TORONTO (miningweekly.com) – Rare earth element prices are likely going to continue heading upwards, and China, which produces about 95% of global supplies, might halt exports altogether, an industry association warned on Thursday.
“The general consensus is that it [pricing] is going to get worse before it gets better,” Rare Earth Industry and Technology Association (REITA) director Keith Delaney said.
Prices have skyrocketed over the past two years as China drastically curbs exports and the rest of the world scrambles to secure supplies of the metals, used in consumer electronics, electric vehicles and wind turbines.
Delaney, speaking on a conference call hosted by US-based Technology Metals Research, said that even with new production coming on stream at Molycorp’s Mountain Pass mine in California and Lynas Corp’s Mount Weld project in Australia, customers might struggle to secure supplies.
“The promise of Lynas and Molycorp gives us some hope, but they’ve told me they are pretty much sold out for their first phase of production,” he said.
REITA is a non-profit company that seeks to promote the rare earths industry in developed countries, and it has producers and consumers of the elements as its members.
According to Delaney, it was a question of when, not if, China stops exporting its rare earths.
“I’m hoping for a soft landing, that the Chinese gradually ween us off,” he said.
He said that the country had warned the world “for years” that it would not be its eternal source of rare earth elements, and that the fact that China has been enforcing export quotas should have been “very predictable”.
China has been consolidating its chaotic rare earths industry in a bid to curb illegal exports and reduce harm to the environment. A flood of cheap supply of rare earths out of the country in the 1990s forced mines elsewhere to close, giving rise to China’s monopoly on the metals.
Asked to comment on the supply/demand balance over the medium term for the materials, Delaney said: “The supply/demand projections that I’ve seen don’t give me a lot of warm and fuzzy feelings.”
“We’re going to need many more rare earth properties to come into production before we’re out of the woods. We definitely need anything we can get.”
A major challenge Delaney saw facing the future of the industry was that of skills, as the closure of rare earths mines in the West while production shifted to China meant that people with the know-how to develop projects had been greatly reduced.
He called on the US government for another ‘sputnik moment’ to assist in developing skills and research and development to ensure there were adequate supplies of the crucial rare earth metals in the future.