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According to Palisade Research, rare earths have been experiencing a ‘supply crunch’. This viewpoint is also supported by UBS, the largest Swiss banking institution in the world, which recently released an bullish report on rare earth elements (REEs).
According to Palisade Research, rare earths have been experiencing a ‘supply crunch’. This viewpoint is also supported by UBS, the largest Swiss banking institution in the world, which recently released an bullish report on rare earth elements (REEs).
According to the report, covered in a recent Palisade Research article, REEs play a key role in permanent batteries, which are used in electric motors. The global rise in electric vehicle production and use has thus put pressure on the supply of REEs. This goes hand in hand with the growth of the wind turbine market, where REEs also play a significant role.
Currently, China produces 85 percent of the world’s rare earths. With looming trade disputes between China and the US, China has a very strategic holding on a vital group of materials for the growing clean energy market. This distribution of materials, however, is also what puts the rare earths market at risk for a supply deficit by 2021, says UBS.
According to Palisade Research, the upcoming supply deficit spells opportunity for rare earth plays outside of China. This includes Medallion Resources (TSXV:MDL, OTCQX:MLLOF), a company focused on processing monazite sand, a byproduct of heavy-mineral-sands processing, which hosts 50 to 60 percent REEs. As it is not a mining operation, this gives Medallion little to no exploration risk as an REE deal. As part of their business model, Medallion is working to secure processing partnerships for the supply of monazite sand.
The company also has “a non-exclusive commercial agreement with Rare Earth Salts Separations and Refining LLC (RES) to produce, market and share revenues from the sale of finished rare-earth products. Medallion will produce and supply rare-earth concentrate to Rare Earth Salts, who will in turn, separate and refine it into marketable rare-earth oxides.” As they refine the process, RES has plans to expand its production capacity, with an output goal of 3,500 tonnes per year of rare earth oxide by 2022.
To read the full article, written by Palisade Research contributor Adem Tumerkan, click here.
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