Guest contributor Rahul Jalan is a Chennai-based advisor in Rare Earths for Beroe Consulting India Pvt Ltd. Jalan tracks the global rare earth supply chain and analyzes global procurement developments to help develop state-of-the-art procurement solutions for the company. Beroe specializes in providing procurement intelligence and advisories for a broad swath of industries.
Continued from Part Two.
Update on Upcoming Rare Earths Projects
Lynas’ advanced materials plant in Malaysia is awaiting approval to initiate its Phase 1 production in early 2012, as it is facing stiff opposition from activists and politicians due to concerns about its radioactive waste disposal system.
The company has finally applied for a temporary license to operate, which, if approved, will be valid for two years. The decision on permanent license will be taken by the Malaysian government in Q3 2012.
Molycorp USA has secured 78 percent of its Phase 1 rare earth production at Mountain Pass and has also received permission from the US Bureau of Land Management to conduct exploratory drilling operations near its Mountain Pass mine. The plant is all set to start its production in September 2012.
The Bottom Line
The recent export allocation for 2012 has had no immediate negative impact on rare earth consumers; the increase in the export quota may lead to a significant drop in rare earth prices, to reach levels witnessed in 2009. The second export quota allocation, surcharges levied on rare earth prices, and upcoming projects outside China are major events to watch out for in the future.
The most-exported rare earth products in the recent past are lanthanum and cerium-based materials; these materials have been replaced due to their high prices. Thus, the prices of rare earths are likely to drop to 2009 levels due to an increase in the export quota and upcoming new capacities outside China.
(Ed. note: exactly when this will happen, of course — if it does — is anyone’s guess, as production start dates are still far off.)