In a very interesting assessment of the rare earths sector, Great Western Minerals Executive Chairman, Gary Billingsley told the audience at the Global Mining Investment Conference in London that although there could be major short term problems in rare earths supplies, some rare earth elements (REEs) could be in a substantial surplus position within the next few years.
With China both the biggest consumer, and by far the biggest producer, of rare earths the market has been severely affected by that country's policy of retaining ever higher amounts of rare earths for its own usage, and this has seen prices for some rare earths - notably at the heavy end of the rare earth spectrum - rise dramatically over the past year. There is little doubt that China's rare earths policy will lead to a severe shortage of some rare earths over the next two to three years before any new, or resurrected, Western mining operations can be brought into production.
Thus all rare earths are not created equal in supply, or demand. With a limited number of known REE deposits which could relatively quickly be brought into production in the next three to five years - three in Australia, one in Vietnam, one in South Africa and one in the USA, critical shortages are likely in some heavy REEs such as dysprosium, tritium and neodymium, while, as Billingsley pointed out others at the lighter end of the rare earths scale such as cerium and lanthanum could move to a strong over-supply position which makes the economics of new rare earth mining operations problematical. Longer term he sees another eight significant deposits which could be brought on stream later in the decade.
While the current high prices for the heavy elements may well be sustainable in the medium to longer term, those for the lighter elements will not be, Billingsley said.
But, again in the medium term Billingsley feels that there will not be critical shortages as the new deposits are brought into production - although this in itself may not be simple given the long lead time in bringing mines on stream - even in mining friendly countries and states. In the case of REEs, since many of the known deposits are associated with radioactive materials such as uranium and thorium there could well be environmental opposition which could delay such projects further.
China, of course, is the bête…
