Rare earth elements mining investment: It is not all about China

Abstract China was in the past the main driver when analysing rare earth prices and their market, since it commercialised around the 90% of the world's supply. After a cut in its exports during 2010 and 2011, rare earth prices dramatically spiked. The world's reaction to this fact was the development of a huge amount of mining projects outside China, many of whom failed when prices fell again. Nevertheless, several of them survived. This paper analyses in first place the future trend of rare earth elements prices in order to contrast the stable tendency forecasted by different providers of price assessments and market data. Secondly, it studies in deep five ready-to-go rare earths mining projects around the world: Nechalacho Project (North-west Territories, Canada); Zandkopsdrift Project (Northern Cape, South Africa); Bear Lodge Project (Wyoming, USA); Kvanefjeld Project (Southern Greenland); and Dubbo Zirconia Project (New South Wales, Australia). The main purposes being to give an “order of magnitude” both technical and economic of this specific mining industry; to provide a tool for investors, potential investors and professional advisers addressing rare earth mining investment analysis; and to facilitate the development of preliminary economic assessments of future rare earth mining projects. These aims will also help to fight against several systemic problems of the rare earth market: lack of trust, market opacity, and short versus long-term approaches and profit orientation. Conclusions clearly show that despite the complexity of rare earth mineral deposits and the fact that their mining operation usually includes different by-products, the evaluation of rare earth mining investments does not present much more difficulty than in the case of single element mining projects. Forecasted prices used in these economic studies are the Achilles’ heel of nowadays rare earth mining investment analysis. Finally, although differences in demand of different rare earth elements will make really difficult to achieve “a priori” a market in balance, the five studied projects are anticipated to cover approximately the third part of the total rare earth consumption in the world. When their dysprosium oxide production was analysed, the resulting proportion for the most critical rare earth element based on its role in clean energy together with its biggest supply risk was almost the same, something optimistic regarding the achievement of a balanced market outside China.