Demand for rare-earth metals was increasing “exponentially”, primarily driven by demand for new technology, independent consultant and commentator Jack Lifton told delegates attending the 2010 Mining Indaba, in Cape Town.

He said that 2010 was already shaping up as the year of rare metals.

Rare-earth metals are critical technology metals used in the manufacturing of hybrid cars, super alloys used in the defence industry, cellphones, large wind turbines, missiles and computer monitors.

Lifton said that rare-earth metals were the “newest great interest” among investors, primarily the result of growing demand.

The demand for rare-earth metals has resulted in a significant increase in the number of junior miners.

In the last year alone, Lifton said, more than 100 junior miners had announced over 150 different rare-earth mining plays.

These were just the private ventures that had gone public as initial public offerings, or had changed the direction of their existing listed entity to take into account rare earth “discoveries” or acquisitions.

Interestingly, Lifton noted, the rising demand had not increased supply.

The probability of an actual supply increase was dependent on at least a dozen variables, none of which had to do with the share price of the junior miner being analysed, he said.

The supply of rare earths during the next decade could only be maintained and increased by those which were already producing rare earths, or those that had produced them before and could reactivate their mines, or miners that had been developing good properties for many years already.

Significantly, Lifton predicted that there would be no increase in rare-earth-metal production outside China. The Asian giant currently accounted for 95% of rare-earth-metal production.

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