Mrgw -Well, I've done business in China, and I don't trust...

Mrgw -

Well, I've done business in China, and I don't trust them!

To a point, anyway. There is no doubt they are canny operators and will follow their own gameplan. What convinces me about the further restrictions in supply from China is the objective. The Chinese are not restricting supply currently with the objective of controlling the prices of the outputs, rather they are doing it from the strategic perspective of growing their domestic manufacturing base in key industries.

The plan seems to be to restrict availability of REE, so that manufacturing must increase inside China. The key point therefore is not the price of the REE, but the (non) availability of supply outside of China.

Clearly, as prices go up, it becomes more attractive to develop (previously) marginal mines outside of China, and as prices go down, less so. By controlling the exports, the Chinese are able to control world prices, and therefore the development of new sources, but only INdirectly.

So on the basis of this, I do NOT believe that REE prices will continue to rocket up, as this would risk too many new sources becoming viable, but I DO believe that the Chinese will always maintain their exports to ensure a significant shortage in availability outside of China.

Therefore good prices, continually increasing, but not at ridiculous rates.

On some of the other points:

Management has missed a few deadlines, but the project is sufficiently advanced now, I think it will complete on time. Many components are no longer on the critical path, so less chances to stuff up.

Cerium - and other less desirable elements - can always be sold at spot prices. The forward contracts are being signed on very favourable terms, including floor prices (but no ceiling). You can't sell Cerium like that, because there isn't a problem getting your hands on it. But you can always sell it into the spot market.

Cheers,

BridgeBaron