Yesterday we discussed why companies like Molycorp and Lynas may continue to struggle given the price performance of some key light rare earths. This second post covers the differences in the price performance of the heavy rare earths.
Heavy rare earths have a bright future
The market for heavy rare earth metals continues to grow, particularly in the areas of LCD displays and MRI technology but also in fiber optics and defense applications, which include products like smart missiles.
At the same time, the primary source country (yes, China) has seen both its labor rates increase and its environmental compliance costs rise. In essence, these factors place a floor under heavy rare earth metal prices and actually provide an upward sloping bias, as these costs are expected to continue to rise.
Where does that leave the rest of the world?
Our friends over at Technology Metals Research publish the most comprehensive index of junior mining projects containing rare earth metals. The Advanced Rare Earth project list appears here.
The United States and Canada currently have approximately four nearer term heavy rare earth projects: Rare Element Resources (REE) – Bear Lodge project, Ucore Rare Metals (UCU.V and UURAF – Canadian) – Bokan project, Texas Rare Earth Resources Corp (TRER:OTCQX) – Round Top project, and the Matamec (MAT.V) – Kipawa project.
Of the projects in the US, only Texas Rare Earth Resources sits on private and state-owned lands (as opposed to federal), meaning it has a shorter timeline to its permitting process than the other US projects. The company also recently added noted rare earth consultant, Jack Lifton to its Board of Directors (to our knowledge, Jack has never joined a rare earth board of directors). We interpret that as a seal of approval.
However, Ucore Rare Metals recently received its United States Forestry Service permitting approval and will now proceed with its late stage drill program, according to the Ucore website. And Rare Element Resources recently signed a Memorandum of Understanding (MOU) with the US Forest Service that will allow the company to continue with an Environmental Impact Statement (also a later process step toward moving into full production).
In the meantime, we will continue to monitor price changes and discuss key heavy rare earth projects in development.