sp scenario, page-11

"as for mining and minerals processing projects the risks and rewards are very high and the products prices during these volatile times +/- >100% in a year is not uncommon.
...
Historic prices range from $10 in 2009, >$147 in 2011 to $37.45 recent months.The price is very unlikely to drop to $10 as in Iron ore price back to $20 because its not possible to supply at such price at present. When Iron ore dropped from >$180 to $70 in 2009 very few forecasted that it will be >$120 today because there are now so much more supply from new and expanded mines."

Your analysis is valuable, but there are an important reason that may be ignored: China reason.

the reason of why the price both rare earth and Iron ore that so volatility?

the rare earth price---the mainly reason is political and not caused due to demand' changed.

due to a island event with Japan, China's rare earth(96%of monopoly in the global RE market) policy tighten up that directly triggered the formation of the rare earth bubble as the first time in history... the tightening/relaxation of China's RE policy, and a large number of new RE projects outside of China were appeared... then, the rare earth bubble burst.

---China is the largest RE supplier in the world.

the iron ore price---the mainly reason is due to economic (supply and demand).

Concern about the world economy, especially China economy would may into a recession, expected that future'reduced demand to led a lower price; then also due to the global economy, especially China's economic will be recovery, the expect that future'increasing demand to lead a recovery in price.

---China is the greatest demander for Iron ore in the world(the largest-Iron ore-customer of BHP and RIO).

Why Iron ore price can be recovery, and rare-earth price don't so?

Simply say: Iron ore is "very lack of resource but large demand" to China ; Rare earth is "need but very rich resource" in China.

a my previous post for reference(9000877 Posted: 25/01/13):

" a rule

1.Any strategic resource if as long as China has demand and scarce, this resource will usually maintain a high
Price;

2.Any strategic resource if as long as China has demand and rich, this resource usually will maintain the flat Price;

3.Any strategic resource if as long as China has demand and rich, but also rich in the world, this resource will usually to maintain the low price.

now China's RE Demand and RE production all be the first in the world. the RE price would be suitable for No.2 rule "