Table of Contents:
- Rare Earths Market Update: H1 2024 in Review
- Rare Earths Market Forecast: Top Trends for Rare Earths in 2025
- How to Invest in Tungsten Stocks
- How to Invest in Magnesium Stocks
- How to Invest in Tantalum Stocks
- How to Invest in Scandium Stocks
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A Sneak Peek At What The Insiders Are Saying about Critical Metals
"Looking forward, we believe the current market malaise will ease in the coming six to 18 months, steering (magnet rare earths) prices back in line with our existing projections through the medium to long term."
— Ryan Castillous, Adamas Intelligence
“The market growth remains focused on magnet materials, specifically for rotary magnets using heavy rare earths, which, with the supply risk for heavy rare earths, provides the biggest upside.
— Nils Backeberg, Project Blue
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Critical Metals and Stocks To Watch
Rare Earths Market Update: H1 2024 in Review
The rare earths market was punctuated by significant fluctuations during the first half of 2024.
Global supply continued to struggle to meet rising demand, particularly outside of China. Early stage projects in countries like the US, Korea and India are showing promise, but have so far been insufficient to close the growing supply gap.
Conversely, while rare earths demand across key end-use segments — electric vehicles (EVs) and renewable energy technologies — started the year strong, some demand eroded during Q2, which was reflected in lower prices.
Geopolitical tensions also intensified toward the end of the quarter, and are likely to impact the market through H2.
China driving global rare earths supply with rising quotas
Global rare earths supply has been increasing annually since 2020, when total production topped 240,000 metric tons (MT). In 2023, global mine supply grew to 350,000 MT, with the majority of this fresh supply coming out of China.
In 2020, the Asian nation produced 140,000 MT of rare earths, with output ballooning to 240,000 MT in 2023.
“China’s Ministry of Industry and Information Technology raised 2023 quotas for rare-earth mining and separation to 240,000 tons and 230,000 tons of REO equivalent, respectively,” as per the US Geological Survey. “In 2023, mine production quotas were allocated to 220,850 tons of light rare earths and 19,150 tons of ion-adsorption clays.”
China accounts for 68.57 percent of all mined supply, and is likely to add to that number this year.
In February, the country issued its first round of 2024 quotas.
“A rare earth mining quota of 135,000 tonnes and a smelting and separation quota of 127,000 tonnes were unveiled for the first round of 2024, up by 12.50 percent from 120,000 and 10.43 percent from 115,000 tonnes respectively from 2023’s first round quotas,” a Fastmarkets report published that month states.
The quotas were targeted at China’s two major rare earths companies. “China North Rare Earth Corp has been allocated a mining quota for light rare earth of 94,580 tonnes and a smelting quota of 88,010 tonnes, China Rare Earth Group received a total mining quota of 40,420 tonnes including 30,280 tonnes for light rare earth, and 10,140 for ion-absorbed rare earth (medium and heavy rare earth), and a total smelting quota of 38,990 tonnes,” Fastmarkets explains.
In terms of top-producing mines, China’s Bayan Obo mines in Inner Mongolia make up the majority of market supply, followed by Mount Weld in Australia and Mountain Pass in the US.
According to the International Energy Agency (IEA), since 2015, Myanmar's share of global rare earths production has surged from 0.2 percent to 14 percent, and the US has increased its share from 1 percent to 9 percent.
Looking ahead to 2030, China is expected to remain the top producer of magnet rare earths, while Australia's share of global production is projected to rise to 18 percent, and the US is anticipated to maintain a 7 percent share.
As noted in the IEA’s Global Critical Minerals Outlook, the primary issue for the rare earths sector is supply concentration.
“The major concern for magnet rare earths is not a huge gap between demand and supply like in the case of copper or lithium, but rather an extremely important level of geographical concentration of today’s as well as future mining and refining projects that expose this market significantly to supply disruptions,” it reads.
Geopolitical tensions impacting rare earths supply and trade policies
Such rare earths supply disruptions could come from China implementing export bans similar to those issued in 2019, when the US and China engaged in a tit-for-tat trade war.
Limited rare earths exports from China were also the catalyst behind Australia-listed Lynas (ASX:LYC,OTC Pink:LYSCF), which was born when China limited rare earths exports to Japan in the early 2000s.
Now Lynas controls 15 percent of the rare earths market and is planning on expanding its presence in the space.
Currently Lynas operates the Mount Weld rare earths mine in Western Australia, and is a major global producer of neodymium-praseodymium (NdPr) oxide, a key material for neodymium iron boron (NdFeB) magnets.
In late June, Lynas announced plans to begin producing separated heavy rare earths products at its Kuantan refinery in Malaysia, with commissioning and ramp-up expected by mid-2025. The facility will have an estimated annual throughput of 1,500 MT of a mixed heavy rare earths compound, which includes samarium, europium, gadolinium and holmium. Initial estimates for dysprosium and terbium production capacity haven't been provided.
“This circuit reconfiguration at Lynas Malaysia provides a pathway to accelerate our commitment to processing all of the elements in the Mt Weld ore body,” said Amanda Lacaze, CEO and managing director of Lynas.
In an effort to increase domestic supply, the US government has announced plans to implement a 25 percent tariff on rare earth magnet imports from China. “The tariff rate on natural graphite and permanent magnets will increase from zero to 25 percent in 2026. The tariff rate for certain other critical minerals will increase from zero to 25 percent in 2024,” as per a May statement from the White House. “Concentration of critical minerals mining and refining capacity in China leaves our supply chains vulnerable and our national security and clean energy goals at risk.”
The announcement was welcome news to MP Materials (NYSE:MP), which owns and operates Mountain Pass in California, “America’s only scaled and operational rare earth mine and separations facility.”
Jim Litinsky, chief executive of MP Materials, told Fastmarkets in mid-May that the new tariffs will "help to level the playing field for domestic producers," giving the US market time to scale and develop.
Prior to the Biden administration's decision, MP Materials was awarded US$58.5 million by the US Department of Energy “to advance its construction of America’s first fully-integrated rare earth magnet manufacturing facility.”
Similarly, E-Vac, the US subsidiary of German magnet manufacturer VAC Group, was given US$111.9 million in US tax credits to advance the construction of its first US rare earth magnet manufacturing facility in Sumter, South Carolina.
The funding will facilitate the construction of a sintered NdFeB rare earth magnet plant in an American city. It is expected to be operational by late fall 2025.
The project, which began in March, is supported by the US Qualifying Advanced Energy Project Tax Credit (48C) under the Inflation Reduction Act). In its first phase, this initiative allocated US$10 billion in funding, with US$800 million in tax credits, to select projects focused on critical materials recycling, processing and refining.
Rare earths prices hurting as demand slumps
Along with oversupply, 2024 has brought weaker rare earths demand in key end-use segments, like the EV sector, due to lower consumer buying. In turn, that has caused prices to trend lower.
In an April article, Caroline Messecar, Fastmarkets' strategic markets editor for technology metals, points to several factors that she thinks have helped push rare earths prices down close to 70 percent in two years.
She identifies weak EV demand, a global economic downturn, previous volatility and geopolitics as culprits.
Looking ahead, the rare earths market outside of China could face supply disruptions as the Asian nation announced new regulations to protect rare earths supply for national security in early July.
These rules, covering the mining, smelting and trade of these crucial materials, emphasize that rare earth resources belong to the state. The government will oversee the development of China's rare earths industry, where the country has become the leading producer, accounting for nearly 90 percent of global refined output.
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Rare Earths Market Forecast: Top Trends for Rare Earths in 2025
Rare earths prices saw some gains in May 2024, fueled by positive sentiment over consumer demand in China.
While both dysprosium (Dy) and neodymium-praseodymium (NdPr) oxides benefited from this positivity, Benchmark Mineral Intelligence notes that Dy oxides registered the largest gain, moving 10 percent high month-on-month.
NdPr oxide, which is a larger market compared to Dy, was up a more moderate 0.6 percent.
However, the increases were not to last, and prices soon reverted to a downtrend.
“This was the first-time rare earths prices had recovered after a continuous decline (in 2023), but after a brief recovery, prices are now falling again,” Benchmark pricing and data analyst George Ingall said in a report that month.
Muted demand has weighed on prices, but year-on-year increases in mine supply have also capped price growth.
Global rare earths output has rapidly risen from 240,000 metric tons in 2020 to 350,000 metric tons in 2023, according to US Geological Survey data. The lion’s share of rare earths production continues to be dominated by China, a factor that remains relevant for the industry as the Asian nation continues to flex its control.
East vs. west divide still key for rare earths
Rare earths, which are essential in various high-tech applications, including electric vehicles (EVs), wind turbines and electronics, have become a political pawn between the east and west.
Currently, China and the US are locked in a geopolitical struggle over rare earths, with tensions mounting.
In late 2023, China imposed bans on exporting technologies for rare earths processing, tightening its grip on the global supply chain. By mid-2024, reports were circulating that the country's State Council would introduce stricter regulations on domestic rare earths mining, smelting and trading, effective October 1, 2024. The rules would declare rare earth resources state-owned and require companies to maintain detailed records in a traceability system.
The US responded with tariffs on Chinese EVs and critical minerals, aiming to counter China's dominance while bolstering domestic production. These measures underscore escalating tensions, with both nations prioritizing strategic control over rare earths amid growing demand for green technologies and national security needs.
While each nation grapples for supply chain security, Jon Hykawy, president and director at Stormcrow Capital, told the Investing News Network (INN) that a more diplomatic approach is needed.
“There is a potential fork in the path regarding critical materials, more broadly, and rare earths, in particular, when it comes to overall trade strategy between western nations and China,” he said via email.
“By my calculations, if we maintain an integrated trade structure, then, together, we will probably be able to provide sufficient quantities of both NdPr and DyTb (dysprosium-terbium) to achieve our goals in both the automotive and clean energy sectors; NdPr is easy, DyTb is harder, but it can be done.”
However, if western nations decide they want to exclude China, they will face shortfalls.
“If we decide to go our own way in the west, then we can likely deliver enough NdPr to do what we need to do. (But) we are unlikely to make enough DyTb to enable the intended use of all that NdPr," he noted.
Hykawy also took aim at governments not recognizing the increasing importance of DyTb.
“At present, there is some noise and support for ‘rare earths,’ but no one in government seems to understand that the critical materials out of the lanthanide elements is shifting from NdPr to DyTb. Without that realization, the steps that are being taken are not mitigating the correct risks,” he said.
Ex-China rare earths supply in the works
To combat China’s hold on the rare earths sector, the US is heavily investing in the space.
In April 2024, the US Department of Energy earmarked US$17.5 million for four rare earths and critical minerals and materials processing technologies using coal and coal by-products as feedstocks.
“The US has looked to support the development of a domestic rare earth supply chain by financing upstream development of rare earth mining from primary and secondary sources, along with recycling of rare earth-containing products," David Merriman, research director at Project Blue, explained to INN.
“In addition, the US government has provided financing for rare earth processing facilities under development by existing rare earth producers to be located in the US, along with NdFeB (neodymium-iron-boron) magnet production facilities.”
To bolster domestic magnet production against Chinese competition, the US government plans to impose a 25 percent tariff on NdFeB magnet imports from China starting in 2026.
However, since most NdFeB magnets are already embedded in components imported by US manufacturers, the tariff is expected to affect only a small fraction of the country's overall NdFeB magnet consumption, Merriman said.
As the US looks to build out a domestic rare earths supply chain, China has sought to fortify its own.
“China has also taken action to reduce supply chain risk for rare earths, both at the sourcing of feedstocks and the downstream finished product stage,” he said. “China via state-owned companies has invested in several foreign rare earth operations to diversify the origin of rare earth feedstocks, particularly for heavy rare earth-rich feeds.”
As Merriman pointed out, the diversification has been propelled by sourcing issues in 2024.
“The risk of China’s current feedstock sources has been highlighted in 2024 with disruption to feedstock supplies from Myanmar, which accounted for >40 percent of global mine supply of Dy and Tb,” he said.
In October, rare earths supply was interrupted when Myanmar’s Kachin Independence Army seized Panwa, a key rare earths mining hub, following the earlier capture of Chipwe.
The two towns in Kachin state, near China’s Yunnan province, are critical suppliers of rare earth oxides to China.
“Chinese imports of raw materials from Myanmar were 40,000 tonnes during the first nine months of 2024. If that production drops out, there will be a big impact on (heavy) rare earth prices,” Thomas Kruemmer, founder of the Rare Earths Observer, told Fastmarkets.
Rare earths project pipeline facing fragility
Depressed prices through 2023 have weighed on explorers and developers as new projects are financially unviable.
“There are several projects which are at advanced stages of development, though few are able to compete on a cost basis with fully integrated and state-owned operators in China,” said Merriman.
“Financing, metallurgical test work and the development of a sizable terminal market outside of China for semi-refined rare earth products are all barriers to the development of several rare earth projects.”
Weak markets are often fertile ground for M&A and other deals, and 2024 saw some notable examples.
In June, Astron (ASX:ATR) and Energy Fuels (TSX:EFR,NYSEAMERICAN:UUUU) completed the establishment of a joint venture to advance the Australia-based Donald rare earths and mineral sands project.
Since the agreement was penned, development activities at Donald have progressed, including work related to process plant engineering, auxiliary infrastructure, contract tendering and permitting and approvals.
In September, Defense Metals (TSXV:DEFN,OTCQB:DFMTF) signed a memorandum of understanding with the Saskatchewan Research Council (SRC) to support the development of a domestic rare earths supply chain.
Defense Metals and the SRC will explore collaborations on rare earths processing and supply, including using the SRC’s proprietary separation technology for Defense Metals’ products. They aim to negotiate a long-term supply agreement as Defense Metals advances its Wicheeda rare earths project in BC, Canada.
As the year drew to a close, Ucore Rare Metals (TSXV:UCU,OTCQX:UURAF) received a US$1.8 million payment from the US Department of Defense on December 13. The funding will support Ucore’s subsidiary, Innovation Metals, in demonstrating its RapidSX rare earths separation technology at a commercial demonstration facility in Kingston, Ontario.
What factors will affect rare earths in 2025?
In 2025, Merriman sees China’s continued rare earths dominance as a key driver for the sector.
“China maintains a strong influence over rare earth pricing, with most international prices for rare earth trades being based in some way upon Chinese domestic pricing. China has long sought price stability for key rare earths, allowing downstream value-add industries to benefit from reliable and often lower feedstock prices," he said.
“Maintained lower pricing in 2025 will likely help support demand growth for key earth products within the Chinese market, though the concentration of supply originating from China continues to make rest-of-world consumers nervous over becoming reliant on rare earth materials," Merriman also told INN.
For Hykawy, precarious supply outside of China and weak prices will be a focal point in 2025.
"Obviously, we’ve seen significant price drops for Nd, for example," he said.
"That helps the auto sector, but only by the slightest amount. Let’s say there is 2 kilograms of magnet in a main motor in an EV, and I’m likely overestimating. Only 27 percent of that is neodymium metal. The impact of the price change on 500 grams of rare earth is not moving the needle on an EV’s cost," Hykawy added.
He also expressed concern about the supply chain for heavy rare earths. “The bigger, long-term impact I am thinking about is, as Dy and Tb production becomes a bottleneck, how does the industry adjust to a world where the projects that can produce enough Dy and Tb are also making Nd and Pr as a by-product?” Hykawy said.
"To meet the growing demand for heavy rare earths, do the major NdPr producers, like Lynas Rare Earths (ASX:LYC,OTC Pink:LYSCF), MP Materials (NYSE:MP) and the Bayan Obo mine, drop their NdPr output to maintain reasonable prices, or do they keep going and flood the market and drop their own prices to unsustainable levels?" he questioned.
“For some time, NdPr have been the materials in demand. Soon, they might be valuable but overproduced commodities, with everyone scrambling to get the right amount of DyTb for their automotive or wind application.”
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Aclara Resources and Energy Fuels are clients of the Investing News Network. This article is not paid-for content.
The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
How to Invest in Tungsten Stocks
Tungsten was discovered in Sweden in the 18th century, and since then has found diverse uses.
About two-thirds of demand for this critical metal is from the mining and drilling industry for use in cemented carbides; mill products and chemicals account for the rest. However, while tungsten has many key uses, the market has been quite turbulent for the last several years — low prices have led to reduced output in some parts of the world.
Global tungsten production came to 84,000 metric tons (MT) in 2022, slightly above the 83,800 MT put out in 2021. As with many metals, China dominates the tungsten-mining space. In fact, according to the US Geological Survey, production of tungsten concentrate outside the country accounts for less than 20 percent of total global supply.
Interestingly, despite being the biggest tungsten producer, China is limited in how much it produces. The Asian nation's government has restricted the number of tungsten mining and export licenses that it awards, and has also imposed quotas on concentrate production and placed constraints on mining and processing.
Tungsten demand has faced pressure from recession threats, but use of the metal is still seen increasing. A global tungsten market report by Business Research Insights forecasts that the sector will grow at a CAGR of 8.71 percent to reach US$17.96 billion by 2027. Drivers will include an expansion of the mining and drilling industry, the growing use of tungsten in everyday and industrial products and the increasing adoption of tungsten in medical applications.
That optimism has left investors wondering whether tungsten investment is a good idea. Read on for a brief overview of tungsten supply and demand dynamics and ways to invest in tungsten.
What drives tungsten supply and demand?
Tungsten is mined all over the world, although as mentioned China is the world’s largest producer by far.
In 2022, the country mined 71,000 MT of the metal, far ahead of the 4,800 MT produced in Vietnam, the world’s second largest tungsten miner. China also leads in reserves with 1.8 million MT; Russia is in second place with 400,000 MT.
Typically, tungsten deposits are found near orogenic belts, which are areas where tectonic plates have collided to form mountains. These belts run through East Asia, the Asiatic part of Russia, the east coast of Australia, the Rocky and Andes mountains and the Alpide belt, which spans over 15,000 kilometers across Eurasia's southern margin.
One issue surrounding tungsten supply is the fact that the metal can be found in war-stricken countries like the Democratic Republic of Congo. For over a decade, the extraction of mineral resources in these areas has been linked to conflict, human rights abuses and corruption; for that reason, tungsten is known as a conflict mineral.
Some government bodies have put rules in place to ensure that companies disclose where the conflict minerals they use come from. For example, the EU has taken action to strengthen its conflict minerals rules.
In addition to being the world’s top tungsten producer, China is also the top tungsten consumer. Looking more closely at tungsten uses, it's clear many of them are correlated to the global economy.
For example, tungsten carbide, alloy and chemicals are used in the construction, electronics, mining and automotive industries; they can also be found in oil operations, as well as mineral exploration and mining. Mill products require tungsten too — these include tungsten rods, sheets, wires, light bulb filaments and electrical contacts; that said, tungsten’s use in light bulb filaments is declining due to new lighting technologies.
The chemical industry also consumes tungsten — tungsten compounds are used as lubricants, catalysts, pigments and enamels, as well as in electronics and for other electrical applications.
How to invest in tungsten stocks?
Investors who believe tungsten prices will rise in the future may want to enter the space today.
However, getting into the tungsten market can be a little difficult — as with many critical metals, getting direct exposure to physical tungsten is tricky as the metal does not trade on an exchange.
As a result, many market participants who are interested in tungsten investment turn to tungsten-focused companies. Most tungsten-producing companies are located in China, and are either privately owned or listed only on Asian exchanges; however, tungsten investing options do exist elsewhere.
A few options are listed below; all companies are listed on Canadian, Australian and London exchanges, and had market caps above $5 million as of September 15, 2023:
This is an updated version of an article originally published by the Investing News Network in 2013.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Fireweed Metals and Pivotal Metals are clients of the Investing News Network. This article is not paid-for content.
How to Invest in Magnesium Stocks
With important roles in healthcare and industrial applications, magnesium is worthy of investor consideration.
Not to be confused with manganese, which is also crucial for the development of a healthy body, magnesium, along with sulfur and calcium, is one of three secondary plant nutrients found in abundance on land and in water.
Necessary for over 300 biochemical reactions, magnesium is vital for healthy bones and good circulation. Magnesium oxide is produced when magnesium and oxygen combine, and is commonly used in heartburn and indigestion remedies.
Magnesium metal plays a key role in various industrial applications. The metal is 40 percent lighter than aluminum, but as strong as steel, making it crucial for strengthening aluminum alloys.
Magnesium alloys can be found in airplanes, automobile parts and in electronic devices that benefit from being lightweight. Magnesium is also used to remove sulfur when iron and steel are produced and to inoculate cast iron. Magnesium carbonate salts are primarily used in calcining, as well as in the agricultural and construction sectors.
Magnesium’s wide array of high-tech applications make it a compelling investment, but it's often difficult for investors to find information about the magnesium metal market. Here’s a quick overview of magnesium industry supply and demand dynamics, as well as a brief introduction to investing in magnesium.
What drives magnesium supply and demand?
Demand for magnesium has grown steadily in recent years, driven largely by the car parts industry, where magnesium is used for die casting. Specifically, magnesium can be found in components like car steering wheels and support brackets.
According to IndustryARC, the CAGR in the global magnesium metal market is expected to average 6.7 percent between 2022 and 2027 to reach US$7.5 billion. In the forecast period, the firm expects magnesium alloys to display stronger market growth over more traditional uses such as steel desulfurization. This is mainly due to environmental pressures as vehicle makers view alloys as a means of reducing vehicle weight and, in turn, emissions.
China is experiencing the greatest growth in market share versus the rest of the world. It is the largest global vehicle market, and the Chinese government has predicted that its automobile output will reach 35 million units by 2025.
In terms of supply, magnesium is the eighth most abundant element in the Earth’s crust and the third most abundant element dissolved in ocean water. Around 87 percent of magnesium production in the world comes from Chinese mineral deposits. Other major high-purity magnesium-producing countries include Israel and Russia; Russia also holds the highest magnesium compound reserves in the world at 2.3 million metric tons.
How to invest in magnesium stocks?
As with many other critical metals, there is no formal magnesium market. For that reason, it is difficult to gain exposure to the metal. However, one way to do so is to invest in magnesium mining companies.
A few options are below; all companies are listed on Canadian, US and Australian exchanges:
This is an updated version of an article originally published by the Investing News Network in 2011.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Inomin Mines and West High Yield Resources are clients of the Investing News Network. This article is not paid-for content.
How to Invest in Tantalum Stocks
With impressive ductility and the ability to resist heat and corrosion, critical metal tantalum is one of the five major refractory metals, as well as an important industrial commodity.
Due to its high thermal conductivity, about two-thirds of tantalum is used in electronic capacitors, a key component of cell phones and other modern technologies. Tantalum's high melting point and corrosion resistance are also important properties for use in superalloys. Additionally, because it causes no immune response in humans, the metal is used in surgical appliances as a replacement for bone, as a connector of torn nerves and as a binding agent for muscles.
The tantalum market can be difficult to understand, but because it is essential for electronics companies and other industrial end users, some consider the metal a compelling investment. Read on for a brief overview of tantalum supply and demand dynamics, and a look at how to invest in this critical metal.
What factors impact tantalum supply and demand?
Tantalum is rare, averaging only 2 parts per million in the Earth's crust. There are few mines solely dedicated to production of the refractory metal, meaning tantalum is mainly produced as a by-product; a significant portion of conflict-free tantalum products are mined as a by-product of lithium production.
The Democratic Republic of Congo (DRC) is the world's largest tantalum producer, putting out 860 metric tons in 2022, the latest year for which data is currently available. Brazil stands in second place, with tantalum-mining production reaching 370 metric tons that same year. Rwanda, Nigeria and China are other key tantalum producers.
The DRC is a major producer of many metals aside from tantalum, but for over a decade the extraction of these resources has been linked to conflict, human rights abuses and corruption. For that reason, tantalum is known as a conflict mineral; other common conflict minerals are cobalt, tin, tungsten and gold.
To curb the production of conflict minerals, some government bodies have put rules in place to ensure that companies disclose which mines the metals they use come from. In 2021, the EU strengthened its conflict minerals regulations, and in the US the Dodd-Frank Act outlines when and how companies must disclosure their use of conflict minerals.
Looking more closely at tantalum supply, demand for lithium has been impacted by China's cuts to electric vehicle (EV) subsidies. As mentioned, tantalum is a common by-product of lithium, and tantalum supply from lithium producers such as Talison Lithium and Pilbara Minerals (ASX:PLS,OTC Pink:PILBF) can be impacted when lithium demand is lower. However, China's government is now offering tax breaks for purchases of EVs in 2024 and 2025.
Aside from mine supply, there is also a developing tantalum-recycling market that does not rely on new tantalum ore production, but instead uses waste and scrap metal to fill its reserves.
In terms of the value of the tantalum market, Future Market Insights is forecasting a compound annual growth rate of 4.9 percent from 2023 to 2033, reaching US$519.3 million by the end of the forecast period.
"Due to factors including rising demand for tantalum in the production of electronic devices and gadgets, the tantalum market is growing," as per the firm. "On the other hand, increasing technological development and the replacement of aging power infrastructure, a rise in mining activities, along with long-term supply agreements, will further contribute by generating enormous opportunities that will fuel the expansion of the tantalum market in the anticipated timeframe."
How to start investing in tantalum?
While tantalum is essential for many products, the tantalum market is extremely small. Like most critical metals, it is not traded on a commodities exchange, and as a result investors can have a hard time gaining exposure to it.
One way investors can play the tantalum market is by looking at the mining industry and researching tantalum resource companies. Pure tantalum companies are few and far between because so little tantalum is produced and so much of the tantalum that is mined is produced by artisanal miners and small-scale mining.
What's more, many tantalum-producing companies are privately owned — Global Advanced Metals, which holds interests in the tantalum production at the Wodgina and Greenbushes operations, is one such company.
Allkem (TSX:AKE,ASX:AKE,OTC Pink:OROCF), which produces tantalum and lithium at its Western Australia-based Mount Cattlin operation, is an example of a large public company that produces tantalum.
Investors willing to dig a little deeper may be interested in tantalum exploration companies. Again, these companies are few and far between, and they often focus on more metals than tantalum.
That said, there are certainly some options to choose from, and many of them are appealing because they operate outside contentious areas like the DRC. Here are a few juniors with exposure to tantalum that are currently listed on the TSXV and ASX; all had market caps over $10 million in their respective currencies as of January 22, 2024:
This is an updated version of an article originally published by the Investing News Network in 2013.
Don't forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
How to Invest in Scandium Stocks
Scandium is a critical metal that is as strong as titanium, as light as aluminum and as hard as ceramic.
While it is more abundant than lead, mercury and all the precious metals, there are no pure scandium-producing mines. The rare earth element is often a by-product, produced from refining metals such as uranium.
Pure scandium metal rarely concentrates at higher grades alongside other metals, making commercially usable scandium deposits very rare. What's more, even when scandium is found at elevated levels, processing it can be difficult, leading to very few stable sources of this critical metal. Unsurprisingly, that means scandium has seen very little commercial adoption.
However, as John Kaiser of Kaiser Research has pointed out several times in recent years, there has been promising research on how scandium could be used in the future, with research continuing to develop.
"Hundreds of applications (have been) filed, many of them related to alloys with aluminum," he said in an interview with the Investing News Network. "This obscure metal is going to go ballistic in the next few years." Kaiser made that statement in 2015, and scandium has yet to go ballistic. But he still has hope for the metal, and it may yet have its day in the sun.
Read on to learn more about scandium production, players in the space and the metal's potentially bright future.
Where is scandium produced?
The first known large-scale scandium production was associated with Russian military programs. Details are lost to history, but Russians reportedly alloyed the metal with aluminum to make lightweight MiG fighter parts. Mining at these historic Russian production sites has ceased, but stockpiles of scandium oxide and scandium master alloy remain in Russia. These stockpiles are rumored to be dwindling, but continue to be offered for sale on the market.
Today, most scandium is produced as a by-product during the processing of other ores, such as uranium or rare earths; it can also be recovered from previously processed tailings. As a result, scandium supply is tied to the supply and demand dynamics of the metals it is produced with, making the metal's already tough-to-follow dynamics even more difficult to understand.
According to the US Geological Survey, scandium-producing countries include China, where the critical metal is a by-product of iron ore, rare earths, titanium and zirconium; and the Philippines, where it is a by-product of nickel. Scandium is also produced as a by-product of uranium in Russia, Ukraine and Kazakhstan.
Scandium resources have been identified in minerals-rich regions across the world, most notably in Australia, where a number of junior mining companies are working to develop scandium deposits in New South Wales. These include Scandium International Mining (TSX:SCY), which controls the Nyngan project; and Sunrise Energy Metals (ASX:SRL,OTCQX:SREMF), which holds the Sunrise project. In August 2023, Rio Tinto (NYSE:RIO,ASX:RIO,LSE:RIO) acquired the Owendale project from Platina Resources (ASX:PGM,OTC Pink:PTNUF). Once operational, the project is expected to produce up to 40 metric tons per year of scandium oxide.
In the US, a decades-long hiatus in domestic scandium production may be nearing the end — NioCorp Developments' (TSX:NB,OTCQX:NIOBF) Elk Creek critical metals project holds probable reserves of an estimated 36 million metric tons containing 65.7 parts per million scandium. In the fall of 2023, the company successfully demonstrated pilot-scale production of 1 kilogram of aluminum-scandium ingot.
It's worth noting that the US Department of Defense (DOD) is supporting the development of domestic scandium production. In 2022, the government body approved US$30 million in grants under the Defense Manufacturing Community Support Program. About US$4.7 million of the funding is earmarked for the SAE Government Technologies-led Supply Chain of Recovered Elements Consortium (SCORE).
“The first focus of SCORE will be the extraction of scandium and integration into the aluminum alloys supply chain, supporting domestic manufacturing through castings, welding, and additive (3D printing) pathways,” states a Department of Defense press release.
How is scandium priced and traded?
The global scandium market is small compared to most other metals, but it is growing. This is exemplified by global supply and consumption, which the US Geological Surveys estimates at 30 to 40 metric tons annually for 2023 compared to 15 to 25 metric tons annually in 2021.
The US Department of Commerce and the International Trade Commission do not have specific trading data for the metal. Further, there is no formal buy/sell market — scandium is not traded on an exchange and there are no terminal or futures markets.
Instead, the metal is traded between private parties, mostly at undisclosed prices and in undisclosed amounts. For that reason, understanding the precise volume of production and cost of scandium is difficult, and independent estimations are more relevant.
Production estimates are based on levels of trader activity and interest, as well as the knowledge that some traders deal in the critical metal from very small operations.
The estimates also include consumers believed to be sourcing their own scandium through small, controlled recovery operations, but don't consider amounts of the metal contained in the master alloy currently being sold from Russian stockpiles.
What is the outlook for scandium?
IMARC analysts expect the global scandium market to grow at a compound annual growth rate of 6.3 percent between 2024 and 2032. "There is a considerable rise in the demand for solid oxide fuel cells (SOFCs) for producing electricity. This represents one of the key factors strengthening the growth of the market," the firm notes.
Despite the lack of known, stable supply, scientists and engineers have been working hard to develop new products incorporating the metal. Scandium's potential in high-tech applications is well documented. Highlights of the metal's properties include:
- It can be used in the creation of stronger, corrosion-resistant, heat-tolerant and weldable aluminum alloys for lightweight aircraft and automobiles.
- Its outstanding electrical properties and heat resistance are valuable for solid oxide fuel cells.
- It has unique optical properties for high-intensity lamps.
A recent Kaiser Research report on scandium details the wide variety of end uses for scandium now and into the future, as well as where potential supply to meet that demand may originate.
Potential scandium oxide supply and demand.
Graphic via Kaiser Research.
As Kaiser has said, "There's an enormous latent demand for scandium if it ever became available on a primary, scalable basis."
In other words, the only barrier to accessing demand from a new family of high-performance aluminum materials and energy/lighting products is the lack of commercially viable larger-scale scandium production. Interestingly, Kaiser's work highlights two important scandium market events that may "have the potential to launch scandium demand growth over the next decade towards a 1,000 (metric ton per annum) market worth US$2 billion."
For one, Rio Tinto announced in 2020 that it has developed a route to recovery for scandium at its Sorel-Tracy facility in Québec, where it produces titanium slag from the Lac Tio iron-titanium deposit.
In mid-2021, Rio Tinto began commercial-scale operations at its new scandium oxide production facility. By mid-2022, the company had announced the production of its first batch of high-purity scandium oxide at Sorel-Tracy. "The Rio Tinto development is a game changer for the scandium sector," said Kaiser, who believes the increase in scandium production could help boost the sector.
Commenting on Rio Tinto's recent acquisition of the Owendale project from Platina, Kaiser said, "The surprise decision by Rio Tinto to purchase Owendale for USD $8 million up front can be interpreted as meaning that Rio Tinto does see scandium offtake demand growing but it will take quite a few years."
Secondly, Scandium International Mining filed an application in late 2019 for a patent protecting a method for recovering scandium and other metals from the waste streams of copper oxide leaching operations. In mid-2020, the company announced that copper raffinate tests showed its patent-pending process could recover enough scandium to match the supply being added to the market by Rio Tinto.
As of October 2023, Scandium International Mining had broken ground on development work at the Nyngan project, which has scandium as a primary metal. "Given our ability to produce 38 tons annually under our mining license, we believe the Nyngan deposit is the most advanced Scandium project and will be one of the first projects to be developed when the market demand for Scandium becomes more mature," states a press release. A final investment decision is dependent on the company securing offtake agreements and strategic partnerships, which management says remain under discussion.
This is an updated version of an article originally published by the Investing News Network in 2014.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
