Rare earths market has entered in a critical situation where uncertainty is looming around the future of some high probable rare earths mining projects. Chinese overflow in supply and plummeted rare earths prices have remained some major culprits behind the recent market distortions. All in all, they are also to a great extent responsible for the recent bankruptcies of Molycorp and Great Western. Moreover, the falling rare earths prices have also led to an indefinite hold on various mining projects.
The lustre in the rare earths market has been gradually vanishing, and miners are getting difficulty to lure investors. Some potential rare earths miners have also changed their names recently and ditched the once lucrative mining terms ‘rare earths’ and ‘rare metals’ from their corporate names. For instance, Avalon Rare Metals is now Avalon Advanced Materials and Texas Rare Earth Resources becomes Texas Mineral Resources.
Indeed factors such as cash costs, ratios of heavy and light rare earths elements, infrastructure, processing facilities, end users, rare earths prices etc will confront the viability of rare earths projects. Yet, above all them, it is ‘China’ which any potential investor needs to add in their profit equation to avoid failure.
Major end users are also exploring new ways to minimise the use of rare earths in their products. Japanese automaker Honda co-developed a hybrid battery without the use of heavy rare earths aiming to reduce reliance on Chinese rare earths. Stockpiling of rare earths is another option, albeit conventional, for end users to avoid any disruptions in supply, though it will be a menace to take any position without knowing the future price direction.