Rare Earths (NdPr Oxide)Price: US$110.30/kg% Change: +6.06%Rare...

Rare Earths (NdPr Oxide)

Price: US$110.30/kg
% Change: +6.06%

Rare earths has become the latest rich person’s play thing in the Australian resources market, with the iron ore moguls who made it big off the iron ore boom — think Andrew Forrest, Gina Rinehart and Chris Ellison — piling into the future facing commodity.

The mail on rare earths, and particularly the most-prized metals in the group of 17 elements neodymium and praseodymium, is that the rise of electric vehicle production and wind turbine generation will see major growth in the market over the coming decade.

“The question being where will demand come from? Is it from China or is it from outside China and that’s the game that is being played at the moment … and there is a lot to do in the West to not lose this fight against China, and that is that is yet to be seen,” Pol Le Roux, COO of ex-China market leader Lynas Rare Earths (ASX:LYC), said on a recent conference call.

“We see a lot of announcements of new magnet projects (but) so far outside China, I’ve seen only one new factory in Vietnam — Fujitsu — but that’s an existing magnet maker. And that’s a very excellent customer of Lynas. But that’s the only one which did actually increase production outside China so far, so we’ll see.”

Prices for NdPr averaged US$83/kg after VAT in China through the December quarter, but have begun to tick up steadily as the country has emerged from its Covid isolation.

Lynas faces a potentially tight deadline to complete a cracking and leaching plant at Kalgoorlie in WA by the middle of this year, though the miner is appealing conditions placed on the three-year licence extension it received in 2020 allowing it to keep importing ores with naturally occurring radiation from its Mt Weld mine in WA until mid-2023.

Its Kuantan processing plant has operated for around a decade, but has long been the subject of political opposition in the local community over its disposal of low-level radioactive waste. Lynas boss Amanda Lacaze said this week the miner’s safety record showed it was a responsible operator in Malaysia.

“Our position is very strongly that we … run a low risk operation. We are a lawful company, which is compliant with all regulations and we have never been involved in any sort of health or environmental incident,” she told analysts.

“The most compelling data that we have is now our 10 years of safe operations in Malaysia.”