Com­mod­ity Fo­cus: NdPr

Neodymium and praseodymium – or NdPr for short – has been la­belled one of the “big­gest blind spots of to­day’s global com­mod­ity mar­ket”, but in­ter­est is be­gin­ning to pick up for rare earth el­e­ments with an­a­lysts fore­cast­ing strong de­mand to come out of Chi

The Australian Mining Review - - CONTENTS - ELIZ­A­BETH FABRI

IT’S in our mo­bile phones, the hard disc drive of our lap­tops and the NdFeB mag­nets in the elec­tric ve­hi­cles soon to be hit­ting our roads – yet there is still a level of re­straint within the in­vest­ment com­mu­nity to­wards NdPr.

To date, China has been the big­gest pro­ducer of the rare earths ma­te­rial.

But an emerg­ing group of ASX-play­ers were now get­ting at­ten­tion, as the NdPr price in­creased on the back of the fast-grow­ing elec­tric ve­hi­cle sec­tor.

ASX-listed Ly­nas Cor­po­ra­tion, which owns and op­er­ates the Mt Weld mine right here in Aus­tralia, is one miner in the spot­light.

The only pro­ducer and pro­ces­sor of rare earths cur­rently out­side of China, Ly­nas pro­duced 1447 tonnes of NdPr in the June quar­ter.

Ly­nas chief ex­ec­u­tive Amanda La­caze said the miner’s pre­vi­ous debt sit­u­a­tion meant it needed to sell all of its NdPr prod­uct for cash im­me­di­ately, but re­cent mar­ket dy­nam­ics en­abled the com­pany to hold back 100 tonnes of in­ven­tory “rather than sell at cur­rent prices”.

Ara­fura Re­sources and Peak Re­sources – cur­rently seek­ing fi­nance to develop their re­spec­tive Nolans and Ngualla projects – also had their name up in lights.

In 2017, Peak Re­sources Sales, Mar­ket­ing and Busi­ness De­vel­op­ment gen­eral man­ager Michael Pras­sas pub­lished a white pa­per ti­tled ‘ Ndpr the big­gest blind spot in the global com­mod­ity mar­ket’ which aimed to ed­u­cate po­ten­tial in­vestors about NdPr, ex­plor­ing the fun­da­men­tals of the mar­ket and the com­pany’s out­look.

Mr Pras­sas said he was bullish on the mar­ket for NdPr over the mid-term.

“I be­lieve NdPr is the big­gest blind spot in the global com­mod­ity mar­ket and that the next decade will pro­vide all the ev­i­dence to sup­port this as­sump­tion,” Mr Pras­sas told The Aus­tralian Min­ing Re­view.

“Dur­ing 2017 China al­lo­cated bil­lions of USD to NdPr rel­e­vant ap­pli­ca­tions and their re­lated in­fra­struc­ture and ap­pli­ca­tions, such as, in­dus­trial parks, wind farms, high speed mag­net trains and elec­tric ve­hi­cle de­vel­op­ment.

“Many peo­ple are un­aware that nine out of 10 mo­bil­ity ap­pli­ca­tions that use a lithium-cobalt-graphite bat­tery are also us­ing an NdPr per­ma­nent mag­net mo­tor.

“With each of th­ese mo­tors rep­re­sent­ing a min­i­mum in­cre­men­tal de­mand of 1kg NdPr ox­ide, the math speaks for it­self.”

Mr Pras­sas said he ex­pected that by 2020 the mar­ket would see a very dif­fer­ent rare earth pric­ing land­scape than to­day.

“By 2025 all car man­u­fac­tur­ers will have a com­pre­hen­sive and com­plete new en­ergy ve­hi­cle range in the mar­ket, equiv­a­lent to the diver­si­fi­ca­tion of the in­ter­nal com­bus­tion engine prod­uct port­fo­lio to­day,” he said.

“At that time I an­tic­i­pate that the elec­tric ve­hi­cle seg­ment will rep­re­sent 15-25 per cent of the global an­nual pas­sen­ger car sales, equat­ing to ap­prox­i­mately 15-25 mil­lion elec­tric ve­hi­cles sold ev­ery year.

“Th­ese pro­jec­tions are also sup­ported by the data which I con­tin­u­ously col­lect from the lithium sec­tor as well as the tracked over­all com­mu­ni­cated in­stalled in­dus­trial lithium bat­tery man­u­fac­tur­ing ca­pac­ity.”

Ara­fura Re­sources man­ag­ing di­rec­tor Gavin Lock­yer said he was of the view China’s do­mes­tic NdPr con­sump­tion would in­crease by more than 30 per cent in the next five years as it pur­sued clean en­ergy ob­jec­tives and global lead­er­ship in elec­tric ve­hi­cle man­u­fac­tur­ing.

“China has been the dom­i­nant pro­ducer of NdPr but an­a­lysts have re­cently be­gun pre­dict­ing that the coun­try will be­come a net im­porter as soon as the early 2020s as it cracks down on il­le­gal min­ing and closes un­sus­tain­able op­er­a­tions,” Mr Lock­yer said.

“Adding to the pic­ture, US leg­is­la­tors last month passed the John S. McCain Na­tional De­fense Au­tho­riza­tion Act into law as part of a wider ini­tia­tive to re­duce the coun­try’s re­liance on for­eign-sourced crit­i­cal min­er­als and ma­te­ri­als.

“Sec­tion 871 of the bill pre­vents the pur­chase of rare earth mag­nets from pro­hib­ited coun­tries in­clud­ing China by the Depart­ment of De­fense.

“This move is widely re­garded as a boost to mag­net pro­duc­ers out­side of China and ad­vanced stage NDPr de­vel­op­ment com­pa­nies, with the po­ten­tial to sup­port higher NdPr prices as the mar­ket ad­justs to a pos­si­ble short­fall in sanc­tioned mag­net pro­duc­tion.”

Mr Lock­yer said Nolans had been Ara­fura’s pri­mary fo­cus since it listed on the ASX back in 2003.

“From those very early days, the fo­cus on rare earths, and in par­tic­u­lar NdPr, was driven by the be­lief that those ma­te­ri­als would be­come crit­i­cal to de­vel­op­ing tech­nol­ogy, which is ex­actly what has tran­spired,” Mr Lock­yer said.

“Key chal­lenges for Ara­fura as an emerg­ing sup­plier of NdPr in­clude ed­u­cat­ing the mar­ket on the role of rare earth mag­nets in elec­tric ve­hi­cle man­u­fac­ture and a range of other tech­no­log­i­cal ap­pli­ca­tions and at­tract­ing suf­fi­cient cap­i­tal to bring the Nolans Project into op­er­a­tion.

“As Aus­tralia’s only cur­rent rare earths pro­ducer, Ly­nas Cor­po­ra­tion, has found, de­vel­op­ing a rare earths project can be a cap­i­tal-in­ten­sive process.

“For this rea­son, it is dif­fi­cult to see a ma­jor sup­ply re­sponse ma­te­ri­al­is­ing as the mar­ket moves into short­fall in the 2020s.”

Im­age:Ara­fu­raRe­sources.

Ground­wa­ter drilling at the Nolans NdPr project in the North­ern Ter­ri­tory.

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