Rare Earths MMI: House representatives introduce bill proposing tax credit for domestic rare earth magnet production

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The Rare Earths Monthly Metals Index (MMI) surged by 30.6% for this month’s reading, as this week a pair of House representatives — a Democrat and Republican — introduced legislation that proposed a tax credit for domestic production of rare earth magnets.

August 2021 Rare Earths MMI chart

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Representatives introduce bill to offer tax credits for rare earth magnet production

Earlier this week, House Reps. Eric Swalwell (CA-15) and Guy Reschenthaler (PA-14) introduced the Rare Earth Magnet Manufacturing Production Tax Credit Act.

Currently, no domestic production of rare earths magnets exists. The legislation proposes a tax credit to incentivize production of the rare earths magnets in the U.S.

“These magnets are used in a wide variety of applications necessary for our modern economy, such as computer hard disks, cell phones, and MRIs,” a press release on Swalwell’s website stated. “They are also critical for certain for clean energy uses.  For example, 93 percent of all electric vehicles contain a powertrain driven by one of these magnets.”

The bill proposes a $20 per kilogram production tax credit for magnets that are manufactured in the United States. Furthermore, it proposes a $30 per kilogram for magnets that are “both manufactured in the United States and for which all component rare earth material is produced and recycled or reclaimed wholly within the United States.”

Chinese rare earths exports dip in July

China’s exports of rare earths totaled 3,955 tons in July, the General Administration of Customs reported.

The export total marked a slight drop from June’s 4,012 tons.

However, through the first seven months of the year, rare earth exports rose 22.2% year over year to 27,281 tons. The value of those exports surged by 72.6% (in U.S. dollar terms).

Lynas releases quarterly production report

Australia’s Lynas Rare Earths Ltd., the largest rare earths firm outside of China, recently released its production and financial results for the quarter ending June 30, 2021.

The firm reported quarterly sales revenue of A $185.9 million, up from A $110 million the previous quarter.

Lynas also recorded rare earth oxide production of 3,778 metric tons, down from 4,463 metric tons the previous quarter. NdPr production totaled 1,393 metric tons, up from 1,359 metric tons the previous quarter.

“NdPr market prices softened throughout the quarter, representing a slight correction on the increases in previous months,” CEO Amanda Lacaze said in the quarterly report. “Prices have strengthened again during July. The average China Domestic Price for NdPr was US$69.9/kg for the quarter. Demand for catalyst from the automotive and the fluid catalytic cracking (FCC) sectors is back to pre-COVID levels, which we see continuing in the near future. However, we remain alert to the effect the pandemic can have on end product demand, logistics and industrial supplies.”

In addition, Lynas touted ongoing work on its Lynas 2025 projects, including the rare earths processing facility in Kalgoorlie, Western Australia, and the integrated rare earths processing facility proposed for the U.S.

“Detailed engineering and design work for the Heavy Rare Earths (HRE) facility was submitted to the U.S. Government in line with U.S. Department of Defense (DoD) Phase 1 milestones,” Lacaze added. “The DoD is now conducting a merit evaluation of the submission.”

Lynas announces new exploratory drilling at Mt. Weld

In other Lynas news, the firm announced it had executed 1,020 meter deep core drilling at its Mt. Weld open pit mine.

“The exploration drilling program was designed to expand the ore body knowledge of Mt Weld by understanding the primary Rare Earth Elements mineralisation and the geology and structure of the carbonatite host rock,” Lynas reported. “The program was partially funded by WA government under the Exploration Incentive Scheme (EIS), 2020-2021.”

Lynas completed the drilling in June.

“We are excited about this deep exploration drillhole into the Mt Weld carbonatite,” Lacaze said. “The world will need increasing supplies of Rare Earths for many years to come. The Mt Weld orebody is recognised as one of the richest known deposits in Page 2 of 13 the world. Expanding our knowledge of this ore body is an essential part of ensuring Lynas continues to grow as a reliable supplier to global markets.”

Lynas said it observed “varying concentrations of coarse grained and fine grained REE mineralisation” in multiple domains during core logging.

Actual metal prices and trends

The Chinese yttrium price dropped by $0.02 t0 $33.28 per kilogram as of Aug. 1. Meanwhile, the Chinese terbium oxide price surged by 30.5% to $1,304 per kilogram.

The neodymium oxide price surged by 32.0% to $97,121 per metric ton.

The europium oxide price fell slightly to $30.18 per kilogram. The dysprosium oxide price rose by 13.2% to $412 per kilogram.

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