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The latest prices, news and events from across the global rare earths market.
China has set up a special fund derived from its central government budget in order to develop and upgrade its rare earth sector and support producers hit by weak prices.
According to a press release from the Chinese Ministry of Commerce, the fund will be used to help local Chinese governments crack down on illegal exploration and mining, and to assist rare earth companies in upgrading their equipment and becoming more environmentally friendly. It will also be used to research and develop high-tech applications.
Rare earth miners are set to receive a subsidy of 1,000 yuan (US$160) for every tonne of rare earth oxides (REOs) that they produce, while smelters are set to get 1,500 yuan (US$240) per tonne.
The ministry will also offer financial support to help companies upgrade their production facilities and fund their research and development projects.
Toyota issues third payment for stake in Canadian rare earth project
Toyotsu Rare Earth Canada, a subsidiary of Toyota Tsusho (TSE:8015), has paid Matamec Explorations (TSXV:MAT) C$263,887 — the third in a series of payments for its committed equity of 49 percent undivided interest in the Kipawa heavy rare earth element (HREE) deposit. Matamec confirmed the payment in a press release on Tuesday.
As per the terms of the agreement, the Japanese-owned subsidiary paid C$8.5 million for a 25 percent undivided interest in July. In order to secure the remaining 24 percent, Matamec agreed to receive successive payments to reach the agreed total. The second payment was issued last month.
The company’s press release notes that to date, Matamec has received C$10,147,550 of the maximum C$16 million for the completion of a definitive feasibility study on the deposit, which is expected in the second quarter of 2013.
“This agreement secures a heavy REE supply for the production and marketing of hybrid vehicles and adds significant tangible value to Matamec,” said Andre Gauthier, president and CEO of Matamec.
Applications for Chinese rare earth export quotas begin
China’s Ministry of Commerce has released standards and application procedures for its domestic rare earth sector for 2013.
The ministry stated that only companies that exported material between 2009 and 2011 are eligible to apply for the new export quotas.
It also confirmed that REE producers will need to undergo and pass an environmental inspection by China’s Ministry of Environmental Protection to be eligible, and that raw materials will need to have originated from licensed rare earth mines.
Meanwhile, REE traders are required to have registered capital of at least $8.02 million and to have exported rare earths between 2009 and 2011 to continue trading. Chinese rare earth exporters noted that this year’s application procedure is stricter than in previous years.
All relevant material must be submitted to the Ministry by December 14.
Market round-up
Sources said that higher bids from major companies, coupled with production halts at a number of plants, are likely to keep rare earth prices flat over the coming weeks, according to a report by Metal-Pages.
Little improvement has been seen in praseodymium/neodymium demand. Sources cited by Metal-Pages stated that prices of $67,452/tonne for 99 percent praseodymium/neodymium metal are being accepted by some buyers and suppliers. Prices of $72,241/tonne have also been reported.
Lanthanum oxide demand weakened as buyers remained hesitant due to volatile market conditions. Some suppliers are said to be offering $7,706/tonne for 99 percent lanthanum oxide; however, contract prices of $7,225/tonne have also been accepted.
Cerium oxide remained flat throughout the week and is currently trading at $7,546/tonne.
Company news
Peak Resources (ASX:PEK,OTCQX:PKRLY) completed the scoping study and preliminary economic assessment( PEA) on its Ngualla rare earth project in Tanzania.
The assessment revealed a base case pre-tax net present value of $1.571 billion, an internal rate of return of 53 percent and a low capital cost requirement of $400 million, according to a company press release.
Located in Southwest Tanzania, the Ngualla project is a recent discovery with a maiden mineral resource of 170 million tonnes at 2.24 percent REO. That makes it the fifth-largest rare earth deposit in the world outside of China.
Montero Mining and Exploration (TSXV:MON) provided an update on testing done at its Wigu Hill rare earth project in Tanzania.
It confirmed that preliminary test results achieved a recovery of 77 percent REEs with significantly reduced reagent consumption compared to the prior three-stage hydrometallurgical leach process.
The company is now examining the cost benefit of a revised flow sheet aimed at lowering the cost of extraction of REEs from the bastnaesite-rich carbonatite material at Wigu Hill.
Ucore Rare Metals (TSXV:UCU,OTCQX:UURAF) announced that it received strong results from the PEA related to the Dotson Ridge zone of its Alaskan Bokan Mountain HREE property.
Highlights of the PEA include a net present value of $577 million at a 10 percent discount rate, pre-tax, an internal rate of return of 43 percent and a payback period of only 2.3 years. Average total rare earth recoveries were recorded at 81.6 percent.
Ucore claims that with a capital cost of $221 million, including a complete onsite REO separation plant and a contingency provision in the amount of $25 million, the project is among the “lowest capital outlays in the rare earth mining sector.”
Securities Disclosure: I, Adam Currie, hold no direct investment interest in any company mentioned in this article.