It's a complicated business, but the geologist has a simple recipe for successful rare earth mining discusses some exciting projects with all the right ingredients and a technique that makes processing both profitable and environmentally friendly.
Tee co-founder of Technology Metals Research LLC, gives us the lay of the land in the rare earth sector. Many variables are shaping this developing market, and data makes the difference in determining viable investments.
The latest Chinese data indicates that rare earth exports are continuing to drop by more than half compared to last year's output. In April, China exported only 1,819 tons of rare earths, a shortfall of 53% from the previous year.
Never has there been a divergence between the price of the rare earth ores and the developing rare earth miners as there is now. The current commodity correction has caused the high flying rare earth sector to plunge to critical support levels.
The real question is how much of the higher costs of rare earths can be absorbed by the Chinese supply chain before increases in cost for value-add rise, to where a competitive supply chain can be economic in a foreign (to China) country.
It is easy to accuse the Chinese of using rare earth quotas in tactical diplomacy. However, the fault lies not in the stars but in ourselves. We closed our rare earth production facilities years ago - in effect forfeiting the very means of manufacture.
There is no doubt that Chinas's growth cannot be sustained by domestic production of natural resources. This is obvious to Chinese corporate procurement officers. It is only now becoming apparent to Chinese domestic institutional investors.