Rare Earth Race Rattled by Retreating Prices

LONDON, December 5, 2011 -

Leading industry publication Industrial Minerals has published a new report looking into the uncertain path ahead for junior rare earth miners.

The report includes a table detailing the leading rare earth projects in the world outside of China, which dominates the market with over 95% of global supply.

This year China reduced the amount of rare earths available for export. This has pushed Europe, North America and Japan to seek new supply sources.

 ”Falling sales prices and an uncertain macroeconomic environment could have a significant impact on the ability for junior rare earth companies to raise finances for project development,” online news editor Mark Watts said.

Rare earth oxide (REO) prices surged in the year leading up to August 2011, in some cases to over 30 times above historical levels, creating a frenzy of interest from investors. But Chinese export prices have since declined from their highs due to lower demand from overseas end users, leaving some investors with less confidence in the market.

“Rare earths prices were seen as being unsustainably high by many and have since settled - but even though they have fallen, some REO prices are still six times the level at the start of the year,” Watts explained.

The light rare earths have experienced the sharpest export price drops. Cerium oxide, an abundant rare earth used in glass polishing, has dropped 57% from mid July to a range of $55-75kg.This is due in part to a lull in demand in the flat glass industry.

The lightest rare earth, lanthanum oxide, used in petroleum cracking catalysts, lost 52% of its value during the same period, and is now trading at $60-85/kg.

Higher prices have seen end users attempt to reduce the use of rare earths, substitute for cheaper alternatives or relocate production assets to China. There has also been a drive to boost recycling, especially in Japan and the EU.

Read the report: www.indmin.com/Article/2943231/Rare-earth-race-rattled-by-retreating-prices.html

Industrial Minerals provides the latest prices, news and analysis on the global supply and demand of non-metallic minerals. Mark Watts (Twitter: @MarkHawkesWatts) is online news editor specialising in critical/strategic minerals.

If you'd like more information or to schedule an interview contact: Siobhan Lismore on +44(0)2078275253, slismore at indmin.com