, is clamping down on mining as part of a campaign to tackle pollution and tighten control of its massive industrial complex.

Measures to curb production have already driven up prices of aluminum and steel and now rare earths are feeling the heat just as demand accelerates.

Praseodymium-neodymium oxide, a raw material for the metal, has almost doubled this year, according to Shanghai Steelhome E-Commerce Ltd (上海鋼之家電子商務).

Neodymium surged by nearly a third last month alone and is up 81 percent this year.

Demand for some rare earths may exceed supply in the second half after the crackdown on illegal mines, China Rare Earth Industry Association secretary-general Ma Rongzhang (馬榮璋) said, according to a Shanghai Securities News report last week.

The rare earths join once-niche metals, including lithium and cobalt, as beneficiaries of rapid growth in the electric vehicle industry and renewable energy.

Global sales of electric vehicles increased by 55 percent last year to 695,000, primarily driven by China, according to Bloomberg New Energy Finance (BNEF).

While that is a tiny fraction of the world total, they will account for more than half of new sales by 2040 when a third of all cars on the road will be electric-powered, BNEF forecasts.

Usage of magnetic rare earths in such vehicles is expected to grow from about 2,000 tonnes last year to 7,000 tonnes by 2020 and 12,000 tonnes by 2024, according to a presentation dated last month from Lynas Corp, the biggest rare earths miner outside China.

Growth in demand for wind turbines will double usage of the metals to 4,000 tonnes by 2024, according to Lynas.

BNEF forecasts that onshore wind power will account for a quarter of all new power generating capacity additions globally over the next 23 years.