Last weekend I posted an article on the issue of China becoming a net importer of rare earths by 2015 (in a nutshell: it’s possible that this might occur for heavy rare earths). I mentioned some numbers being used by Dr. Zhanheng Chen, Director of the Academic Department of the Chinese Society of Rare Earths (CSRE), in a presentation made on his behalf in Vancouver in January.
In the presentation, Dr. Chen forecast a total supply in 2013 of 87 kt from China, out of a total 134 kt of global supply. He also forecast a total global supply target after 2015, of 278 kt of rare earths, with the target for China’s production set at 100 kt of rare earths and 178 kt from other sources. In some quarters, this figure of 278 kt appears to have been misinterpreted as being a demand forecast from Dr. Chen, but this is not the case.
In January 2011, The Journal of Rare Earths published a paper by Dr. Chen [1], in which he details the origin of his projected supply targets for 2015 and beyond, for producers and potential producers outside of China (my thanks to Eamon Keane for making me aware of the paper). Here is a breakdown of his numbers:
| Project | Location | Company | Current capacity (ktpa TREO) | Target capacity after 2015 (ktpa TREO) |
| Mountain Pass | USA | Molycorp | 3 | 40 |
| Kamasurt | RUS | Lovozersky Mining | 3 – 4.4 | 15 |
| Orissa / Tamil Nadu / Kerala | IND | Indian Rare Earths | 0.1 | 10 |
| VNM | Toyota / Sojitz / Govt. Vietnam | 1.8 – 2 | > 2 | |
| Buena Norte | BRA | Indústrias Nucleares do Brasil | 1.5 | > 1.5 |
| TOTAL | 9.5 – 11 | > 68.5 | ||
| Project | Location | Company | 2011-2013 capacity (ktpa TREO) | Target capacity after 2015 (ktpa TREO) |
| Mount Weld | AUS | Lynas Corp | 10.5 | 21 |
| Steenkampskraal | ZAF | Great Western Minerals Group / Rareco | 3 | 5 |
| KAZ | Sumitomo / Kazatamprom | 3 | 15 | |
| Dong Pao | VNM | Toyota / Sojitz / Govt. Vietnam | 0.3 | 5 |
| Orissa | IND | Toyota / Indian Rare Earths | 5 | 10 |
| Pitinga | BRA | Mitsubishi / Neo Material Technologies | 0.5 | 1 |
| Dubbo | AUS | Alkane Resources | 2.6 | 6 |
| TOTAL | 24.9 | 63 | ||
| Project | Location | Company | 2011-2013 capacity (ktpa TREO) | Target capacity for 2015 (ktpa TREO) |
| Nechalacho | CAN | Avalon Rare Metals | 0 | 5 |
| Strange Lake | CAN | Quest Rare Minerals | 3 | 5 |
| Bokan-Dotson | USA | Ucore Rare Metals | 0 | 0 |
| Kipawa | CAN | Matamec Explorations | 0 | 0 |
| Nolans Bore | AUS | Arafura Resources | 10 | 20 |
| Hoidas Lake | CAN | Great Western Minerals Group | 3 | 5 |
| Bear Lodge | USA | Rare Element Resources | 0 | 0 |
| Kutessay II | KGZ | Stans Energy | 0 | 0 |
| Kvanefjeld | CAN | Greenland Minerals & Energy | 0 | 10 |
| TOTAL | 13 | 40 | ||
| Category | Near-term capacity (ktpa TREO) | Target capacity for 2015 & beyond (ktpa TREO) |
| Current non-Chinese sources | 9.5 – 11 | > 68.5 |
| Non-Chinese sources preparing to come on-stream | 24.9 | 63 |
| Other potential non-Chinese sources | 13 | 40 |
| TOTAL | 47.4 – 48.9 | > 171.5 |
We can see here then, that Dr. Chen is projecting a non-Chinese supply target of > 171.5 kt for 2015 and beyond – effectively a “steady-state” rate of supply. This is in line with the 178 kt projection for target supply from outside of China, in his Vancouver presentation. We can also see that it does not include sources of supply, listed in Table 3 above, that would add to this number once they come on-stream.
Dr. Chen goes on to say that at present, around 50 kt of rare earths are required to meet demand outside of China, and that with a growth rate of 15% in demand, the total demand from outside of China will be at least 80 kt by 2015 (assuming continued global economic growth). In his December 2010 presentation to the Hague Center for Strategic Studies, Dudley Kingsnorth projected total demand numbers for 2015 of 185,000 t ± 15% total rare earths. Mr. Kingsnorth’s numbers were further broken down to show a forecast 74 kt ± 15% of demand from outside of China in 2015 – numbers very much in line with Dr. Chen’s own forecast in his Vancouver presentation, and the numbers in his Journal of Rare Earths article.
We can certainly debate and question the specific projections that Dr. Chen used in his paper; what’s pretty clear though is that when he uses the figure of 278 kt for total rare earths in 2015 and beyond, he is referring to projected supply, not demand.
References:
1. Z Chen, ‘Global rare earth resources and scenarios of future rare earth industry’, Journal of Rare Earths, Vol. 29, No.1, Jan 2011, p1.
Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of, nor a consultant to any of the companies listed above, or any other publicly traded junior-mining company.
Your articles are really helpful and I turn to you first when looking for the latest in REEsearch. (Sorry I couldn’t resist.)
Gareth – Where any tables presented with a breakdown of HREO and LREO for current period and projections for 2011-2013/2015 by project/company? I am trying to get a handle on a HREO investment strategy using data that includes the Russian, Brazilian, Indian, Mongolian, and Vietnamese projects.
As always, thanks for all the articles you publish.
Gareth,
love the information that you have been distributing on TMR of late, in what seems to be a very unbiased opinion. keep up the good work.
one supply stream that i did not see in the numbers in the info you presented from Dr. Chen’s presentation was REE’s from recycling.
reports that i have read suggest that around 3000 t of REE’s will be available also at 2015.
but i’d like to querry, do you think that a reasonable estimate, or could one presumably figure it to be somewhat more considering developments that are being implemented mainly in Japan, but are being considered also in the EU and somewhat in the US ?
and if i may be at liberty to also ask on the demand side.
Japan is conducting research to reduce Dysprosium by 40% in REE applications, the Austrians recently claimed a breakthrough in Neodymium magnet compostion, GE is working along with the DOE to reduce REE’s in wind turbin construction by 30%.
so i guess what i’m asking do you forsee a possible magnet technology breakthrough that could help alieveate the proposed upcoming shortage
in REE’s like Nd and Dy or at least to help stabilize the demand and can recycling, alibet small, be a contributing factor also?
Hi Gareth,
Is Kvanefjeld / CAN / Greenland Minerals & Energy located in Canada or Australia? Thanks.
@Optionsgirl: :-) :-)
@Brian: no, they were not – the numbers were for total REOs only. However, I am working on a new dataset at the moment, that will hopefully answer your specific questions, regarding such projections. Hope to have it done in the next week or two.
@charles wendell: that’s a great question, and my sources tell me that if we include the scrap materials that get put back into the mix at the metal and alloy producers, we’re probably already heading towards the 3,000 t mark just this year. I envisage the number to increase by 2015. I’ve seen some folks estimate that it could be as high as 10% of production, and although I think this is a little ambitious, it’s not impossible.
As for Dy in RE magnets etc – I see a realistic possibility of reduced material intensity for HREE usage in magnets, but I am not optimistic when it comes to LREE or overall REE usage reduction. In addition, per Jevon’s Paradox, any such reduction of usage per unit, could lead to greater adoption of those technologies as a whole, thus canceling out any benefit, to the overall supply situation.
@Marvin Leonardo: the Kvanefjeld project itself is located in Greenland; Greenland Minerals & Energy is listed on the Australian Stock Exchange.
Interesting article. Confirms Chinese limiting REE exports. Changes dramatic. Price changes dramatic. Despite 9 fold increase in price year over year, China selling less. Why?
Perhaps listening to the Chinese REE experts helps?
Zhang Anwen a leading Chinese government advisor and Deputy Secretary General of Inner Mongolia Rare Earth Guild who in Beijing conference Spring 2010 said:
“Foreign countries should calmly and logically think about this and develop their own mines for their own needs. Our (China) resources are diminishing and we (China) need these minerals for our own use.”
(Minutes 2:46 to 3:20 in the 6:19 minute video)
http://www.youtube.com/watch?v=MHs2lGsqFKU&p=19D44B68A08E1850
Reuters article today 22 March 2011:
China Rare Earth Prices Explode as Export Volumes Collapse
Published: Tuesday, 22 Mar 2011 | 3:51 AM ET Text Size
By: Reuters
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China’s exports of rare earth metals burst through the $100,000-per-metric ton mark for the first time in February, up almost ninefold from a year before, while the volume of trade stayed far below historical averages.
Stringer | AFP | Getty Images
China’s squeeze on rare earths, which are used in a wide range of hardware including precision-guided weapons, hybrid car batteries and iPads, has forced prices up dramatically since July last year, when each metric ton fetched a mere $14,405 on average.
The apparent price rises have averaged $10,000 per metric ton per month but accelerated in February, galloping ahead by $34,000 per metric ton, according to Reuters calculations based on data from China’s Customs office.
Last month each metric ton of exports was valued at $109,036, including the cost of insurance and freight, almost half as much again as the average value in January.
The explosion in export values has coincided with a collapse in volumes coming out of China, the source of almost all the world’s rare earth supplies, which has cut export quotas of the 17 rare earth metals and raised tariffs on exports.
China’s actions have infuriated its trading partners but lifted the shares of the few mining and prospecting companies outside China that are well-placed to capitalize on the constriction of Chinese supply.
They include U.S. miner Molycorp [MCP 52.57 7.89 (+17.66%) ], Canada’s Rare Element Resources and Neo Material Technologies [NEM.TO 7.96 0.08 (+1.02%)] and Australia’s Arafura and Lynas.
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But those firms’ share prices have been under pressure this month because Japan’s earthquake and tsunami are expected to temporarily slash demand from China’s biggest customer. In February, 281 metric tons of Chinese exports went to Japan, valued at $38.9 million or $138,406 per ton.
China exported a total of 750 metric tons in February, slightly more than the 647 metric tons shipped in January but otherwise the lowest monthly volume since February 2009, when demand was hit by the global financial crisis.
China’s Customs office changed its method of presenting rare earths exports in its headline data this year, boosting the reported volume by including products made from rare earth metals in the total.
By that method, exports were 2,976 metric tons in February, up by 132 percent from a year before, when the figure did not include rare earth products.
Copyright 2011 Thomson Reuters. Click for restrictions.
TOPICS:Japan | Metal Commodities | Asia | Commodities | China
SECTORS:Metals and Mining
COMPANIES:Molycorp
Very interesting, although his thoughts on Hoidas Lake remain a mystery to me. And no production from Bear Lodge.
These are some strange figures.
just showing again how little you know about magnets and Dy content, not to mention about the light rare earths….you definitely lost touch with science part and usage of rare earths.
what you can do properly is only a PR about the rare earths….not confusing the audience when a specific answers have to be given.
it is a reality that lower Dy content in magnets exists….
what an analyst???
resko: hmmm – to which “specific answers” are you referring? Of course there are Nd-based material grades that contain lower Dy content… most manufacturers sell at least 20-30 different grades of Nd-based magnet materials, with a wide variety of coercivities (typically 11-25 kOe) – each produced by altering the Dy content. For folks unfamiliar with the term, coercivity is the ability of the magnet material to resist demagnetization, and is related to the ability to resist temperature effects.
The point of doing work to lower Dy content in Nd-based magnet materials, is to lower the Dy in any given material grade, while maintaining the SAME coercivity in that grade.
If you are the particular former magnet-material researcher that I suspect you to be, “resko”, you should / would have already known that :-)
more home work has to be done rather then talk generic about the magnets. you do not sound convincing
Thank you for your “contribution”, prescentus – under that name, as “resko” or the other pseudonyms you’ve used in the past few days ;-)
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