Since publishing the Critical Rare Earths report earlier this month, I’ve received plenty of feedback on its contents, and the approach that I took with it. I particularly appreciate the interest in, and coverage of the report by RareMetalBlog and REE World. I’ve had some great dialog with folks who don’t necessarily agree with some of the findings of the report, but who were capable of having such discussions in a civilized and cordial manner. That is always appreciated.
For the most part, such discussions (and subsequent disagreements) have focused on what it means to be a “leading contender of supply”. I recognize that using such a term can be provocative. In the context of Critical Rare Earths, I was as clear as I think I could have been in indicating that my use of the term related to the potential strategic value of deposits, by virtue of the presence of appreciable quantities of specific critical rare-earth oxides (CREOs), not to their potential financial value. This will always be the first “port of call” from the strategic perspective, a perspective not necessarily shared by individual junior exploration and mining companies and their investors, who are first and foremost interested in the opportunities to make money.
Despite my best efforts, this important (albeit nuanced) distinction was perhaps lost on the intended audience. It led to a few misleading headlines and write ups on the document. Some would argue that the risk of misinterpretation of complex information outweighs the value of publishing it, but on this, I would (perhaps obviously) have to disagree. In any future edition of Critical Rare Earths I will obviously look for ways to improve, to clarify and to update the contents; it will still be the responsibility of the reader, however, to thoroughly read this (or any other) document, before being able to assess its contents.
I stand by my perspective that deposits with a significant presence of particularly important CREOs have specific strategic importance, beyond that of dollars and cents. However, in the absence of the intervention of a government entity who could theoretically acquire and bring any project on-stream, by circumventing the usual “go / no go” hoops to be jumped through for the purposes of raising private money (such as Preliminary Economic Assessments, Pre-Feasibility Studies and the like), we are reliant on the market as it is actually unfolding today. Regardless of which projects “should” be developed for strategic purposes alone, I willingly acknowledge the important role that the most advanced rare-earth development projects of today will potentially play, in providing the supply chain with future means of accessing important elements and compounds.
When we look at the market as it is unfolding today, the reality is that there is only a small group of rare-earth projects that are currently beyond the exploration stage and well on their way to full development, assuming that they can raise the money to get the job done. That is certainly not a knock on companies that are still doing exploration on their projects; but clearly such projects will have to transition from exploration, to advanced-development mode, before they can be further advanced, commercially.
Such advanced projects have clearly defined resources at the indicated and / or measured levels, and, in a few cases, their owners have been able to formally convert part of those resources to reserves (i.e. they have been deemed to be economically mineable). They have successfully completed comprehensive pre-feasibility studies, and / or are either on their way to developing definitive / bankable feasibility studies and / or have already started the construction of their mining and processing operations. As such, at present they probably stand the highest chances of commercial success, if for no other reason than that they’ve “made it this far”, ahead of everyone else.
The list of privately (i.e. non-government) financed projects that meet the above description includes (in alphabetical order) Dubbo, Mount Weld, Mountain Pass, Nechalacho, Nolans and Steenkampskraal. In terms of actual new non-Chinese output in the next few years, (as opposed to the theoretical, projected outputs examined for the purposes of establishing best / potential worst-case supply scenarios in the Critical Rare Earths report), it is to these projects that we are surely going to be looking first (assuming that any monies still to be raised, have been raised).
The next “tier” of privately funded projects, currently undergoing pre-feasibility studies, includes Bear Lodge, Kvanefjeld and Strange Lake, and depending on the outcomes of those studies, we can expect one or more of these projects to potentially join the others in the latter stages of the development lifecycle, sometime in the near future.
Including those mentioned above, TMR currently tracks 20 different rare-earth projects in its Index; in the near future we’ll be adding additional “color” to that Index, using criteria including those described above, to help folks further differentiate the different stages of development at which each of the various projects curently finds itself.
In the meantime, I look forward to seeing the successful completion of each important developmental milestone in this sector. The supply chain beyond is counting on it…
(first published at RareMetalBlog).